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ACCRUED INTEREST  look up translate image
The interest due on a bond since the last interest payment was made. The buyer of the bond pays the market price plus accrued interest.
ACQUISITION  look up translate image
The acquiring of control of one corporation by another. In "unfriendly" takeover attempts, the potential buying company may offer a price well above current market values, new securities and other inducements to stockholders. The management of the subject company might ask for a better price or try to join up with a third company. (See: Merger, Proxy)
AMERICAN DEPOSITARY RECEIPT (ADR)  look up translate image
a security issued by a U.S. bank in place of the foreign shares held in trust by that bank, thereby facilitating the trading of foreign shares in U.S. markets.
AMERICAN STOCK EXCHANGE (AMEX)  look up translate image
The second largest stock exchange in the United States, located in the financial district of New York City. (Formerly known as the Curb Exchange from its origin on a Manhattan street.)
AMORTIZATION  look up translate image
Accounting for expenses or charges as applicable rather than as paid. Includes such practices as depreciation, depletion, write-off of intangibles, prepaid expenses and deferred charges.
ANNUAL REPORT  look up translate image
The formal financial statement issued yearly by a corporation. The annual report shows assets, liabilities, revenues, expenses and earnings - how the company stood at the close of the business year, how it fared profit-wise during the year, as well as other information of interest to shareowners.
ARBITRAGE  look up translate image
A technique employed to take advantage of differences in price. If, for example, ABC stock can be bought in New York for $10 a share and sold in London at $10.50, an arbitrageur may simultaneously purchase ABC stock here and sell the same amount in London, making a profit of $.50 a share, less expenses. Arbitrage may also involve the purchase of rights to subscribe to a security, or the purchase of a convertible security - and the sale at or about the same time of the security obtainable through exercise of the rights or of the security obtainable through conversion. (See: Convertible, Rights)
ASSETS  look up translate image
Everything a corporation owns or that is due to it: cash, investments, money due it, materials and inventories, which are called current assets; buildings and machinery, which are known as fixed assets; and patents and goodwill, called intangible assets. (See: Liabilities)
AUCTION MARKET  look up translate image
The system of trading securities through brokers or agents on an exchange such as the New York Stock Exchange. Buyers compete with other buyers while sellers compete with other sellers for the most advantageous price.
AUDITOR'S REPORT  look up translate image
Often called the accountant's opinion, it is the statement of the accounting firm's work and its opinion of the corporation's financial statements, especially if they conform to the normal and generally accepted practices of accountancy.
AVERAGES  look up translate image
Various ways of measuring the trend of securities prices, one of the most popular of which is the Dow Jones Industrial Average of 30 industrial stocks listed on the New York Stock Exchange. The prices of the 30 stocks are totaled and then divided by a divisor that is intended to compensate for past stock splits and stock dividends, and that is changed from time to time. As a result, point changes in the average have only the vaguest relationship to dollar-price changes in stocks included in the average. (See: NYSE Composite Index)
AVERAGING  look up translate image
(See: Dollar-cost-averaging)
BALANCE SHEET  look up translate image
A condensed financial statement showing the nature and amount of a company's assets, liabilities and capital on a given date. In dollar amounts, the balance sheet shows what the company owned, what it owed and the ownership interest in the company of its stockholders. (See: Assets, Earnings report)
BASIS POINT  look up translate image
One gradation on a 100-point scale representing 1%; used especially in expressing variations in the yields of bonds. Fixed income yields vary often and slightly within one percent and the basis point scale easily expresses these changes in hundredths of 1%. For example, the difference between 12.83% and 12.88% is 5 basis points.
BEAR  look up translate image
Someone who believes the market will decline. (See: Bull)
BEAR MARKET  look up translate image
A declining market. (See: Bull market)
BEARER BOND  look up translate image
A bond that does not have the owner's name registered on the books of the issuer. Interest and principal, when due, are payable to the holder. (See: Coupon bond, Registered bond)
BID AND ASKED  look up translate image
Often referred to as a quotation or quote. The bid is the highest price anyone wants to pay for a security at a given time, the asked is the lowest price anyone will take at the same time. (See: Quote)
BLOCK  look up translate image
A large holding or transaction of stock popularly considered to be 10,000 shares or more.
BLUE CHIP  look up translate image
A company known nationally for the quality and wide acceptance of its products or services, and for its ability to make money and pay dividends.
BLUE SKY LAWS  look up translate image
A popular name for laws various states have enacted to protect the public against securities frauds. The term is believed to have originated when a judge ruled that a particular stock had about the same value as a patch of blue sky.
BOND  look up translate image
Basically an IOU or promissory note of a corporation, usually issued in multiples of $1,000 or $5,000, although $100 and $500 denominations are not unknown. A bond is evidence of a debt on which the issuing company usually promises to pay the bondholders a specified amount of interest for a specified length of time, and to repay the loan on the expiration date. In every case a bond represents debt - its holder is a creditor of the corporation and not a part owner, as is the shareholder. (See: Collateral, Convertible, Debenture, General mortgage bond, Income bond)
BOOK VALUE  look up translate image
An accounting term. Book value of a stock is determined from a company's records, by adding all assets then deducting all debts and other liabilities, plus the liquidation price of any preferred issues. The sum arrived at is divided by the number of common shares outstanding and the result is book value per common share. Book value of the assets of a company or a security may have little relationship to market value.
BROKER  look up translate image
An agent who handles the public's orders to buy and sell securities, commodities or other property. A commission is charged for this service. (See: Commission broker, Dealer)
BROKERS' LOANS  look up translate image
Money borrowed by brokers from banks or other brokers for a variety of uses. It may be used by specialists to help finance inventories of stock they deal in; by brokerage firms to finance the underwriting of new issues of corporate and municipal securities; to help finance a firm's own investments; and to help finance the purchase of securities for customers who prefer to use the broker's credit when they buy securities. (See: Margin)
BULL  look up translate image
One who believes the market will rise. (See: Bear)
BULL MARKET  look up translate image
An advancing market. (See: Bear market)
BUY SIDE  look up translate image
The portion of the securities business in which institutional orders originate.
CALLABLE  look up translate image
A bond issue, all or part of which may be redeemed by the issuing corporation under specified conditions before maturity. The term also applies to preferred shares that may be redeemed by the issuing corporation.
CAPITAL GAIN OR CAPITAL LOSS  look up translate image
Profit or loss from the sale of a capital asset. The capital gains provisions of the tax law are complicated. You should consult your tax advisor for specific information.
CAPITAL STOCK  look up translate image
All shares representing ownership of a business, including preferred and common. (See: Common stock, Preferred stock)
CAPITALIZATION  look up translate image
Total amount of the various securities issued by a corporation. Capitalization may include bonds, debentures, preferred and common stock, and surplus. Bonds and debentures are usually carried on the books of the issuing company in terms of their par or face value. Preferred and common shares may be carried in terms of par or stated value. Stated value may be an arbitrary figure decided upon by the director or may represent the amount received by the company from the sale of the securities at the time of issuance. (See: Par)
CASH FLOW  look up translate image
Reported net income of a corporation plus amounts charged off for depreciation, depletion, amortization, and extraordinary charges to reserves, which are bookkeeping deductions and not paid out in actual dollars and cents. (See: Amortization, Depreciation)
CASH SALE  look up translate image
A transaction on the floor of the stock exchange that calls for delivery of the securities the same day. In "regular way" trade, the seller is to deliver on the third business day, except for bonds, which are the next day. (See: Regular way delivery)
CERTIFICATE  look up translate image
The actual piece of paper that is evidence of ownership of stock in a corporation. Watermarked paper is finely engraved with delicate etchings to discourage forgery.
CERTIFICATE OF DEPOSIT (CD)  look up translate image
A money market instrument characterized by its set date of maturity and interest rate. There are two basic types of CDs: traditional and negotiable. Traditional bank CDs typically incur an early-withdrawal penalty, while negotiable CDs have secondary market liquidity with investors receiving more or less than the original amount depending on market conditions.
COLLATERAL  look up translate image
Securities or other property pledged by a borrower to secure repayment of a loan.
COMMERCIAL PAPER  look up translate image
Debt instruments issued by companies to meet short-term financing needs.
COMMISSION  look up translate image
The broker's basic fee for purchasing or selling securities or property as an agent.
COMMISSION BROKER  look up translate image
An agent who executes the public's orders for the purchase or sale of securities or commodities.
COMMON STOCK  look up translate image
Securities that represent an ownership interest in a corporation. If the company has also issued preferred stock, both common and preferred have ownership rights. Common stockholders assume the greater risk, but generally exercise the greater control and may gain the greater award in the form of dividends and capital appreciation. The terms common stock and capital stock are often used interchangeably when the company has no preferred stock.
COMPETITIVE TRADER  look up translate image
A member of the exchange who trades in stocks on the floor for an account in which there is an interest. Also known as a registered trader.
CONGLOMERATE  look up translate image
A corporation that has diversified its operations usually by acquiring enterprises in widely varied industries.
CONSOLIDATED BALANCE SHEET  look up translate image
A balance sheet showing the financial condition of a corporation and its subsidiaries. (See: Balance sheet)
CONSOLIDATED TAPE  look up translate image
The ticker tape reporting transactions in NYSE-listed securities that take place on the NYSE or any of the participating regional stock exchanges and other markets. Similarly, transactions in AMEX-listed securities, and certain other securities listed on regional stock exchanges, are reported on a separate tape.
CONVERTIBLE  look up translate image
A bond, debenture or preferred share that may be exchanged by the owner for common stock or another security, usually of the same company, in accordance with the terms of the issue.
CORRESPONDENT  look up translate image
A securities firm, bank or other financial organization that regularly performs services for another in a place or market to which the other does not have direct access. Securities firms may have correspondents in foreign countries or on exchanges of which they are not members. Correspondents are frequently linked by private wires. Member organizations of the NYSE with offices in New York may also act as correspondents for out-of-town member organizations that do not maintain New York offices.
COUPON BOND  look up translate image
Bond with interest coupons attached. The coupons are clipped as they come due and presented by the holder for payment of interest. (See: Bearer bond, Registered bond)
CUMULATIVE PREFERRED  look up translate image
A stock having a provision that if one or more dividends are omitted, the omitted dividends must be paid before dividends may be paid on the company's common stock.
CUMULATIVE VOTING  look up translate image
A method of voting for corporate directors that enables the shareholders to multiply the number of their shares by the number of directorships being voted on and to cast the total for one director or a selected group of directors. A 10-share holder normally casts 10 votes for each of, say, 12 nominees to the board of directors. One thus has 120 votes. Under the cumulative voting principle, one may do that or may cast 120 (10 x 12) votes for only one nominee, 60 for two, 40 for three, or any other...(more)
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Investment terms
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Created on 2011-05-13 00:01:18
Number of terms 241
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Sources
  • FINRA - Glossary
    www.finra.org
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  • InvestorWords.com - Investing Glossary
    www.investorwords.com
    InvestorWords - The Most Comprehensive Investing Glossary on the Web! Over 6000 financial and investing definitions, with links between related terms.
  • Raymond James | Glossary of Investment Terms
    www.raymondjames.com
    Glossary of investment and financial terminology.