Investing Glossary
Don't know what the operating margin or ex-dividend date is? An investing glossary can provide definitions and related terms to help make your life easier.
Rating Agency
A rating agency is a company that has been given special authority from the government to rate securities such as stocks and bonds, based on risk and pricing. The higher the rating, the lower the risk of default, which generally means a lower interest rate for the the company issuing the stock or bond. Companies that receive high credit ratings from the rating agencies have lower costs of funding and capital.
A rating agency is a company that has been given special authority from the government to rate securities such as stocks and bonds, based on risk and pricing. The higher the rating, the lower the risk of default, which generally means a lower interest rate for the the company issuing the stock or bond. Companies that receive high credit ratings from the rating agencies have lower costs of funding and capital.
Purchasing Managers Index
The Purchasing Managers Index is released on the first day of the month by the National Association of Purchasing Managers. The PMI measures five factors in business: new orders, inventory levels, production, supplier delivers, and employment conditions. Each of these five factors are adjusted and weighed according to time of year and other events.
The Purchasing Managers Index is released on the first day of the month by the National Association of Purchasing Managers. The PMI measures five factors in business: new orders, inventory levels, production, supplier delivers, and employment conditions. Each of these five factors are adjusted and weighed according to time of year and other events.
New York Stock Exchange
Located on Wall Street in New York City, the New York Stock Exchange, or NYSE, is the oldest and largest in the world. It generally tends to control policy due to its sheer size and is where most major U.S. Blue Chip companies trade. The New York Stock Exchange is also referred to as the Big Board.
Located on Wall Street in New York City, the New York Stock Exchange, or NYSE, is the oldest and largest in the world. It generally tends to control policy due to its sheer size and is where most major U.S. Blue Chip companies trade. The New York Stock Exchange is also referred to as the Big Board.
Employment Situation Report
The Employment Situation Report is an economic indicator that is released on the first Friday of every month at 8:30 a.m., EST. Published by the Bureau of Labor and Statistics, the report has two main components. The Employment Situation Report is used to help determine the "tightness" of the labor market.
The Employment Situation Report is an economic indicator that is released on the first Friday of every month at 8:30 a.m., EST. Published by the Bureau of Labor and Statistics, the report has two main components. The Employment Situation Report is used to help determine the "tightness" of the labor market.
Employee Cost Index - ECI
The Employee Cost Index (or ECI for short), is a measurement of the growth of overall compensation, including wages and benefits, for employees across the country. It is based on a fixed number of occupations and is released by the Department of Labor.
The Employee Cost Index (or ECI for short), is a measurement of the growth of overall compensation, including wages and benefits, for employees across the country. It is based on a fixed number of occupations and is released by the Department of Labor.
Consumer Price Index
The consumer price index is one of the most important benchmarks and economic indicators because it measures the prices of goods and services for the consumer. The consumer price index is published monthly by the U.S. Department of Labor and measures inflation. The CPI tracks price changes from the consumer's perspective, whereas the PPI measures it from the seller's / manufacturer's perspective.
The consumer price index is one of the most important benchmarks and economic indicators because it measures the prices of goods and services for the consumer. The consumer price index is published monthly by the U.S. Department of Labor and measures inflation. The CPI tracks price changes from the consumer's perspective, whereas the PPI measures it from the seller's / manufacturer's perspective.
Consumer Confidence Index
The consumer confidence index, which is often shorthanded as CCI, is an economic indicator that measures consumer confidence in the United States economy. The U.S. has been far more dependent upon the spending pattern of its citizens than other industrialized nations, making it much more important than a comparable figure would be in nations such as Japan or Germany.
The consumer confidence index, which is often shorthanded as CCI, is an economic indicator that measures consumer confidence in the United States economy. The U.S. has been far more dependent upon the spending pattern of its citizens than other industrialized nations, making it much more important than a comparable figure would be in nations such as Japan or Germany.
Retail Sales Data
Retail Sales are the backbone of our economy. The Retail Sales Data released monthly by the Census Bureau measures the merchandise sold by companies. It includes all retail operations in the nation through a sampling method, from Wal-Mart to the local bookstore.
Retail Sales are the backbone of our economy. The Retail Sales Data released monthly by the Census Bureau measures the merchandise sold by companies. It includes all retail operations in the nation through a sampling method, from Wal-Mart to the local bookstore.
PPI (Producer Price Index)
The Producer Price Index (or PPI for short) is a group of indices that measures the average change over a span of time of the price received by domestic producers of goods and services. Whereas the CPI measures price changes from the consumer's perspective, the PPI measures it from the Sellers / Manufacturer's perspective.
The Producer Price Index (or PPI for short) is a group of indices that measures the average change over a span of time of the price received by domestic producers of goods and services. Whereas the CPI measures price changes from the consumer's perspective, the PPI measures it from the Sellers / Manufacturer's perspective.
Housing Starts
A key economic indicator, Housing Starts measure the number of new residential construction projects begun during a specific span or period of time.
A key economic indicator, Housing Starts measure the number of new residential construction projects begun during a specific span or period of time.
Gross National Product (GNP)
The Gross National Product (or GNP) is comprised of taking the Gross Domestic Product (GNP) and adding it to the income of domestic residents resulting from foreign investments subtracted by the earned income in domestic markets by foreigners.
The Gross National Product (or GNP) is comprised of taking the Gross Domestic Product (GNP) and adding it to the income of domestic residents resulting from foreign investments subtracted by the earned income in domestic markets by foreigners.
Bankrupt
When a person or company cannot pay back its liabilities and debt. In a publicly traded corporation, assets are transferred from shareholders to bondholders and various other creditors.
When a person or company cannot pay back its liabilities and debt. In a publicly traded corporation, assets are transferred from shareholders to bondholders and various other creditors.
Annuity
A contract available from an insurance company which guarantees specific payments at certain times (such as retirement). There are several different types of annuities, but the two most common are fixed and variable. Fixed annuities guarantee a payment for a certain amount of money. Variable annuities carry no such guarantee but have a greater potential for appreciation.
A contract available from an insurance company which guarantees specific payments at certain times (such as retirement). There are several different types of annuities, but the two most common are fixed and variable. Fixed annuities guarantee a payment for a certain amount of money. Variable annuities carry no such guarantee but have a greater potential for appreciation.
SEC (Securities and Exchange Commission)
The Securities and Exchange Commission (normally called the SEC for short), is the chief regulating body in the securities industry. Its primary function is to protect investors by preventing and prosecuting fraud, insider trading, and other deceptive and fraudulent practices in the stock market.
The Securities and Exchange Commission (normally called the SEC for short), is the chief regulating body in the securities industry. Its primary function is to protect investors by preventing and prosecuting fraud, insider trading, and other deceptive and fraudulent practices in the stock market.
Pacific Stock Exchange
The Pacific Stock Exchange is a regional exchange found in San Francisco and Los Angeles. It is the only exchange in the United States open between 4:00 and 4:30 p.m.
The Pacific Stock Exchange is a regional exchange found in San Francisco and Los Angeles. It is the only exchange in the United States open between 4:00 and 4:30 p.m.
Partnership Agreement
A Partnership Agreement is a written contract among partners that spells out the exact terms and conditions of the partnership.
A Partnership Agreement is a written contract among partners that spells out the exact terms and conditions of the partnership.
Partnership
A partnership is type of unincorporated business structure in which individuals or entities called "partners" are entitled to a percentage of the profits. There are two types of partnerships including the general partnership and limited partnership.
A partnership is type of unincorporated business structure in which individuals or entities called "partners" are entitled to a percentage of the profits. There are two types of partnerships including the general partnership and limited partnership.
Partner
A partner is any individual who is part of a partnership. There are generally two types of partners, "General" and "Limited".
A partner is any individual who is part of a partnership. There are generally two types of partners, "General" and "Limited".
Participation Rate
The Participation Rate is the percentage of the general population (over the age of 15) who are currently employed or are actively seeking employment.
The Participation Rate is the percentage of the general population (over the age of 15) who are currently employed or are actively seeking employment.
Parabolic Indicator
The Parabolic Indicator was developed by J. Wells Wilder in order to determine the best times to get in and out of the market. It is based on SAR (the stop and reverse method).
The Parabolic Indicator was developed by J. Wells Wilder in order to determine the best times to get in and out of the market. It is based on SAR (the stop and reverse method).
Paired Shares
Paired Shares refer to the stock of two separate companies that are under the management / supervision of a single firm that is sold as one unit. Also known as Siamese Shares.
Paired Shares refer to the stock of two separate companies that are under the management / supervision of a single firm that is sold as one unit. Also known as Siamese Shares.
Limited Partnership
A partnership that includes one or more partners with limited liability in regards to the dealings of the partnership.
A partnership that includes one or more partners with limited liability in regards to the dealings of the partnership.
Deflation
Deflation is a decline in overall prices in the economy due to a contraction of either credit or the amount of money that is available. It is the opposite of inflation.
Deflation is a decline in overall prices in the economy due to a contraction of either credit or the amount of money that is available. It is the opposite of inflation.
Corporation
A corporation is a legal entity chartered by the State and seperate from its owners. A corporation can issue shares of stock and take on debt.
A corporation is a legal entity chartered by the State and seperate from its owners. A corporation can issue shares of stock and take on debt.
Adjusted Basis
A tool used to calculate the gain or loss when a security or asset is sold. It reflects any improvement or adverse event the investment may have been subject to.
A tool used to calculate the gain or loss when a security or asset is sold. It reflects any improvement or adverse event the investment may have been subject to.
Asset Play
A term used to describe a company who's assets are not accurately or completed represented in its share price, therefore making it an attractive investment.
A term used to describe a company who's assets are not accurately or completed represented in its share price, therefore making it an attractive investment.
Angels
A term used to describe wealthy individuals who loan capital to beginning business ventures. In return for the substantial risk they take, most requires a portion of the equity in the company, hoping for huge payoffs later.
A term used to describe wealthy individuals who loan capital to beginning business ventures. In return for the substantial risk they take, most requires a portion of the equity in the company, hoping for huge payoffs later.
After Hours Trading
After Hours Trading is a term that refers to securities being traded after regular business hours on the major exhanges.
After Hours Trading is a term that refers to securities being traded after regular business hours on the major exhanges.
Action to Quiet Title
An action to quiet title is a decision by a court that establishes ownership of a property, specifically real estate.
An action to quiet title is a decision by a court that establishes ownership of a property, specifically real estate.
Traditional IRA
A traditional IRA is a type of retirement plan that allows you to make tax-deductible contributions to your account based on your adjusted gross income.
A traditional IRA is a type of retirement plan that allows you to make tax-deductible contributions to your account based on your adjusted gross income.
Participating Convertible Preferred Stock
Participating Convertible Preferred Stock is a class of preferred stock which is entitled to an additional dividend in addition to the regular dividend, whenever the dividend on the common stock exceeds a certain amount or yield.
Participating Convertible Preferred Stock is a class of preferred stock which is entitled to an additional dividend in addition to the regular dividend, whenever the dividend on the common stock exceeds a certain amount or yield.
Net Worth
Net worth is defined as total assets subtracted by total liabilities.
Net worth is defined as total assets subtracted by total liabilities.
Hostile Takeover
A hostile takeover is when one company attempts to acquire another company against the wishes of the management, shareholders, and board of directors of the target company.
A hostile takeover is when one company attempts to acquire another company against the wishes of the management, shareholders, and board of directors of the target company.
Common Stock
Common stock is one of the two main classes of a corporation's stock (the other is preferred stock). Common stock gives the holder the right to vote at shareholder meetings and may or may not pay a dividend depending upon management's policies.
Common stock is one of the two main classes of a corporation's stock (the other is preferred stock). Common stock gives the holder the right to vote at shareholder meetings and may or may not pay a dividend depending upon management's policies.
Discount Rate
The discount rate is the amount of interest that the Federal Reserve charges a financial institution when it borrows money.
The discount rate is the amount of interest that the Federal Reserve charges a financial institution when it borrows money.
Uptick
Uptick is a term used to describe an upward movement by a particular stock. The exchanges in the United States only allow stocks to be sold short on an uptick.
Uptick is a term used to describe an upward movement by a particular stock. The exchanges in the United States only allow stocks to be sold short on an uptick.
Tracking Stock
A stock that is issued to track a certain division of a company. This allows managers and executives for each division to have rewards and compensation tied to the overall performance of the part of the company they control.
A stock that is issued to track a certain division of a company. This allows managers and executives for each division to have rewards and compensation tied to the overall performance of the part of the company they control.
Two Tier Bid
A Two Tier Bid is when a potential acquirer offers to pay a higher price for the shares that will give them control in the company than for the other shares (e.g., the first 51% gets a higher price than the remaining 49%). As opposed to an any-or-all bid.
A Two Tier Bid is when a potential acquirer offers to pay a higher price for the shares that will give them control in the company than for the other shares (e.g., the first 51% gets a higher price than the remaining 49%). As opposed to an any-or-all bid.
Acid Test Ratio
The acid test ratio is another name for the "quick ratio". It is used to measure how easily a company could be liquidated, and therefore help financial institutions decide upon how credit worthy the company is. It is found by taking a company's quick assets (those that can be converted to cash in a short amount of time) subtracted by current liabilities.
The acid test ratio is another name for the "quick ratio". It is used to measure how easily a company could be liquidated, and therefore help financial institutions decide upon how credit worthy the company is. It is found by taking a company's quick assets (those that can be converted to cash in a short amount of time) subtracted by current liabilities.
Title
A title is a document or certificate that represents ownership of an asset such as real estate.
A title is a document or certificate that represents ownership of an asset such as real estate.
Tender Offer
A tender offer is a public offer made to the shareholders of a company by a potential acquirer to purchase their stock at a price much higher than the current market value of the stock. If all goes as planned, the shareholders who accept the tender offer make a significant profit on their holdings, and the acquirer gains control of the company.
A tender offer is a public offer made to the shareholders of a company by a potential acquirer to purchase their stock at a price much higher than the current market value of the stock. If all goes as planned, the shareholders who accept the tender offer make a significant profit on their holdings, and the acquirer gains control of the company.
Subsidiary
A subsidiary is a company that is wholly, or nearly wholly, owned by another business, corporation, or company. There are special tax rules for 80% or greater owned subsidiaries that allow the company to pay dividends to the parent corporation tax-free.
A subsidiary is a company that is wholly, or nearly wholly, owned by another business, corporation, or company. There are special tax rules for 80% or greater owned subsidiaries that allow the company to pay dividends to the parent corporation tax-free.
Securities
The word securities is used to describe any asset that can be bought and sold on a market by exchanging paper certificates or electronic ownership records. Shares of stock, ETFs, and many bonds are securities. Real Estate held in REIT form and traded also counts as securities. Regular mutual funds or real estate does not. You'll often hear financial professionals use securities as a catch-call phrase for your investments.
The word securities is used to describe any asset that can be bought and sold on a market by exchanging paper certificates or electronic ownership records. Shares of stock, ETFs, and many bonds are securities. Real Estate held in REIT form and traded also counts as securities. Regular mutual funds or real estate does not. You'll often hear financial professionals use securities as a catch-call phrase for your investments.
Annual Percentage Yield
The annual rate of return; it takes into account compounding. The APY is calculated by taking one plus the periodic rate and raising it to the number of periods in a year. For example, a 1% per month rate has an APY of 12.68% (1.01^12 -1).
The annual rate of return; it takes into account compounding. The APY is calculated by taking one plus the periodic rate and raising it to the number of periods in a year. For example, a 1% per month rate has an APY of 12.68% (1.01^12 -1).
Shareholder
A shareholder is any person, corporation, institution, or entity that owns stock in a publicly traded company.
A shareholder is any person, corporation, institution, or entity that owns stock in a publicly traded company.
Shadow Player
Shadow Player is financial slang for an investor who is investing a very large amount of money and is attempting to conceal their identity when buying up shares in a company.
Shadow Player is financial slang for an investor who is investing a very large amount of money and is attempting to conceal their identity when buying up shares in a company.
Short Selling - Short a Stock
When someone shorts a stock (sometimes called "selling short"), they borrow shares of a company from an investor and sell those borrowed shares at the current market price. The hope is that the stock price will fall so the short seller can repurchase the stock at a lower price and pay back the person they borrowed from.
When someone shorts a stock (sometimes called "selling short"), they borrow shares of a company from an investor and sell those borrowed shares at the current market price. The hope is that the stock price will fall so the short seller can repurchase the stock at a lower price and pay back the person they borrowed from.
Principal
Principal is the total amount of money being invested, borrowed, lent, saved, etc.
Principal is the total amount of money being invested, borrowed, lent, saved, etc.
Prime Rate
The Prime Rate is in the interest rate at which banks lend to their best and most creditworthy borrowers. Generally considered to be a lagging indicator of the economy.
The Prime Rate is in the interest rate at which banks lend to their best and most creditworthy borrowers. Generally considered to be a lagging indicator of the economy.
Poison Pill
Poison Pill is the nickname for any tactic utilized by a company to try and prevent a hostile takeover. Designed to make the target company unattractive to the potential buyer.
Poison Pill is the nickname for any tactic utilized by a company to try and prevent a hostile takeover. Designed to make the target company unattractive to the potential buyer.
Pass Through Certificate
A Pass Through Certificate is a fixed income security that is an undivided interest in a group of mortgages ensured by the Federal Government. They are put together by Ginnie Mae (Government National Mortgage Association).
A Pass Through Certificate is a fixed income security that is an undivided interest in a group of mortgages ensured by the Federal Government. They are put together by Ginnie Mae (Government National Mortgage Association).
Pass the Book
Pass the Book is slang for when a brokerage firm transfers responsibility for accounts to other offices around the world in order to take advantage of 24 hour trading.
Pass the Book is slang for when a brokerage firm transfers responsibility for accounts to other offices around the world in order to take advantage of 24 hour trading.
Passive Portfolio Strategy
An investment strategy that is founded upon the principles of diversification. The goal is to match a particular market index's return. Opposite of Active Portfolio Strategy.
An investment strategy that is founded upon the principles of diversification. The goal is to match a particular market index's return. Opposite of Active Portfolio Strategy.
Pass Book
A Pass Book is a book given to account holders of banks and savings and loans institutions in order to document all transactions. Used predominately for a savings account.
A Pass Book is a book given to account holders of banks and savings and loans institutions in order to document all transactions. Used predominately for a savings account.
Par Value of Currency
The Par Value of Currency is the official, quoted exchange rate between any two countries' currency.
The Par Value of Currency is the official, quoted exchange rate between any two countries' currency.
Participation Certificate
A Participation Certificate is an investment where an individual purchases part of the revenue generated by municipal or government leases instead of the bonds backed by the revenues.
A Participation Certificate is an investment where an individual purchases part of the revenue generated by municipal or government leases instead of the bonds backed by the revenues.
Participating Trust
A Participating Trust is an investment company which purchases and compiles a fixed portfolio of unmanaged assets and investments designed to create income. The trust then sells shares of itself to the public.
A Participating Trust is an investment company which purchases and compiles a fixed portfolio of unmanaged assets and investments designed to create income. The trust then sells shares of itself to the public.
Participating Loan
A participating loan is one made by multiple lenders.
A participating loan is one made by multiple lenders.
Participating Preferred Stock
Participating Preferred Stock is a kind of preferred stock that pays 1.) a regular dividend, and 2.) an additional dividend when the dividend on the common stock exceeds a specific amount.
Participating Preferred Stock is a kind of preferred stock that pays 1.) a regular dividend, and 2.) an additional dividend when the dividend on the common stock exceeds a specific amount.
Participating Insurance
Participating Insurance is the term used to describe any insurance policy that pays out a dividend to its holders.
Participating Insurance is the term used to describe any insurance policy that pays out a dividend to its holders.
Participating Fees
A participating fee is a the part of the total, overall fees that go to each individual bank that makes up a syndicate.
A participating fee is a the part of the total, overall fees that go to each individual bank that makes up a syndicate.
Participating Dividend
A participating dividend is a special dividend that is paid on participating preferred stock.
A participating dividend is a special dividend that is paid on participating preferred stock.
Partial Spinoff
A Partial Spinoff is when a parent company sells part of a subsidiary to the public, usually in the form of an IPO. In a situation such as this, the parent company raises money through the sell-off, but retains control and a majority stake in the subsidiary, while the spun-off entity enjoys the financial and professional resources of its parent.
A Partial Spinoff is when a parent company sells part of a subsidiary to the public, usually in the form of an IPO. In a situation such as this, the parent company raises money through the sell-off, but retains control and a majority stake in the subsidiary, while the spun-off entity enjoys the financial and professional resources of its parent.
Partial Release
A Partial Release is a provision in a mortgage agreement which allows the release of a portion of collateral that has been pledged if certain conditions are met.
A Partial Release is a provision in a mortgage agreement which allows the release of a portion of collateral that has been pledged if certain conditions are met.
Partially Amortized Loan
A Partially Amortized Loan is a liability or obligation that is partially amortized while the rest is paid upon the end of the loan term.
A Partially Amortized Loan is a liability or obligation that is partially amortized while the rest is paid upon the end of the loan term.
Partial
A Partial is when only a part of a customer's order is filled. It is done so that the current market price of an equity can be obtained, as well as prevent losing business to a competing brokerage firm. It can be avoided by placing an all or none order.
A Partial is when only a part of a customer's order is filled. It is done so that the current market price of an equity can be obtained, as well as prevent losing business to a competing brokerage firm. It can be avoided by placing an all or none order.
Parking Violation
A Parking Violation is an illegal tactic used to get around the Williams Act, which requires disclosure when a person or entities' holdings reach 5% of a company. In order for a raider to hide his ownership in the target company, he/she will have a third-party hold or finance the stock (thus, no one realizes just how much they own).
A Parking Violation is an illegal tactic used to get around the Williams Act, which requires disclosure when a person or entities' holdings reach 5% of a company. In order for a raider to hide his ownership in the target company, he/she will have a third-party hold or finance the stock (thus, no one realizes just how much they own).
Parking
When a business or investor "parks" their money, it means they have moved it to cash, cash equivalents, and other "safe" and conservative investments until they see an opportunity to move back into stocks or bonds. It is used predominately when the market is thought to be overpriced or unstable.
When a business or investor "parks" their money, it means they have moved it to cash, cash equivalents, and other "safe" and conservative investments until they see an opportunity to move back into stocks or bonds. It is used predominately when the market is thought to be overpriced or unstable.
Parity Price
The Parity Price is the cost for a given commodity that is tied to a historical price or composite price.
The Parity Price is the cost for a given commodity that is tied to a historical price or composite price.
Parity
Parity is when all parties involved are of equal standing and priority. When brokers are bidding for a security, and none has priority, a random drawing is held to determine the winning bid.
Parity is when all parties involved are of equal standing and priority. When brokers are bidding for a security, and none has priority, a random drawing is held to determine the winning bid.
Paris Club
The Paris Club is the term used to describe the monthly meetings between 19 creditor and debtor nations to negotiate and discuss each country's financial obligations to the others. Frequently, relief measures are drawn up for third world and developing countries that cannot meet their liabilities.
The Paris Club is the term used to describe the monthly meetings between 19 creditor and debtor nations to negotiate and discuss each country's financial obligations to the others. Frequently, relief measures are drawn up for third world and developing countries that cannot meet their liabilities.
Paris Bourse
The Paris Bourse is the official national stock market of France.
The Paris Bourse is the official national stock market of France.
Pari Passu
Pari Passu translates as "without partiality" from Latin. It is used in reference to two class of securities or obligations that have equal entitlement to payment.
Pari Passu translates as "without partiality" from Latin. It is used in reference to two class of securities or obligations that have equal entitlement to payment.
Parent Company
A parent company is a business which owns and controls the operations of other businesses by either possessing outright ownership or controlling a majority of the voting stock.
A parent company is a business which owns and controls the operations of other businesses by either possessing outright ownership or controlling a majority of the voting stock.
Par Bond
A par bond is a bond that is selling at face value.
A par bond is a bond that is selling at face value.
Parallel Shift in the Yield Curve
A Parallel Shift in the Yield Curve is a phenomenon that occurs when the interest rate on all maturities increases or decreases by the same number of basis points. See also Non-Parallel Shift in the Yield Curve. It generally signals a change in economic conditions.
A Parallel Shift in the Yield Curve is a phenomenon that occurs when the interest rate on all maturities increases or decreases by the same number of basis points. See also Non-Parallel Shift in the Yield Curve. It generally signals a change in economic conditions.
Parallel Loan
A Parallel Loan is when two companies, institutions, or entities, particularly banks, borrow the other's currency in order to reduce foreign exchange risk.
A Parallel Loan is when two companies, institutions, or entities, particularly banks, borrow the other's currency in order to reduce foreign exchange risk.
Paper Trail
A paper trail is a string of documents, records, accounts, and paperwork that can be used to follow a string of activity.
A paper trail is a string of documents, records, accounts, and paperwork that can be used to follow a string of activity.
Paper Trading
Paper trading is the act of simulating investing with theoretical money to test theories and performance.
Paper trading is the act of simulating investing with theoretical money to test theories and performance.
Paper Profit
A paper profit is an increase in the market value of an investment. It does not become "realized" or "real" until the investment is sold. Also known as a paper or unrealized gain.
A paper profit is an increase in the market value of an investment. It does not become "realized" or "real" until the investment is sold. Also known as a paper or unrealized gain.
Paper Loss
A paper loss is a decrease in the market value of an investment. It does not become "realized" or "real" until the investment is sold. The same thing as a paper and unrealized loss.
A paper loss is a decrease in the market value of an investment. It does not become "realized" or "real" until the investment is sold. The same thing as a paper and unrealized loss.
Paper Gain
A paper gain is an increase in the market value of an investment. It does not become "realized" or "real" until the investment is sold.
A paper gain is an increase in the market value of an investment. It does not become "realized" or "real" until the investment is sold.
Paper Asset
A paper asset is one that has very low liquidity. That is, a paper asset cannot be quickly converted into cash.
A paper asset is one that has very low liquidity. That is, a paper asset cannot be quickly converted into cash.
Panic Selling
Panic Selling is the widespread selling of an investment, particularly a stock, after a sudden and sharp decline in price. It is normally driven by fear that the market will fall further, causing additional losses.
Panic Selling is the widespread selling of an investment, particularly a stock, after a sudden and sharp decline in price. It is normally driven by fear that the market will fall further, causing additional losses.
Panic Buying
Panic Buying is when investors start purchasing a stock following a large, substantial price increase. It is driven by the fear of being "left out" of the "next big thing."
Panic Buying is when investors start purchasing a stock following a large, substantial price increase. It is driven by the fear of being "left out" of the "next big thing."
Paired Off
Paired Off usually refers to buy and sell orders that are matched up to each other before the opening of the market.
Paired Off usually refers to buy and sell orders that are matched up to each other before the opening of the market.
Painting the Tape
Painting the Tape is when traders engage in the illegal activity of buying and selling a security among themselves to create the facade of heavy volume. The increased volume, in exchange, causes other investors to take interest and possibly invest, driving the price up and earning those traders involved a profit.
Painting the Tape is when traders engage in the illegal activity of buying and selling a security among themselves to create the facade of heavy volume. The increased volume, in exchange, causes other investors to take interest and possibly invest, driving the price up and earning those traders involved a profit.
Paid Up
Paid up is a way of saying that all payments that are due or owed have been fully paid.
Paid up is a way of saying that all payments that are due or owed have been fully paid.
Paid in Surplus
Paid in Surplus is capital that is brought in by investors in return for stock. It is not capital that is generated as a result of the operation of the company. Also referred to as Contributed Capital or Paid in Capital.
Paid in Surplus is capital that is brought in by investors in return for stock. It is not capital that is generated as a result of the operation of the company. Also referred to as Contributed Capital or Paid in Capital.
Paid in Capital
Paid in Capital is capital that is brought in by investors in return for stock. It is not capital that is generated as a result of the operation of the company. Also referred to as Contributed Capital or Paid in Surplus.
Paid in Capital is capital that is brought in by investors in return for stock. It is not capital that is generated as a result of the operation of the company. Also referred to as Contributed Capital or Paid in Surplus.
Pac-Man Strategy
The Pac-Man Strategy is a defense against a hostile takeover. It is when a takeover target company launches a tender offer for the company that was trying to acquire it. If successful, the target company ends up taking over the company that tried to buy it out.
The Pac-Man Strategy is a defense against a hostile takeover. It is when a takeover target company launches a tender offer for the company that was trying to acquire it. If successful, the target company ends up taking over the company that tried to buy it out.
Package Mortgage
A package mortgage is one in which the personal property and furniture is included in the cost of the house.
A package mortgage is one in which the personal property and furniture is included in the cost of the house.
Merger
A merger is when two companies consolidate together to create a new firm. Mergers allow companies to expand their market, lower cost through economics of scale, and sometimes enjoy better negotiating power with vendors.
A merger is when two companies consolidate together to create a new firm. Mergers allow companies to expand their market, lower cost through economics of scale, and sometimes enjoy better negotiating power with vendors.
Bond Maturity
Maturity is the date that the principal on a bond is legally required to repaid to the bond holder.
Maturity is the date that the principal on a bond is legally required to repaid to the bond holder.
Round Lot
A round lot refers to blocks of 100 shares of a stock. There are sometimes fees for investors who do no purchase in round lots because it's easier for the stock exchange to trade shares when they are in 100 share increments.
A round lot refers to blocks of 100 shares of a stock. There are sometimes fees for investors who do no purchase in round lots because it's easier for the stock exchange to trade shares when they are in 100 share increments.
Line of Credit
A line of credit is an informal agreement between a bank or institution and another entity, such as a business or individual, in which the former allows the latter to borrow up to certain limit of money simply by requesting the funds be deposited in their bank account.
A line of credit is an informal agreement between a bank or institution and another entity, such as a business or individual, in which the former allows the latter to borrow up to certain limit of money simply by requesting the funds be deposited in their bank account.
Loan
A loan is when one entity gives money or assets to another one for a set period of time, in exchange for repayment of the principal plus interest.
A loan is when one entity gives money or assets to another one for a set period of time, in exchange for repayment of the principal plus interest.
Market Capitalization
A company's market capitalization, or market cap as it is often called on Wall Street, refers to the total value of a company's stock. It is calculated by taking all of the outstanding shares and multiplying that number by the current stock price. The market capitalization of a company is the price it would take to buy all of the shares of stock at the current market price. It isn't the true economic cost of buying the business because it doesn't factor in debt like enterprise value.
A company's market capitalization, or market cap as it is often called on Wall Street, refers to the total value of a company's stock. It is calculated by taking all of the outstanding shares and multiplying that number by the current stock price. The market capitalization of a company is the price it would take to buy all of the shares of stock at the current market price. It isn't the true economic cost of buying the business because it doesn't factor in debt like enterprise value.
Liquidation
Liquidation is the act of selling all assets or items with tangible value and using the proceeds to pay the company's creditors. All remaining cash, and assets possessing any value are distributed to the shareholders of the company.
Liquidation is the act of selling all assets or items with tangible value and using the proceeds to pay the company's creditors. All remaining cash, and assets possessing any value are distributed to the shareholders of the company.
Institutional Investor
An institutional investor is an entity, company, mutual fund, insurance corporation, brokerage, or other such group that has a large amount of money or assets to invest. These investors are responsible for a great percentage of the overall volume for stocks, bonds, mutual funds, and commodities. Because they are generally assumed to have a greater knowledge of investments and risk, they are less restricted in their investment activities than individuals are.
An institutional investor is an entity, company, mutual fund, insurance corporation, brokerage, or other such group that has a large amount of money or assets to invest. These investors are responsible for a great percentage of the overall volume for stocks, bonds, mutual funds, and commodities. Because they are generally assumed to have a greater knowledge of investments and risk, they are less restricted in their investment activities than individuals are.
Growth Fund
A growth fund is a type of mutual fund that seeks to invest in higher-risk securities in exchange for the potential of higher gains due to tremendous growth rates of the companies the own. For the most part, growth stocks don't pay out dividends and instead plows earnings back into expansion.
A growth fund is a type of mutual fund that seeks to invest in higher-risk securities in exchange for the potential of higher gains due to tremendous growth rates of the companies the own. For the most part, growth stocks don't pay out dividends and instead plows earnings back into expansion.
Glass-Steagall Act
The Glass-Steagall Act is legislation that was passed in 1933 which prohibits banks from underwriting, dealing in, or owning stocks and bonds of corporate companies. This effectively bans banks from operating brokerage firms. This law has laxed in the past few decades, and some banks now deal in mutual funds and other investment instruments.
The Glass-Steagall Act is legislation that was passed in 1933 which prohibits banks from underwriting, dealing in, or owning stocks and bonds of corporate companies. This effectively bans banks from operating brokerage firms. This law has laxed in the past few decades, and some banks now deal in mutual funds and other investment instruments.
Government National Mortgage Association - Ginnie Mae
Ginnie Mae is an entity completely owned by the United States Government. A part of the Department of Housing and Urban Development, Ginnie Mae purchases mortgages from approved lending institutions, analyzes them, and then sells them to investors. These mortgages are guaranteed and backed by the United States Government.
Ginnie Mae is an entity completely owned by the United States Government. A part of the Department of Housing and Urban Development, Ginnie Mae purchases mortgages from approved lending institutions, analyzes them, and then sells them to investors. These mortgages are guaranteed and backed by the United States Government.
Interest
Interest is a fee that a lender charges in order for a borrower to use their money. Interest is expressed in terms of "percent of principal" (for instance, if a loan is $1,000 and the interest is $100, then the interest is 10%). Various factors influence interest; a borrower with perfect credit will get charged a lower interest rate because the risk of default is much lower.
Interest is a fee that a lender charges in order for a borrower to use their money. Interest is expressed in terms of "percent of principal" (for instance, if a loan is $1,000 and the interest is $100, then the interest is 10%). Various factors influence interest; a borrower with perfect credit will get charged a lower interest rate because the risk of default is much lower.
Fortune 500
The Fortune 500 is a list published by Fortune Magazine profiling the top 500 corporations in the United States. The rankings are indexed by twelve different variables and criteria.
The Fortune 500 is a list published by Fortune Magazine profiling the top 500 corporations in the United States. The rankings are indexed by twelve different variables and criteria.
Five Hundred Dollar Rule
The five hundred dollar rule is a Federal Reserve rule that excludes $500 or less deficiencies in margin accounts as a necessary reason for a brokerage or other financial institution to sell off and liquidate a client's account in order to cover a margin call.
The five hundred dollar rule is a Federal Reserve rule that excludes $500 or less deficiencies in margin accounts as a necessary reason for a brokerage or other financial institution to sell off and liquidate a client's account in order to cover a margin call.
Fiscal Year
A fiscal year is any period of 12 consecutive months for which a company or business calculates earnings, profits, and losses. It does not necessarily reside within a calendar year (e.g., a company may have a fiscal year of October - September). The fiscal year is used as a benchmark to compare a company's growth from year to year.
A fiscal year is any period of 12 consecutive months for which a company or business calculates earnings, profits, and losses. It does not necessarily reside within a calendar year (e.g., a company may have a fiscal year of October - September). The fiscal year is used as a benchmark to compare a company's growth from year to year.
Employee Stock Ownership Plan
An employee stock ownership plan is a tool that companies use to increase employee feeling of "ownership" in a business, and therefore productivity. It is a trust fund established by the company in which employees can purchase stock in the company, most of the time, at discounted prices, usually at least 15% off the current market value.
An employee stock ownership plan is a tool that companies use to increase employee feeling of "ownership" in a business, and therefore productivity. It is a trust fund established by the company in which employees can purchase stock in the company, most of the time, at discounted prices, usually at least 15% off the current market value.
Emerging Market
The term emerging market is used to describe investments bought in companies that are emerging or underdeveloped compared to world powers. Emerging markets offer higher risks due to less stable political systems and currencies but often offer the chance to make double or triple digit returns in a short period of time.
The term emerging market is used to describe investments bought in companies that are emerging or underdeveloped compared to world powers. Emerging markets offer higher risks due to less stable political systems and currencies but often offer the chance to make double or triple digit returns in a short period of time.
Economics of Scale
Economics of Scale is a term that is used to describe the reduction in cost-per-unit as more units are produced. For example, if a company makes 500 widgets, they cost the company 10 cents a piece to produce.
Economics of Scale is a term that is used to describe the reduction in cost-per-unit as more units are produced. For example, if a company makes 500 widgets, they cost the company 10 cents a piece to produce.
Downtick
A downtick is a term used to describe a downward movement by a particular stock. The exchanges in the United States do not allow stocks to be sold short on a downtick and this is known as the uptick rule.
A downtick is a term used to describe a downward movement by a particular stock. The exchanges in the United States do not allow stocks to be sold short on a downtick and this is known as the uptick rule.
Distress Sale
A distress sale is the forced sale of an asset or investment because of necessity. For example, a person may need to pay hospital bills or cover a margin call, and are therefore are forced to sell their assets. This is commonly referred to as a distress sale, and generally tends to be advantageous to the buyer.
A distress sale is the forced sale of an asset or investment because of necessity. For example, a person may need to pay hospital bills or cover a margin call, and are therefore are forced to sell their assets. This is commonly referred to as a distress sale, and generally tends to be advantageous to the buyer.
Coupon Bond
A coupon bond is the same as a bearer bond in that it is not registered with a company but instead, whoever physically has possession of the coupon bond has the right to receive the interest income.
A coupon bond is the same as a bearer bond in that it is not registered with a company but instead, whoever physically has possession of the coupon bond has the right to receive the interest income.
Default
On Wall Street, the term default is used to describe when a payment is missed that is due to bondholders or a lender. In many cases, a default is enough to trigger the acceleration clause.
On Wall Street, the term default is used to describe when a payment is missed that is due to bondholders or a lender. In many cases, a default is enough to trigger the acceleration clause.
Debenture
A debenture is any debt or loan that is backed only by the borrower's word. In other words, the definition of a debenture is an unsecured bond.
A debenture is any debt or loan that is backed only by the borrower's word. In other words, the definition of a debenture is an unsecured bond.
Cyclical Stocks
A cyclical stock is a stock that has historically moved up very quickly in a rising economy and fallen in a depressed one. Common cyclical stocks include automobile manufacturers and luxury jewelry retailers.
A cyclical stock is a stock that has historically moved up very quickly in a rising economy and fallen in a depressed one. Common cyclical stocks include automobile manufacturers and luxury jewelry retailers.
Defeasance
To terminate, cancel, absolve, nullify, or end an agreement or contract because certain acts were, or were not, performed. Another, although less common definition, means cash, equity, or bonds that would be sufficient to retire a debt, if necessary. The assets that are set aside are removed from the balance sheet.
To terminate, cancel, absolve, nullify, or end an agreement or contract because certain acts were, or were not, performed. Another, although less common definition, means cash, equity, or bonds that would be sufficient to retire a debt, if necessary. The assets that are set aside are removed from the balance sheet.
Creditor
A creditor is a person who loans money to another person, institution, or company in exchange for interest on their money.
A creditor is a person who loans money to another person, institution, or company in exchange for interest on their money.
Contract
A contract is a legally binding document between two or more people, parties, or companies, that stipulates one party promises to perform (or not to perform) certain actions.
A contract is a legally binding document between two or more people, parties, or companies, that stipulates one party promises to perform (or not to perform) certain actions.
Collateral
Collateral refers to an asset that can seized by the lender in the event of default. The lender can then sell this asset to recover any money that is owed to them. The most commonly understood version of collateral is a home loan, where the homeowner gets a loan from a bank and the bank has the right to foreclose on the house and sell it to recover their money if the homeowner defaults.
Collateral refers to an asset that can seized by the lender in the event of default. The lender can then sell this asset to recover any money that is owed to them. The most commonly understood version of collateral is a home loan, where the homeowner gets a loan from a bank and the bank has the right to foreclose on the house and sell it to recover their money if the homeowner defaults.
Cashier's Check
A cashiers check is one that cannot bounce because a customer pays the bank and then the bank writes the check out of its own account. The check, in other words, comes from the bank and is certain to clear.
A cashiers check is one that cannot bounce because a customer pays the bank and then the bank writes the check out of its own account. The check, in other words, comes from the bank and is certain to clear.
Cartel
A cartel is the term used to describe a group of companies or governments working together in order to completely and totally control a market. One tactic to increase profit margins is to limit production so product supply drastically increases.
A cartel is the term used to describe a group of companies or governments working together in order to completely and totally control a market. One tactic to increase profit margins is to limit production so product supply drastically increases.
Callable Bond
A callable bond is a special type of bond in which the issuer reserves the right to pay the owed amount to the bondholder before the maturity date. If a company calls a bond, the holder of that bond must accept payment, even if he or she doesn't want to and would prefer to continue holding the bond and earning interest. Callable bonds are used by corporations and governments to repurchase their own debt when interest rates drop so they can refinance at cheaper rates.
A callable bond is a special type of bond in which the issuer reserves the right to pay the owed amount to the bondholder before the maturity date. If a company calls a bond, the holder of that bond must accept payment, even if he or she doesn't want to and would prefer to continue holding the bond and earning interest. Callable bonds are used by corporations and governments to repurchase their own debt when interest rates drop so they can refinance at cheaper rates.
Block Trade
A block trade is a type of trade when a large number of stocks or bonds are being bought or sold by wealthy individuals, corporations, pensions, or other institutions. Typically, a block trade begins in the range of 10,000 shares or $200,000 market value.
A block trade is a type of trade when a large number of stocks or bonds are being bought or sold by wealthy individuals, corporations, pensions, or other institutions. Typically, a block trade begins in the range of 10,000 shares or $200,000 market value.
Blitzkrieg Tender Offer
A blitzkrieg tender offer is a takeover offer that is priced so attractively the takeover is completed very quickly. This is often accomplished by pricing the buyout far above the recent stock price.
A blitzkrieg tender offer is a takeover offer that is priced so attractively the takeover is completed very quickly. This is often accomplished by pricing the buyout far above the recent stock price.
Blind Trust
A blind trust is a trust in which the owners have no knowledge of the assets or investments they own. The money is managed by a professional, non-related third-party. Traditionally, politicians, judges, and high profile appointees of the government have placed their assets in blind trust with the President of the United States having his or her assets placed in a blind trust managed by Northern Trust in Chicago.
A blind trust is a trust in which the owners have no knowledge of the assets or investments they own. The money is managed by a professional, non-related third-party. Traditionally, politicians, judges, and high profile appointees of the government have placed their assets in blind trust with the President of the United States having his or her assets placed in a blind trust managed by Northern Trust in Chicago.
Black Tuesday
Black Tuesday was the infamous day the stock market crashed,, falling 13%, leading to panic, and ushering in the Great Depression. Although Black Tuesday gets all of the press, few investors remember or realize that the real bottom didn't occur until 1932-1933.
Black Tuesday was the infamous day the stock market crashed,, falling 13%, leading to panic, and ushering in the Great Depression. Although Black Tuesday gets all of the press, few investors remember or realize that the real bottom didn't occur until 1932-1933.
Black Monday
Black Monday was the day the Dow Jones Industrial Average fell by 22 percent in a single trading session. Black Monday happened on October 19th, 1987.
Black Monday was the day the Dow Jones Industrial Average fell by 22 percent in a single trading session. Black Monday happened on October 19th, 1987.
Black Friday
Black Friday was when the markets crashed on September 24th, 1969 after financiers attempted to corner the gold market unsuccessfully. Their actions resulted in a nationwide depression that caused severe hardship for the population.
Black Friday was when the markets crashed on September 24th, 1969 after financiers attempted to corner the gold market unsuccessfully. Their actions resulted in a nationwide depression that caused severe hardship for the population.
Big Board
The term big board is Wall Street slang for the New York Stock Exchange, which is the largest and most respected stock exchange in the world.
The term big board is Wall Street slang for the New York Stock Exchange, which is the largest and most respected stock exchange in the world.
Beige Book
The Beige Book is a report released by the Federal Reserve Board eight times each year. It is a general report on economic conditions.
The Beige Book is a report released by the Federal Reserve Board eight times each year. It is a general report on economic conditions.
Basis Point
The term basis point is a measurement of percentage often used to compare gains or losses in fixed income investment such as bonds or expense structures in mutual funds. One basis point is equal to 0.01% and a 1% change in an asset is said to be equal to 100 basis points.
The term basis point is a measurement of percentage often used to compare gains or losses in fixed income investment such as bonds or expense structures in mutual funds. One basis point is equal to 0.01% and a 1% change in an asset is said to be equal to 100 basis points.
Bankmail
Bankmail is a legally binding agreement in which a bank promises a company that is involved in a takeover bid that it will not finance any other potential bidder.
Bankmail is a legally binding agreement in which a bank promises a company that is involved in a takeover bid that it will not finance any other potential bidder.
Analyst
An analyst is a person who works for a stock broker or investment bank and spends their time analyzing specific stocks. In many cases, an analyst is assigned to a single industry. Using the information they gather, they are required to make buy, sell, or hold recommendations that are used by portfolio managers and private investors.
An analyst is a person who works for a stock broker or investment bank and spends their time analyzing specific stocks. In many cases, an analyst is assigned to a single industry. Using the information they gather, they are required to make buy, sell, or hold recommendations that are used by portfolio managers and private investors.
Alphabet Stock
A term used to denote different classifications of common stock which are tied to a certain division, subsidiary, or department of a corporation. Each "series" of alphabet stock has different voting rights and dividend payouts.
A term used to denote different classifications of common stock which are tied to a certain division, subsidiary, or department of a corporation. Each "series" of alphabet stock has different voting rights and dividend payouts.
Air Pocket Stock
An air pocket stock is a stock that has a sudden and sharp decline in price due to unexpected disappointing earnings or results.
An air pocket stock is a stock that has a sudden and sharp decline in price due to unexpected disappointing earnings or results.
Affiliate
The term affiliate is used to describe the relationship between two companies in which one owns a substantial, but not controlling, amount of the voting stock. It can also mean when two companies are both subsidiaries of a third company. Since the rise of the Internet, the term affiliate has been used to describe a business relationship between two companies in which one is compensated for generating sales.
The term affiliate is used to describe the relationship between two companies in which one owns a substantial, but not controlling, amount of the voting stock. It can also mean when two companies are both subsidiaries of a third company. Since the rise of the Internet, the term affiliate has been used to describe a business relationship between two companies in which one is compensated for generating sales.
Adverse Selection
Adverse selection is a term used primarily in insurance although it is useful for other industries, as well. It refers to a situation in which the buyer or seller of a product knows something about the product quality or condition that the other party does not know, allowing them to have a better estimate of what the true cost of the product should be.
Adverse selection is a term used primarily in insurance although it is useful for other industries, as well. It refers to a situation in which the buyer or seller of a product knows something about the product quality or condition that the other party does not know, allowing them to have a better estimate of what the true cost of the product should be.
Advance - Decline
The term advance decline on Wall Street refers to the relationship between stocks trading above their opening price and the stocks trading below their opening price. It is used as a measure of the market as a whole, and helps in determining if there is a strong Bull or Bear market in action. By comparing the percentage of stocks that are higher (advanced) than are lower (declined), analysts and investors can get a better sense of the market's mood.
The term advance decline on Wall Street refers to the relationship between stocks trading above their opening price and the stocks trading below their opening price. It is used as a measure of the market as a whole, and helps in determining if there is a strong Bull or Bear market in action. By comparing the percentage of stocks that are higher (advanced) than are lower (declined), analysts and investors can get a better sense of the market's mood.
Active Portfolio Strategy
In an active portfolio strategy, a manager uses financial and economic indicators along with various other tools to forecast the market and achieve higher gains than a buy-and-hold (passive) portfolio. Active portfolio management is the opposite of indexing and can lead to higher fees and commissions, lowering returns.
In an active portfolio strategy, a manager uses financial and economic indicators along with various other tools to forecast the market and achieve higher gains than a buy-and-hold (passive) portfolio. Active portfolio management is the opposite of indexing and can lead to higher fees and commissions, lowering returns.
Active Box
Active Box is a term used to describe securities that are being held as collateral for an investor's margin positions. In the event of default, they can be used to satisfy the balance of the loan.
Active Box is a term used to describe securities that are being held as collateral for an investor's margin positions. In the event of default, they can be used to satisfy the balance of the loan.
Active Asset
An active asset is defined as any asset that is used in the day-to-day operations of a business. If you owned a company that manufactured peanut butter, your active assets would include things such as the machines that crushed the peanuts, poured it into jars, and stuck on the labels.
An active asset is defined as any asset that is used in the day-to-day operations of a business. If you owned a company that manufactured peanut butter, your active assets would include things such as the machines that crushed the peanuts, poured it into jars, and stuck on the labels.
Accrual Bond
An accrual bond is more commonly referred to as a zero coupon bond. It is a type of bond where interest is added to the principal balance due to the bondholder at maturity and not paid out in cash. The bond is sold at a discount to its maturity value based on a financial calculation that will yield a specific amount. Savings bonds are a popular form of the accrual bond or zero coupon bond.
An accrual bond is more commonly referred to as a zero coupon bond. It is a type of bond where interest is added to the principal balance due to the bondholder at maturity and not paid out in cash. The bond is sold at a discount to its maturity value based on a financial calculation that will yield a specific amount. Savings bonds are a popular form of the accrual bond or zero coupon bond.
Accreted Value
Accreted value is the price a bond would sell for if interest rates remained at their current level indefinitely. Private investors and financial analysts use accreted value as one of many sources of information when determining the investments they want to purchase. It has limited usefulness because of the dangers of bond duration.
Accreted value is the price a bond would sell for if interest rates remained at their current level indefinitely. Private investors and financial analysts use accreted value as one of many sources of information when determining the investments they want to purchase. It has limited usefulness because of the dangers of bond duration.
Accounting Equation
The accounting equation is stated as Assets - Liabilities = Shareholder Equity. You can also rearrange the components of the accounting equation to Shareholder Equity + Liability = Assets. Put simply, the accounting equation is the relationship necessary to balance the books of a company in the double entry bookkeeping system that has been the standard of quality management for centuries.
The accounting equation is stated as Assets - Liabilities = Shareholder Equity. You can also rearrange the components of the accounting equation to Shareholder Equity + Liability = Assets. Put simply, the accounting equation is the relationship necessary to balance the books of a company in the double entry bookkeeping system that has been the standard of quality management for centuries.
Acceleration Clause
The acceleration clause is a provision in a loan agreement that states the entire outstanding balance of the loan becomes payable immediately if a certain event or events transpire such as missing a payment. In some cases, the acceleration clause can be triggered by a violating loan covenants.
The acceleration clause is a provision in a loan agreement that states the entire outstanding balance of the loan becomes payable immediately if a certain event or events transpire such as missing a payment. In some cases, the acceleration clause can be triggered by a violating loan covenants.
Acquisition
An acquisition is when one company acquires another one with the acquirer usually being larger than the acquiree, although this is not always the case. An acquisition differs from a merger because a merger usually refers to a marriage of equals.
An acquisition is when one company acquires another one with the acquirer usually being larger than the acquiree, although this is not always the case. An acquisition differs from a merger because a merger usually refers to a marriage of equals.
Accumulate
On Wall Street, the term accumulate has a slightly different definition depending upon who is using it. Accumulate is a "rating" by either a broker or an analyst, which means that shares in a company should not be liquidated or sold, but an investor should add more shares to their portfolio if they have the chance.
On Wall Street, the term accumulate has a slightly different definition depending upon who is using it. Accumulate is a "rating" by either a broker or an analyst, which means that shares in a company should not be liquidated or sold, but an investor should add more shares to their portfolio if they have the chance.
Absorbed
In the world of business, the term absorbed means refers to a business that is merged into another company due to an acquisition or restructuring. The term absorbed can also mean something that is treated as an expense instead of being passed on to the customer.
In the world of business, the term absorbed means refers to a business that is merged into another company due to an acquisition or restructuring. The term absorbed can also mean something that is treated as an expense instead of being passed on to the customer.
Absolute Priority Rule
The absolute priority rule is the rule used in bankruptcy proceedings that states a creditors' claims take priority over shareholders' claims in the event of liquidation. In Wall Street terms, a bond is senior to preferred stock, which is senior to common stock. The absolute priority rule is known as seniority in every day parlance.
The absolute priority rule is the rule used in bankruptcy proceedings that states a creditors' claims take priority over shareholders' claims in the event of liquidation. In Wall Street terms, a bond is senior to preferred stock, which is senior to common stock. The absolute priority rule is known as seniority in every day parlance.
AAA Rating (Triple A)
The phrase Triple A, or AAA, refers to the highest rating awarded by various bond agencies for a specific bond. It indicates that an investment is extremely safe and there is very little risk of default. At any given time, there are very few AAA companies in the world and having a rating this high allows a company to borrow money and raise capital at rates just above the safest world governments, providing a huge competitive advantage.
The phrase Triple A, or AAA, refers to the highest rating awarded by various bond agencies for a specific bond. It indicates that an investment is extremely safe and there is very little risk of default. At any given time, there are very few AAA companies in the world and having a rating this high allows a company to borrow money and raise capital at rates just above the safest world governments, providing a huge competitive advantage.
Profit Center
In the business world, a profit center is an area of a company that adds directly to its bottom line profit. Like with all areas of life following the 80/20 rule, also known as Pereto’s Law, most of a company’s profits are likely to come from only a handful of operations, products, or divisions. Those divisions are known as a profit center and are managed by executives responsible for their contribution to the company's net profit.
In the business world, a profit center is an area of a company that adds directly to its bottom line profit. Like with all areas of life following the 80/20 rule, also known as Pereto’s Law, most of a company’s profits are likely to come from only a handful of operations, products, or divisions. Those divisions are known as a profit center and are managed by executives responsible for their contribution to the company's net profit.
What Does Deleveraging Mean?
As the credit crisis has continued, you may have heard that many companies and individuals have been deleveraging their balance sheets. To learn what deleveraging is and why companies and individuals do it, this article could help.
As the credit crisis has continued, you may have heard that many companies and individuals have been deleveraging their balance sheets. To learn what deleveraging is and why companies and individuals do it, this article could help.
What is the Quiet Period
The quiet period on Wall Street refers to the four weeks leading up to the release of company information. This is informal because there appears to be no legal definition.
The quiet period on Wall Street refers to the four weeks leading up to the release of company information. This is informal because there appears to be no legal definition.
About Investing for Beginners Glossary
The continually updated domestic glossary here at Investing for Beginners. Great design and layout designed for ease of use.
The continually updated domestic glossary here at Investing for Beginners. Great design and layout designed for ease of use.
What is an Accredited Investor
According to Rule 501 of Regulation D, an accredited investor is defined as a wealthy individual with a net worth in excess of $1 million or annual earnings in excess of $200,000. An accredited investor can invest in stocks and other assets that are not available to small investors.
According to Rule 501 of Regulation D, an accredited investor is defined as a wealthy individual with a net worth in excess of $1 million or annual earnings in excess of $200,000. An accredited investor can invest in stocks and other assets that are not available to small investors.
What is a Tracking Stock?
A tracking stock is a special type of stock used to track an operating division or segment. Find out about the pros and cons of owning tracking stock in your portfolio in this investing for beginners article.
A tracking stock is a special type of stock used to track an operating division or segment. Find out about the pros and cons of owning tracking stock in your portfolio in this investing for beginners article.
Campbell R. Harvey's Investment Glossary
Compiled at Duke University, this is one of the most complete glossaries available, recording over 2,500 entries.
Compiled at Duke University, this is one of the most complete glossaries available, recording over 2,500 entries.
Investor Words
The fullest glossary on the net. Find the definition to any financial term you could ever need to know.
The fullest glossary on the net. Find the definition to any financial term you could ever need to know.
Stock Market Glossary
A stock market glossary brought to you by Nasdaq.
A stock market glossary brought to you by Nasdaq.
Yahoo Financial Glossary
A great financial glossary from Yahoo.
A great financial glossary from Yahoo.