wsw-multiple-defs

gistfile1.txt

a
	Used in the dividend column of stock transaction tables in newspapers to indicate a cash payment in addition to regular dividends during the year: 2.75a.
	Used in money market mutual fund transaction tables in newspapers to indicate a yield that may include capital gains and losses as well as current interest: AmCap Reserv a.

account
	The client of a broker, brokerage firm, or broker-dealer. The client may be a business, an individual investor, or an institutional investor.
	The record of a client's transactions and investment position.

agency
	A security issued by a federal agency or federally sponsored corporation.
	A relationship between an agent and a principal in which the agent acts for and represents the principal on the basis of the principal's instructions.

allocate
	To spread systematically a single monetary amount over a number of time periods, usually years. For example, depreciation allocates the cost of a capital asset over its useful life.
	To distribute cost or revenue throughout a number of operations or products. For example, a business must decide how to allocate the costs of running its headquarters over all its operations to determine the profitability of each of those operations.

appreciation
	An increase in value, as of an asset.
	Used to distinguish between securities that are likely to provide profits because of increases in price and those that provide dividend payments.

average-cost method
	A method of determining the value of an inventory by calculating unit cost, that is, the result obtained by dividing the total cost of goods available for sale by the number of units available for sale.
	A method of valuing the cost basis of securities that are sold in order to determine the gain or loss for tax purposes. Average cost is calculated as total cost of shares owned divided by the number of shares owned. The average-cost method is particularly useful for shares acquired at varying prices in a reinvestment plan.

basis
	In futures trading, the difference between the futures price and the spot price. The basis will narrow as a contract moves closer to settlement.
	In taxation, the acquisition cost of an asset adjusted for capital distributions (that is, stock dividends). A security's basis is used in calculating gains and losses for tax purposes.

basis price
	The price of a security quoted in terms of its yield rather than its dollar price. Bonds are often quoted on a basis price reflecting yield to maturity since such information is of greatest importance to an investor deciding to buy or sell.
	The price selected by a specialist at which to execute an odd-lot order on an inactive stock. The large spread on inactive stocks often results in a basis price that splits the difference between the bid and ask.

best-efforts basis
	An agreement by an investment banker to do its best to oversee but not guarantee the sale of a security issue in the primary market.
	An investor's market order to buy or sell a security in which the brokerage firm agrees to obtain the best possible price.

bid
	The price that a potential buyer is willing to pay for a security.
	An offer to purchase something.

board of governors
	An elected body composed of members of a stock exchange that oversees the affairs of the exchange.
	A group of people appointed by the President of the United States to the Federal Reserve to oversee the nation's money system. Decisions by the board have great impact on the securities markets.

board room
	A room or section of a room in a brokerage office in which security prices are displayed.
	The room in which a firm's board of directors meets.

bond
	A long-term promissory note. Bonds vary widely in maturity, security, and type of issuer, although most are sold in $1,000 denominations or, if a municipal bond, $5,000 denominations.
	A written obligation that makes a person or an institution responsible for the actions of another.

book
	A specialist's information on limit orders to buy and sell the security in which the specialist makes a market. The orders are left by other exchange members who wish to trade at a price that differs from the current market price. The book provides the specialist with an estimate of the demand for and supply of the stock in which he or she is a market maker.
	An organization's written accounting record.
	An underwriting syndicate's record of activity for a new security issue.

borrowing power
	A firm's ability to borrow significant amounts of money. This term is often applied to companies having valuable assets but few outstanding debts.
	The amount of money that may be borrowed in a margin account.

break
	A sharp price decline in a particular security or in the market as a whole. A break usually occurs when unexpected negative information is made public and investors rush to sell.
	A discrepancy on the books of a brokerage firm.

breakeven
	The level of output or sales necessary to cover fixed expenses. Companies in industries that have high fixed costs and, consequently, high breakevens, such as automobile and steel manufacturing, are likely to exhibit large fluctuations in earnings.
	The price at which a security position can be closed out with no profit or loss.

buying power
	The amount of liquid funds available for investing. A large amount of buying power indicates that significant funds from investors are available to fuel a bull market.
	The funds in an investor's brokerage account that may be used for purchasing securities. An investor's buying power includes cash balances plus the loan value on securities held in the account.

buy out
	To purchase all the stock of a company or all the stock of a company owned by one investor or by a group of investors. For example, corporate management may decide to buy out an investor in order to halt a potential takeover.
	To terminate a contract before its scheduled termination date by reaching a monetary agreement satisfactory to the parties involved.

buyout
	The purchase of a company.
	The purchase of all the stock of a company, owned by a single investor or by a group of investors.

c
	Used in the dividend column of stock transaction tables of newspapers to indicate that the listed dividend is a liquidating dividend: City Inv 7.50c. 
	Used in money market mutual fund transaction tables in newspapers to indicate funds that are chiefly or wholly exempt from federal income taxes: Fld Tax Exmpt c.

call
	An option that permits its holder to purchase a specific asset at a predetermined price until a certain date. For example, an investor may purchase a call option on General Electric stock that confers the right to buy 100 shares at $25 per share until October 17. Calls are sold for a fee by other investors, who incur an obligation.
	An issuer's right to repurchase an issue of bonds at a predetermined price before maturity. The feature is used when interest rates fall, so that the bonds can be repurchased and a new, lower-rate issue sold. A call feature is normal for nearly all long-term bond issues, and it operates to the detriment of bond owners.
	Redemption of an issue of bonds before maturity by forcing the bondholders to sell at the call price.

carryforward
	A business operating loss that, for tax purposes, may be claimed a certain number of years in the future, often up to 15 years. Thus, a loss in one year would be carried forward to a future year and used to offset profits up to the amount of the carryforward. Carryforwards are especially useful to firms operating in cyclical industries such as transportation.
	In taxation of individuals, net capital losses exceeding the annual limit of $3,000 that may be carried to succeeding years so as to offset capital gains or ordinary income. There is no limit on the amount of capital losses that may be used to offset capital gains in any one year, only on the amount of losses in excess of gains that may be used to offset income.

cash equivalent
	An asset such as property or stock that has a realizable cash value equivalent to a specific sum of money.
	An asset that is so easily and quickly convertible to cash that holding it is essentially equivalent to holding cash. A Treasury bill is a cash equivalent.

clawback
	A provision in an incentive stock option that requires an employee to reimburse the company for any gains from exercising options in the event the employee goes to work for a direct competitor within a specified number of months of exercise.
	Excessive management share of profits that must be refunded to investors of a venture capital fund. A clawback is required when managers of a venture capital fund take a contractual share of early investment gains that are subsequently reduced by losses.

close
	The end of a session of trading.
	The last price at which a security trades during a trading session. The last price is reported in the financial media and is of particular importance to the valuation of investment portfolios.

closing transaction
	The final transaction for a particular security during a trading day.
	An option order that eliminates or decreases the size of an existing option position. An investor who repurchases three options that have been sold short is entering into a closing transaction.

collar
	In options, buying a put and selling short a call so as to limit the potential profit and loss from an investment position.
	The level at which an index triggers a circuit breaker to temporarily stop trading.
	In an acquisition, an upper and lower limit that will be paid for shares of the company to be acquired.
	In a new issue, a limit on the price or interest rate that is acceptable.

competitive bidding
	A method by which a corporation or government organization wishing to sell securities in the primary market chooses an investment banker for the sale on the basis of the best price submitted by interested investment bankers. Municipal governments and public utilities are often required to ask for competitive bids on new security issues.
	The bidding on U.S. Treasury securities in which an investor stipulates a particular price or yield.

confirmation
	A written acknowledgment of a security trade that lists important details of the trade such as date, size of the transaction, price, commission, taxes, and amount of money involved. A confirmation is generally mailed the day after a trade takes place.
	The reaction of one technical indicator (such as the movement of a stock price average) that strengthens a signal given by another indicator.

contract
	In futures trading, an agreement between two parties to make and take delivery of a specified commodity on a given date at a predetermined location.
	In options trading, an agreement by the writer either to buy (if a put) or to sell (if a call) a given asset at a predetermined price until a certain date. The holder of the option is under no obligation to act.

corpus
	The principal of a bond. For example, securities dealers create zero-coupon Treasury receipts by purchasing a regular Treasury bond and separating the interest coupons from the corpus.
	The principal amount of an estate or trust.

coupon
	The annual interest paid on a debt security. A coupon is usually stated in terms of the rate paid on a bond's face value. For example, a 9% coupon, $1,000 principal amount bond would pay its owner $90 in interest annually. A coupon is set at the time a security is issued and, for most bonds, stays the same until maturity.
	The detachable part of a coupon bond that must be presented for payment every six months in order to receive interest.

credit
	The ability to borrow or to purchase goods and services with payment delayed beyond delivery.
	An accounting entry resulting in an increase in liabilities or owners' equity or in a decrease in assets.
	The balance in an account.

crown jewel
	A prized asset of a company.
	Used to refer to a part of a business that is sought by another firm or an investor in a takeover attempt that is hostile to the target firm's management.

deep-out-of-the-money
	Used to describe a call option with a strike price significantly above the market price of the underlying asset. A deep-out-of-the-money call option sells at a low price because in all likelihood it will expire without value.
	Used to describe a put option with a strike price significantly below the market price of the underlying asset. A deep-out-of-the-money put option sells at a low price because in all likelihood it will expire without value.

deficiency
	The amount by which an individual's or an organization's tax liability as computed by the Internal Revenue Service exceeds the tax liability reported by the taxpayer.
	The amount by which a firm's liabilities exceed assets.

delivery
	The transfer of a security to an investor's broker in order to satisfy an executed sell order. Delivery is required by the settlement date.
	The transfer of a specified commodity in order to meet the requirements of a commodity contract that has been sold.

discount
	To adjust the value of an asset on the basis of information rather than activity or events. For example, investors may already have discounted a firm's stock price because of the anticipation of weak earnings.
	To deduct the charge for making a loan from the loan's principal before distributing funds to the borrower.

discount rate
	The interest rate charged by the Federal Reserve on loans to its member banks. A change in this rate is viewed as a strong indicator of Fed policy with respect to future changes in the money supply and market interest rates. Generally, a rise in the discount rate signals increasing interest rates in the money and capital markets.
	The rate at which an investment's revenues and costs are discounted in order to calculate its present value.

discount security
	Any security that is issued at less than face value.
	A money market security, such as a Treasury bill or commercial paper, that is issued at a discount but that matures at face value. The only income received by the investor is the difference between the price paid and the proceeds received at maturity or the sale of the security.

dumping
	The selling of large amounts of a stock or stocks in general at whatever market prices are in effect. For example, investors might dump stocks upon hearing of an outbreak of fighting in some part of the world.
	The selling of a product in one market at an unusually low price while selling the same product at a significantly higher price in another market. For example, a firm may sell a product in its home market at a price covering all costs and then sell the product in a foreign market at a significantly lower price covering only variable costs.

e
	Used in the dividend column of stock transaction tables in newspapers to indicate the dividend that was declared and paid in the preceding 12 months: 1.75e.
	Used in mutual fund transaction tables in newspapers to indicate that the shares trade ex-distribution.

earning power
	The earnings that an asset could produce under optimal conditions. For example, AT&T may currently be earning $2.50 per share; however, under optimal conditions each share could have earnings of $3.75.
	The expected yield on a security.

encumbrance
	A liability on real property. For example, a mortgage encumbers title to real estate because the lender has an interest in the property.
	A commitment within an organization to use funds for a specific purpose. Thus, a college may encumber funds for later payment to cover expenses associated with a faculty member's trip to recruit new professors.

equity
	In a brokerage account, the market value of securities minus the amount borrowed. Equity is particularly important for margin accounts, for which minimum standards must be met.
	Stock, both common and preferred. For example, an investor may prefer investing in equities instead of in bonds.
	In accounting, funds contributed by stockholders through direct payment and through retained earnings.

f
	Used in bond transaction tables in newspapers to indicate a bond that trades flat: Datpnt 8 78 06f.
	Used in mutual fund transaction tables in newspapers to indicate that the price quotation is derived from the previous day's trading: Gro Inc f.

Fannie Mae
	A private, shareholder-owned company created by Congress in 1938 to bolster the housing industry during the depression. Fannie Mae facilitates homeownership by adding liquidity to the mortgage market when it purchases loans from lenders who use the funds received to make additional loans. Fannie Mae finances mortgage purchases by issuing its own bonds or by selling mortgages it already owns to financial institutions. The firm's common stock trades as FNM on the New York Stock Exchange.
	A security issued by this company that is backed by insured and conventional mortgages. Monthly returns to holders of Fannie Maes consist of interest and principal payments made by homeowners on their mortgages.

final dividend
	The final dividend payment from a firm that is liquidating.
	The last dividend of a firm's fiscal year. The final dividend is declared when management is able to estimate rather accurately the firm's earnings and its dividend-paying ability.

firm order
	An investor's order to buy or sell that is not conditional on any additional instruction.
	An order placed on behalf of a broker-dealer firm rather than on behalf of the firm's client.

flat
	Of, relating to, or being a market maker's inventory position that is neither long nor short; that is, the inventory is zero.
	Of, relating to, or being a bond that trades without accrued interest. For example, bonds of a company in bankruptcy proceedings trade flat. A bond trading flat is indicated in bond transaction tables by the symbol f.

float
	Funds that are on deposit at two institutions at the same time because of inefficiencies in the collection system. This situation permits a person or firm to earn extra income because the two institutions are paying interest on the same funds. As an example, a person writes a check on a money market fund in order to make a deposit in a local financial institution. Until that check gets back to the bank on which it was written (a transit often entailing two or three days), the investor receives interest on his or her funds from both institutions.
	The number of shares in public hands and available for trading. Institutional investors require that a security have a large float before they will take a position in it. The large float guards against a substantial price change in the security while the institution is buying.

forward rate
	The expected yield on a given fixed-income security at a particular time in the future. For example, if the yield on 6-month Treasury bills is expected to be 10.5% in a year, this yield is the forward rate on 6-month bills.
	The rate at which a particular currency or commodity may be purchased on a forward contract.

franchise
	An agreement between a firm and another party in which the firm provides the other party with the right to use the firm's name and to sell or rent its products. Selling franchise rights is a method of expanding a business quickly with a minimum of capital.
	A right granted to another party by a government to engage in certain types of business. For example, a firm may obtain a government franchise to supply certain public services within a limited geographic region.

Freddie Mac
	A stockholder-owned corporation chartered by Congress in 1970 to help supply funds to mortgage lenders such as commercial banks, mortgage bankers, savings institutions, and credit unions that in turn make funds available to homeowners and multifamily investors. Freddie Mac purchases mortgages from lenders and then packages the mortgages into guaranteed securities that are sold to investors. The firm's common stock trades as FRE on the New York Stock Exchange.
	A security that is issued by this corporation and is secured by pools of conventional home mortgages. Holders of Freddie Macs receive a share of the interest and principal payments made by the homeowners.

freeriding
	An action taken by a syndicate member to withhold a portion of a new security issue from sale because of a belief that a later reselling of the withheld security will yield a higher price. Freeriding is prohibited by the SEC.
	The purchase and sale of a security in a short period of time without putting up any money. Freeriding by investors is prohibited by Federal Reserve Board's Regulation T.

give-up
	A prohibited practice in which a large investor would direct that a portion of the commission charged in a security trade be handed over to another broker. Give-ups were popular when commission rates were fixed and when large trades produced artificially high commissions that were transferrable to firms that provided the investor with valuable services such as research information.
	The reduction in yield when a bond position is swapped for bonds with a lower coupon.

good faith deposit
	A sum of money required of an investor who is placing an order when that investor is not known to the brokerage firm. A good faith deposit ensures that the customer will follow through with proper payment for a buy order or with delivery of securities for a sell order.
	A sum of money deposited by competing underwriters of a new municipal bond issue. The deposit is a relatively small proportion (usually under 5%) of the value of the issue being underwritten.

goodwill
	The amount above the fair net book value (adjusted for assumed debt) paid for an acquisition. Goodwill appears as an asset on the balance sheet of the acquiring firm and must be reduced in the event the value is impaired.
	The discounted value of a larger-than-normal return on tangible assets. A business may build goodwill over time as loyalty builds among its customer base.

gross income
	For a business, its total revenues exclusive of any expenses.
	For an individual, all income except as specifically exempted by the Internal Revenue Code. For example, an inheritance is specifically excluded from gross income.

gun jumping
	The trading in a security before inside information has been released to the public.
	Solicitation of orders for a new security underwriting before the SEC has approved the registration statement.

hit
	To sell a security at a bid price quoted by a dealer. For example, a trader will hit a bid.
	To lose money on a trade. For example, a dealer may take a hit on the holdings of Moore's Fried Foods' common stock.

illiquid
	Of or relating to an asset that is difficult to buy or sell in a short period of time without its price being affected. For example, a large block of stock or a small amount of an infrequently traded stock is likely to be difficult to sell without a reduced price being offered to potential buyers.
	Of, relating to, or being an investment position in which a low proportion of assets is in cash or near-cash, thereby creating difficulty for the investor who is trying to raise funds for another purpose.

indication
	An estimate of the bid and ask when a security begins trading. Brokers, dealers, or investors may seek an indication before a security begins trading to help them establish a trading strategy in that security.
	A nominal quote disseminated by a stock exchange that gives the range in which a stock will open or reopen.

insider
	A person who, because of his or her position within a firm, has access to proprietary information unavailable to the general public. Although the term obviously includes corporate officers, it also may extend to relatives of these officers or to employees of other firms having a special relationship with the firm in question.
	Officially, an officer, a director, or the owner of 10% or more of a firm's securities.

interest
	Payment for the use of borrowed money.
	An investor's equity in a business.

investment
	Property acquired for the purpose of producing income for its owner. Just as plants and equipment are investments for manufacturers, stocks and bonds are investments for individuals.
	Expenditures made for income-producing assets.

large-cap
	Of or relating to the common stock of a big corporation that has considerable retained earnings and a large amount of common stock outstanding. Large-cap stocks, which are generally well known, include the ones listed in the Dow Jones Averages.
	Of or relating to a mutual fund that chooses to hold a portfolio of large-cap stocks. Large-cap funds tend to have a more stable net asset value than either microcap or mid-cap funds.

last trading day
	The day on which a trader must liquidate a futures position or else be required to receive (if long) or make delivery (if short). Following this day, the particular contract will cease trading.
	The last day on which a particular option is traded. Currently, this day is the third Friday of the expiration month.

liquid
	Of, relating to, or being an asset that may be bought or sold in a short period of time with relatively small price changes engendered by the transaction. A U.S. Treasury bill is an example of a very liquid asset. (Many issues of municipal bonds are not very liquid.)
	Of, relating to, or being an investment position in which most of the assets are in money or near money. This kind of position generally earns a relatively low return but allows the investor to take advantage of other investment opportunities.

liquidity ratio
	A measure of a company's ability to meet its short-term obligations achieved through a comparison of financial variables.
	The value of trading in a stock that is required to change the stock's price by 1%. A high ratio indicates the stock has considerable liquidity. A stock's liquidity ratio is of primary importance to institutions and traders that deal in large volume and that wish to avoid securities with a lack of liquidity.

long-term
	Of or relating to a gain or loss in the value of a security that has been held over a specific length of time.
	Of or relating to a liability for which a long period of time (usually one year) remains until payment of the face amount comes due. A long-term bond is a long-term liability.

m
	Used in bond transaction tables in newspapers to indicate a bond that has matured and is no longer drawing interest: Cuba 4 12 77m.
	Used in the dividend column of stock transaction tables of newspapers to indicate an annual dividend rate that is reduced on the last declaration date: .20m.

margin
	The amount of funds that must be deposited when purchasing securities.
	The equity in an investor's account.

markdown
	A decrease in a security price made by a dealer because of changing market conditions. For example, a bond trader may take a markdown in long-term bonds held in inventory when market interest rates rise.
	The difference between the price paid by a dealer to a retail customer and the price at which the dealer can sell the same security to a market maker.

market maker
	One (as a person or firm) that, on a continuous basis, buys and sells a security for one's own account. Market makers usually try to profit from a rapid turnover in security positions rather than from holding those positions in anticipation of gradual price movements. Specialists on the organized exchanges and dealers in the over-the-counter market are market makers.
	A dealer in options on the floor of an options exchange who makes a market in one or more options. The Chicago Board Options Exchange uses market makers.

markup
	An upward revaluation of a security by a dealer because of a rise in the security's market price. For example, a dealer may decide that a markup on a security issue held in inventory is appropriate because of a rising stock market.
	The difference between the price charged by a dealer to a retail customer and the prevailing price at which the same security is being offered by market makers.

matched orders
	The purchase and sale of the same security by an individual or organized group of individuals with the intention of giving the impression of unusual trading activity in the security. Matching orders is intended to get other investors interested in a particular security, but it is illegal.
	A balance of buy orders and sell orders before the opening of trading in a security.

microcap
	Of or relating to the common stock of a company with a small capitalization, usually between $50 million and $250 million. Microcap stocks tend to experience volatile price movements and are subject to investment fraud schemes. In addition, information about the small companies that issue these stocks may be difficult to obtain. Many microcap stocks trade over the counter and are quoted on the OTC Bulletin Board or the Pink Sheets.
	Of or relating to a mutual fund that holds mostly microcap stocks in its portfolio. Microcap funds tend to exhibit large changes in net asset value.

mid-cap
	Of or relating to the common stock of a company with a middle level of market capitalization, usually within the range of $2 billion to $10 billion, although the cutoff points are fuzzy on both ends.
	Of or relating to a mutual fund that holds mostly mid-cap stocks.

minority interest
	In accounting, the ownership by the parent company of less than 100% of an affiliated firm.
	A proportional ownership of a firm that is insufficient to constitute control. Generally, minority interest is viewed as ownership of less than 50% of the voting shares.

negotiable
	Of, relating to, or being a price that is not firmly established.
	Of or relating to an instrument that is easily transferable from one owner to another owner. With proper endorsement, most securities are negotiable.

neutral
	An investment opinion that is neither bullish nor bearish. A neutral opinion for an individual stock generally indicates the stock should not be purchased or sold.
	Of or relating to an investment position that is likely to produce the best results if the market does not exhibit a major upward or downward movement.

nonparticipating
	Of, relating to, or being a class of preferred stock that does not have the right to participate with common stock in earnings growth through increases in dividends. Nearly all preferred stock issues are nonparticipating.
	Of or relating to a type of life insurance policy in which policyholders do not share in the investment successes or failures of the insurer.

opening
	The beginning of a trading session.
	The initial price at which a security trades for the day.

opening transaction
	The initial transaction during a trading day for a particular security. The price at which an opening transaction takes place is important to investors who have placed market orders before the market opens or who have placed at-the-opening orders, because the price at which the opening transaction takes place is the price that these investors will pay for or the price they will receive for the security.
	An option order that establishes a new investment position or that increases the size of an existing investment position.

overdepreciation
	Depreciation that is more than sufficient to allow for the eventual replacement of the asset being depreciated.
	Depreciation that causes an asset to be carried on a firm's books at a lesser value than it would be worth if it were sold. Overdepreciation produces understated earnings and assets on financial statements.

oversubscribed
	Or, relating to, or being a new security issue for which there are more requests to purchase securities than are securities available for sale. For example, brokers may take a sufficient number of preliminary orders for a new issue of stock for which there are insufficient shares available to satisfy the demand.
	Of, relating to, or being a buyback or takeover attempt in which more securities are offered than the purchaser has agreed to buy. In such a case the purchaser may decide to buy the additional securities or may buy the agreed-upon number on a pro rata basis.

p
	Used in the dividend column of stock transaction tables in newspapers to indicate an initial dividend: .50p.
	Used in mutual fund transaction tables in newspapers to indicate that a distribution cost is charged.

painting the tape
	Illegal trading of a security by manipulators among themselves in order to create the illusion of heavy trading activity, perhaps the kind generated by insiders. The increased trades are then reported on the consolidated tape, a situation that often lures unwary investors into the action. Once the market price of the security escalates, the manipulators will sell out, hoping to make a profit.
	Breaking down larger orders into more numerous smaller orders to have more trades appear on the tape and attract investor interest.

parking
	Placing idle funds in a safe, short-term investment while awaiting the availability of other investment opportunities. Many investors end up parking proceeds from a security sale in a money market account while searching for other securities to purchase.
	Transferring stock positions to another party so that true ownership of the stock will be hidden. For example, an investor involved in the takeover of a company may park securities of the company with other investors so that the management of the target company will not know the extent of the investor's stock ownership. Parking for this purpose is generally illegal.

participating
	Of, relating to, or being an unusual class of preferred stock that participates with common stock in dividend increases according to a specified formula. For example, a participating preferred issue might require that any increases in dividends on common stock above $2 per share be shared equally with preferred.
	Of or relating to a type of life insurance in which the insured shares in the insurer's investment success or lack of success. Owners of participating policies receive dividends from the insurer.

par value
	The stated value of a security as it appears on its certificate. A bond's par value is the dollar amount on which interest is calculated and the amount paid to holders at maturity. Par value of preferred stock is used in a similar way in calculating the annual dividend.
	The minimum contribution made by investors to purchase a share of common stock at the time of issue. Par value is of no real consequence to investors; in fact, many new common stock issues have no stated par value.

passive activity
	An activity involving a trade or business in which the taxpayer does not materially participate.
	Any engagement in real estate rental activity.

payback period
	The length of time needed for an investment's net cash receipts to cover completely the initial outlay expended in acquiring the investment.
	The number of years the higher interest income from a convertible bond (compared with the dividend income from an equivalent investment in the underlying common stock) must persist to make up for the amount above conversion value paid for the convertible.

peg
	To fix the price of a new security issue during the issuance period through buying and selling it in the open market in order to ensure that the price in the secondary market will not fall below the offering price.
	To fix the rate at which foreign currencies exchange with one another.

plus (+)
	Used in the net change column of security transaction tables to indicate a closing price higher than the closing price on the last previous day on which the security was traded.
	Used in reporting closed-end investment company share prices to indicate the percentage amount by which market price exceeds net asset value.
	An addition of one sixty-fourth either to the bid or to the ask price for a government bond. Government securities are usually quoted in thirty-seconds of a dollar; therefore, a quote of $91.03+ indicates a price of $91 332 +  164, or $91 764.

premium
	The price at which an option trades. The size of the premium is affected by various factors including the time to expiration, interest rates, strike price, and the price and price volatility of the underlying asset.
	The amount by which a bond sells above its face value.
	The excess by which a warrant trades above its theoretical value.
	The amount by which a convertible bond sells above the price at which the same bond without the convertible feature would sell.

principal
	The face amount of a bond. Once a bond has been issued, it may sell at more or less than its principal amount, depending upon changes in interest rates and the riskiness of the security. At maturity, however, the bond will be redeemed for its principal amount.
	Funds put up by an investor.
	The person who owns or takes delivery of an asset in a trade. For example, an investor is the principal for whom a broker executes a trade.

publicly held
	Of, relating to, or being securities that are freely transferable among investors. For example, stock owned by institutional investors is publicly held, but unregistered stock held by a firm's founder is not publicly held.
	Of, relating to, or being a publicly traded company.

purchasing power
	Consumer ability to purchase goods and services. Increased purchasing power represents proportionately larger increases in income than increases in the cost of goods and services.
	The ability to purchase goods and services with a fixed amount of money. Within this narrower application, purchasing power is inversely related to the consumer price index. Increased purchasing power is a signal that future increases in economic activity are likely.

quarter
	One quarter of a point. For bond quotes, a quarter represents one quarter of 1% of par, or $2.50. Thus, a bond quoted at 91 24 is being offered for $917.50.
	A 3-month period that represents 25% of a fiscal year.

r
	Used in the dividend column of stock transaction tables in newspapers to indicate the amount of dividends declared or paid in the preceding 12 months plus a stock dividend: PE Cp .25r.
	Used in mutual fund transaction tables in newspapers to indicate funds that levy a deferred sales charge when shares are sold: IDS Inc r. 
	Used in bond transaction tables in newspapers to indicate a registered security. Although most bonds are registered, this symbol is used when a distinction is necessary, as when a bond trades in registered and in bearer form: NoPac 3.47r.

recovery
	The rising price of an asset. For example, following an extended decline in the price of precious metals, investor expectations of future inflation may generate recoveries in gold and silver prices.
	Increased economic activity during a business cycle, resulting in growth in the gross domestic product.

registered competitive market maker
	A dealer registered with the National Association of Securities Dealers to make a market in one or more securities. A registered competitive market maker must give the market firm bid and ask prices.
	A floor trader on the New York Stock Exchange.

required rate of return
	The minimum rate of return that an investment must provide or must be expected to provide in order to justify its acquisition. For example, an investor who can earn an annual return of 11% on certificates of deposit may set a required rate of return of 15% on a more risky stock investment before considering a shift of funds into stock. An investment's required return is a function of the returns available on other investments and of the risk level inherent in a particular investment.
	The minimum rate of return required by an investor, a stipulation that limits the types of investments the investor can undertake. For example, a person with a required rate of return of 15% would generally have to invest in relatively risky securities.

retirement
	The disposal of a fixed asset at the end of its useful life. Retirement may result in a gain or loss, depending upon any compensation received for the asset and whether the asset is carried at a positive book value.
	The voiding of a firm's own stock that has been reacquired and is being held as Treasury stock.

run
	A dealer's list of security offerings with respective bid and ask quotes.
	A sequence of security price movements in the same direction. Five straight days in which a stock price closes higher is an example of a run. Runs have been evaluated in order to determine if the charting of stock is a worthwhile way to earn an above-average return.

s
	Used in stock transaction tables in newspapers to indicate that the stock has been split or that the firm has paid a stock dividend of at least 25% within the past 52 weeks: Getty s.
	Used on the consolidated tape to indicate the size of a transaction as a multiple of 100 shares: Gy 9s81.
	Used in bond transaction tables in newspapers to separate a bond's coupon and year of maturity: Deere 9s01.

safe harbor
	A regulation that protects individuals or corporations from the legal consequences of certain actions they undertake. For example, firms filing forecasts with the SEC have a safe harbor from individuals or businesses that use the forecasts and are subsequently damaged (that is, they lose money), as long as the forecasts were prepared in good faith.
	A tactic in which the target of an unfriendly takeover makes itself less attractive by taking a specific action.

scalper
	A market maker who assigns excessive markups or markdowns on security transactions. Such activity is in violation of National Association of Securities Dealers rules.
	An investment adviser who takes a position in a security before publicly recommending the security for purchase. The scalper then sells the security at a profit after the recommendation has caused investors to buy the security and push its price higher. This type of activity must be disclosed to buyers.
	An in-and-out trader who attempts to profit on relatively small price changes.

securities loan
	A loan made to an investor for the purpose of buying securities. The loan is secured by the securities.
	The lending of securities by one broker-dealer to another broker-dealer. Securities loans generally occur when broker-dealers need to borrow securities for delivery on customers' short sales.

security
	An instrument that, for a stock, shows ownership in a firm; for a bond, indicates a creditor relationship with a firm or with a federal, state, or local government; or signifies other rights to ownership.
	Collateral used to guarantee repayment of a debt.

share
	A single unit of a class of ownership in a corporation, represented by a stock certificate.
	A single unit of ownership in a mutual fund.
	The portion of a market controlled by a particular firm.

short position
	A net investment position in a security in which the security has been borrowed and sold but not yet replaced. Essentially, it is a short sale that has not been covered.
	An investment position in which the investor either has written an option or has sold a commodity contract, with the obligation remaining outstanding.

short-term
	Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. For individual tax purposes, an asset held for a year or less is classified as short-term.
	Of or relating to a debt security in which a short period of time remains until the face value is paid to the investor. Exactly what constitutes short-term is subjective, although five years and under may be considered the norm.
	Of or relating to business assets that are expected to be converted to cash within one year and to business liabilities that are due within one year.

SLD
	Used on the consolidated tape to indicate a transaction that is reported out of sequence. For example, a transaction that occurred earlier in the day may be reported late: IBM.SLD 6s35.
	Used on transaction slips to indicate the side of a trade in which securities are sold.

small-cap
	Of or relating to the common stock of a relatively small firm having little equity and few shares of common stock outstanding. Small-caps tend to be subject to large price fluctuations; therefore, the potential for short-term gains and losses is great.
	Of or relating to mutual funds that invest in the stock of small-cap companies.

split offering
	The sale of a new bond issue that is composed of serial bonds and term bonds. Many municipal issues are sold as split offerings.
	A security offering that consists of new and previously issued securities of the issuer. For example, a corporation may undertake an issue of common stock that is composed of new shares and shares being held as Treasury stock.

spread
	A position taken in two or more options or futures contracts to profit through a change in the relative price relationships. Purchasing an option to expire in October and selling an option on the same asset expiring three months earlier is one example of a spread.
	The difference in price between two futures contracts that are identical except for delivery date.
	The difference between the bid and ask prices for a particular security. A large spread often indicates inactive trading of the security.
	The difference in yields between two fixed-income securities.

stop order
	An order to buy or to sell a security when the security's price reaches or passes a specified level. At that time the stop order becomes a market order and the executing broker, usually the specialist, obtains the best possible price. A stop order to buy must be at a price above the current market price and a stop order to sell must have a specified price below the current market price.
	An order from the SEC suspending a registration statement when an omission or a misstatement has been found.

straddle
	In futures, the purchase of a contract for delivery in one month and sale of a contract for delivery in a different month on the same commodity.
	In options, the purchase or sale of both a call and a put, generally with the same strike price and expiration date. The buyer of a straddle benefits from large price fluctuations in the underlying asset, while the seller of a straddle, who collects the premiums, benefits from small price changes in the underlying asset.

t
	Used in the dividend column of stock transaction tables in newspapers to indicate the market value as of the distribution date of stock dividends paid during the preceding 12 months. Stocks with this listing paid no cash dividends: Jetron .71t.
	Used in bond transaction tables in newspapers to indicate a floating-rate bond or note: Amoco 8.05s89t.

tail
	In a bid for a new security issue, the portion of the bid price that follows the decimal. For example, a bid of $92.125 has a tail of .125.
	The difference between the average bid and the lowest bid at an auction for Treasury securities.

take delivery
	To accept a commodity to be delivered as part of a long futures contract. For example, the buyer of a gold futures contract who will need the metal on the delivery date may plan to take delivery rather than close out the contract.
	To accept certificates for securities that have been purchased.

takedown
	An investment banker's share of a new security offering.
	The price paid by an underwriter for securities to be sold as part of a new issue.

take out
	The extra funds generated in an account when an investor sells one block of securities and buys another block at a lower total cost. For example, a customer may sell $50,000 face amount of bonds at 85 and then purchase $50,000 face amount of a different bond at 80.
	A bid for a seller's remaining position in a security.

target price
	The price that an investor or a security analyst expects a security to achieve. Generally, when a security achieves the target price, it is time to close out a position in it.
	The price at which an investor hopes to purchase an asset. For example, a company desiring to take over another firm may set a target price for the firm.

term
	The period during which a bond will remain outstanding.
	The length of time that a person is to serve in a usually official capacity. For example, a firm's directors may be elected for terms of three years each.

transfer
	To record a change of ownership in a security on the issuer's books.
	To deliver a security to the buyer's broker by the seller's broker.

turnaround
	The process of moving from a period of losses or low profitability into a more profitable stage. A turnaround may be triggered by a number of factors including a better use of assets or the development of new products and services.
	A security that is in the process of reversing a declining price trend.
	The purchase and sale of a security on the same day.

turnover
	The trading volume of the market or of a particular security.
	The number of times that an asset is replaced during a given period. For example, an inventory turnover of five indicates that the firm's inventory has been turned into sales and has been replaced five times.

turnover rate
	The trading volume in a particular stock during a time period (generally one year) as a percentage of the total number of shares of that stock outstanding. The turnover rate adjusts for the differences in outstanding shares and provides a measure of the relative activity in a stock.
	For an investment company, the volume of shares traded as a percentage of the number of shares in the company's portfolio. A high turnover rate may indicate excessive trading and commissions.

underdepreciation
	Depreciation that is insufficient to allow for the eventual replacement of the asset being depreciated. Underdepreciation is generally caused by rising prices on replacement assets.
	Depreciation that causes an asset to be carried on a firm's books at a greater value than it would have if it were sold. Underdepreciation results in overstated earnings and assets on the firm's financial statements.

underlying asset
	The physical and financial asset to which a security holder or a class of security holders has a claim. An analyst may believe that a stock is underpriced on the basis of the value of the firm's underlying assets and the potential earning power of those assets.
	The asset that underlies and gives value to a security. The underlying asset of a stock option is the stock that the option can be used to purchase. Likewise, the underlying asset of a convertible bond is the stock for which the bond can be exchanged. The market value of a security is directly affected by changes in the value of any underlying asset into which it may be exchanged.

unwind
	To close out a relatively complicated investment position. For example, an investor who practices arbitrage by taking one position in stocks and the opposite position in option contracts would have to unwind by the date on which the options would expire.
	To rectify a transaction in which a mistake has been made. For example, because of a misunderstanding, a brokerage firm may have bought the wrong stock for a customer. The firm must then unwind the erroneous trade by selling the stock just purchased and buying the correct stock.

upgrading
	An increase in the quality rating of a security issue. An upgrading may occur for a variety of reasons, including an improved outlook for a firm's products, increased profitability, or a reduction in the amount of debt the firm has outstanding. As circumstances change, upgrading or downgrading of a security takes place once the issue has been initially rated and sold. An upgrading generally can be expected to have a positive influence on the price of the security.
	An increase in the quality of securities held in a portfolio.

when-distributed
	Used to refer to a security that trades after the date of issue but before the time at which the certificates are delivered.
	Of or relating to a security on which a distribution is scheduled but has not yet occurred.

withholding
	The holding back of a portion of wages, dividends, interest, pension payments, or various other sources of income for payment of taxes to the U.S. Treasury.
	The illegal holding back of a portion of securities allocated as part of a new issue to a member of an underwriting syndicate. The underwriter may wish to keep the securities or resell them to a designated party so as to profit from an expected price rise soon after the issue has been offered to the public.

workout
	The process of a debtor's meeting a loan commitment by satisfying altered repayment terms. For example, a firm in Chapter 11 bankruptcy proceedings might reach an agreement with its creditors for ways in which the firm's obligations can be worked out.
	A range of prices within which a transaction or a series of transactions is likely to take place. For example, a market maker might quote a price range within which he or she would attempt to buy or sell a large order of securities.

z
	Used in stock transaction tables in newspapers to indicate that the volume reported is the actual number of shares transacted, not the number of round lots: z150. 
	Used in over-the-counter stock transaction tables to indicate that no representative quote is available: z.