Term
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Definition
| a tax free exchange of one annuity contract for another, one life insurance policy for another, or one life insurance policy for an annuity. The contracts do not have to be issued by the same company |
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Term
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Definition
| A public corporation's quarterly report filed with the SEC and made available to shareholders. Required by the Securities Exchange Act of 1934 |
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Term
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Definition
| a public corporation's audited annual report filed with the SEC and sent to shareholders. Required by the Securities Exchange Act of 1934 |
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Term
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Definition
| an operating expense to mutual fund investors covering distribution expenses (selling, advertising). For no-load funds the maximum 12b-1 fee is .25% |
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Term
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Definition
| qualified defined contribution plan usually offering employer-matched contributions |
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Term
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Definition
| tax-exempt, non-profit organization retirement plans funded with pre tax dollars |
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Term
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Definition
| diversification formula for a fund advertising itself as "diversified" 75% of the portfolio must have no more than 5% of assets invested in any one security, and no more than 10% of a company's outstanding shares may be owned |
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Term
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Definition
| Mutual fund shares sold with a front end sales load/charge. Lower annual expenses than B- and C-shares |
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Term
| Acceptance, Waiver and consent (AWC) |
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Definition
a method used to settle relatively minor ciolations of the conduct rules with the NASD. The hearing is waived and the person who violated rules accepts the findings of the disciplinary committee and consents to stop screwing up. |
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Term
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Definition
| a fancy name for a registered rep or securities salesperson. The AE on a trade confirmation is identified by his or her initials to aid the client in his or her attempts to blame somebody when the stock goes down |
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Term
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Definition
| a high-net worth investor who can do things the average joe can't. Has over 1 million net worth or earns over 200k a year, 300k for married couples. can also buy unregistered shares on the primary market through private placements. |
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Term
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Definition
| what the buyer pays the seller on most bond transactions. this is the seller's rightful portion of the next interest check that the buyer will recieve |
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Term
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Definition
| what the purchaser of an annuity buys during the pay-in phase, representing a proportional share of the separate account |
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Term
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Definition
| a property tax. "as to value" --As the value of your house goes up, so do your porperty taxes |
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Term
| adjustable rate preferred stock |
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Definition
| preferred stock whose dividend is tied to another rate, often the rate paid on T-bills |
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Term
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Definition
| american depository receipt/share. a foreign stock on a domestic market. Denominated in dollars leaving the investor subject to foreign exchange risk. Sponsored ADR's typically give voting rights to the holder, while unsponsored ADR's typically do not. Toyota Motors Corp trades on the NYSE as an ADR with the sumbol TM |
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Term
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Definition
| Assumed Interest Rate. Determined by an actuary, representing his best estimate of the monthly annualized rate of return from the separate account. Used to determine value of annuity units for annuities and death ben |
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Term
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Definition
| a type of underwriting whereby the syndicate will cancel the offering if a sufficient dollar amount is not raised |
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Term
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Definition
| what the annuitant holds during the pay-out phase. Value tied to AIR |
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Term
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Definition
| a strategy of trying to profit from an inefficiency or disparity of prices between two securities. If a converible bond is trading for less than the underlying shares of stock, an "arbitrage opportunity: is available for anyone aggressive enough to short the stock and cover it by purchaseing the bonds. Or, if a larger company looks likely to buy a smaller company, an arbitrageur could buy calls on the smaller company's stock and buy puts on/sell calls against the larger company's stock, betting that the announcement will send the smaller company's stock up and the acquiring company's stock down, at least temporarily. |
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Term
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Definition
| the higher price in a quote representing what the customer would have to pay/what the dealer is asking the customer to pay. Customers buy at the ASK becuase dealers sell to customers at the ASK price |
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Term
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Definition
| pluses to a company's or indivitual's account: cash, investments, accounts receivable, inventory, etc. |
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Term
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Definition
| maintaining a percentage mix of equity, debt and money market investments, based either on the inestor's age (strategic) or market expectations (tactical). |
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Term
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Definition
| a registered rep or principal of a broker-dealer. the poeple who need to take license exams such as the 7 and 24 |
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Term
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Definition
| number of shares a company is authorized to issue by its corporate charter |
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Term
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Definition
| mutual fund shares charging a load on the back end. B-back end. When the investor sells/ redeems the shares, a percentage is retained for the distributors. The percentage declines over time and after 6-8 years, the shares typically convert to A-shares, which charge lower annual operating expenses. |
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Term
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Definition
| failure to honor a firm quote on teh OTC market, a violation |
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Term
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Definition
| all money flowing into versus out of a country, Includes trade with foreign nations as well as investors. |
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Term
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Definition
| exports from a country versus imports into the country. More exports = a trade surplus. more imports = deficit |
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Term
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Definition
| a statement of financial condition in which the assets are compared to the liabilities of an individual or a company |
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Term
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Definition
| a fund that maintains a mix of stocks and bonds at all times |
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Term
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Definition
| a loan in which some of the principal is paid offf early with most of it coming due at the very end. some bonds and some mortages are structured this way |
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Term
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Definition
| a way of measuring bond yields or other percentages in the financial industry. each basis point is 1% of 1%. Example 2% =.0200 = 200 basis points. |
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Term
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Definition
| a type of underwriting leaving the syndicate at no risk for unsold shares, and allowing them to keep the proceeds on the shares that were sold/subscribed to. |
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Term
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Definition
| a measure of stock's or a portfolio's volatility compared to the overall market. a beta of more than 1 means the investment is more volatile than the overall market, while a beta of less than 1 means the opposite |
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Term
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Definition
| what a dealer is willing to pay to a customer who wants to sell. customers sell at the bid, buy at the ask |
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Term
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Definition
| a stock transaction of at least 10,000 shares |
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Term
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Definition
| a daily record of all transactions effected through a broker-dealer |
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Term
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Definition
| a stock in a well established company. ideal for growth investors with limed risk tolerance. |
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Term
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Definition
| a reference to state securities law and state registration requirements for securities, agents , broker-dealers and invesment advisers. |
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Term
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Definition
| the group in charge of directing a company by establishing policies, hiring and firing officers, reporting the financials, etc. Elected by the shareholders. |
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Term
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Definition
| a debt security issued by a corporation or governmental entity that promises to repay principal and pay interest either regulary or at maturity. |
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Term
| bonbond bond anticipation note (BAN) |
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Definition
| a short term not that amunicipality uses to borrow money that will be paid back from the proceeds of an upcoming bond sale. |
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Term
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Definition
| the law firm that renders a legal opinion concerneing an issue of municipal securities |
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Term
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Definition
| 1% of a bond's par value. 1 bond point = $10 |
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Term
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Definition
| a security maintained as a computer record rather than a physical certificate All us treasuries and many mutual funds are issued in this manner. |
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Term
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Definition
| the hypothetical liquidating alue of a share of common stock close to its book balue gives an investor a "margin of safety", a term used by benjamin grahm, warren buffett's professor at columbia and thae father of "balue investing" |
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Term
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Definition
| any location identified by any means to the public or customers as a location at which the member conducts an investment banking or securities business. |
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Term
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Definition
| a discounted sales charge or "vilume discount" offered on A-shares at various levels of investment. |
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Term
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Definition
| preventing an investor from aachieving a breakpoing. a violation |
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Term
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Definition
| interest rate that broker-dealers pay when borrowing on behalf of margin customers |
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Term
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Definition
| any person in the business of effecting transactions in securities for the account of others (broker) or for its own account (dealer). Morgan_stanley, for example, or bear stearns, Goldman Sachs, |
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Term
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Definition
| OTC stocks too volatile and low priced for NASDAW. a sort of purgator for former internet high -flyers |
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Term
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Definition
| a progression of expansions, peaks, contractoins, troughs, and recoveries for the overall (marco) economy |
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Term
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Definition
Often called "level load". Mutual fund shares bought with a 1% 12b-1 fee (high annual expenses) and usually no front-end load. Suitable only for shorter term investors.
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Term
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Definition
| noun - a derivative that gives the holder the right to buy something at a stated exercies price. Verb-(to-buy) |
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Term
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Definition
| the period during which a security may not be called or bought by the issuer, usually lasting five years or more |
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Term
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Definition
| the risk that interest rates will fall and bonds will be called/forcibly redeemed early |
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Term
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Definition
| simultaneously buying a call and selling a call on the same underlying instrument |
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Term
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Definition
| a security that may be purchased/called by the issuer as of a certain date, e.g., callable preferred, callable bonds, Generally pays a higher rate of return than non-callable securities, as it gives the issuer flexibility in financing. |
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Term
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Definition
| selling a security for more than you bought it |
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Term
| capital gains distribution |
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Definition
| distribution from fund to investor based on net capital gains realized by the fund portfolio |
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Term
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Definition
| selling a security for less than you bought it |
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Term
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Definition
| the risk that an investor will lose some or all of his investment. |
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Term
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Definition
| a form of market manipulation in which shady characters sell a stock in order to depress its price |
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Term
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Definition
| a securities account requiring the customer to pay for all transactions in full, no later than five businss days after the trade or "two days after regular way settlement, " As opposed to a margin account in which an investor can purchase stocks and bonds by putting down no more than half the purchase price. |
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Term
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Definition
| money market instruments, the top line of a company's balance sheet |
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Term
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Definition
| same day settlement of a trade requiring prior broker dealer approval. not the "regular way" of doing things. |
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Term
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Definition
| the value of an insurance policy that may be "tapped" by the policyholder through a loan or a partial surrender |
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Term
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Definition
| a broker-dealer that carries its customers' cash and securities and/or provides this service to introducing broker dealers. |
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Term
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Definition
| an investment company that offers a fixed number of shares that are not redeemable. Shares are traded on the secondary market. |
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Term
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Definition
| NASD method of resolving money disputes in teh securities businss. all decisions are final and binding on all parties . |
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Term
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Definition
| Collaterized mortgage obligation. An incredibly esoteric debt security that few people understand. Based on a pool of mortgages or a pool of mortgage-backed securities. Pays interest monthly but returns principal to one tranche at a time. |
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Term
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Definition
| NASD system for enforcing member conduct rules |
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Term
| Collateral Trust Certificate |
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Definition
| a bond secured by a pledge of securities as collateral |
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Term
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Definition
| allows investors to combine purchases of many mutual funds within the family to reach a breakpoint/reduced sales charge. |
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Term
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Definition
| a short term corporate promissory note usually matuing in 270 days or less to claim an exemption to registration under the act of 1933. |
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Term
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Definition
| a violation in which the firm or agent mixes thir assets with those of their customers |
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Term
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Definition
| a fee charged for executing a securities transaction on behalf of an investor. |
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Term
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Definition
| the most "junior security," becuase it ranks last in line at liquidation. an equity or ownership position that usually allows the owner to vote on major corporate issues such as stock splits, mergers, acquisition, authorizing more shares etc |
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Term
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Definition
| a favorable tax treatment achieved if a company (REIT, mutual fund) distributes 90%+ or net income to the shareholders. |
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Term
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Definition
| a plan allowing the participant to gradually accumulate mutual fund shares by paying regular installments to a "play company". Not legal in all states due to complexity of rules and high sales loads. |
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Term
| conversion/Exchange Privilege |
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Definition
| a feature offered by many mutual funds whereby the investor may sell shares of one fund in the family and use the proceeds to buy another fund in the family at the NAV. (avioding sales load). All gains.losses are recognized on the date of sale/conversion for tax purposes. |
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Term
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Definition
| a preferred stock or corporate bond allowing the investor to use the par value to "buy" shares of the comany's common stock at a set price. |
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Term
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Definition
| the period after the registration statment for an issue of securities has been filed. lasting a minimum of 20 days and often longer depending on SEC deficiency letters. No sales or advertising allowed during this period, which lasts until the effective or release date. |
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Term
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Definition
| A.K.A. "nominal yield". The interest rate stated on a bond representing the percentage of the par value recieved by the investor each year. |
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Term
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Definition
| selling a callagainst the stock you already own. Eliminates the unlimited risk presented by naked call writing. |
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Term
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Definition
| consumer price index, a measure of inflation/rising prices for basic consumer ogods and services. Represents the greatest risk to most fixed-income investors. |
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Term
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Definition
| A.K.A. "default" or "financial" risk. The risk that the issuer will defauly on a debt security. |
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Term
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Definition
| preferred stock where missed dividends go into arrears and must be paid before the issuer may pay dividends to other preferred stock and/or common stock |
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Term
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Definition
| method of voting whereby the shareholder may take the total votes and split them up any way he chooses. Said to benefit minority over majority shareholders. Total botes are found by multiplying the number of shares owned by the number of seats up for election to the board or directors. |
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Term
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Definition
| annyual interest divided by market price of the bond. For example, an 8% bond purchased at $800 has a CY of 10%. $80/$800 =10% |
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Term
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Definition
| Committee on Uniform Securities identification procedures. A CUSIP number is assigned to a security for purposes of tracking. |
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Term
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Definition
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Term
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Definition
| maintains custody of a mutual fund's securities and cash. Performs payable/receivable functions for portfolio purchases and sales. In an UGMA, the custodian is the adult named on teh account who is responsible for the investment decisions and tax reporting. |
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Term
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Definition
| date when interest begins to accrue for a new issue of bonds |
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Term
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Definition
| the amount payable to the beneficiary of a life insurance (or annuity) contract, minus any outstanding loans and/or unpaid premiums |
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Term
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Definition
| fancy name for an unsecured couporate bond. backed by the issuer's ability (or inability) to pay. No collateral |
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Term
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Definition
| Maximum amount of general obligation debt that an issuer can have outstanding at any one time |
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Term
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Definition
| a security representing a loan from an investor to an issuer. Offers a particular interest rate in return for the loan, not an ownership position |
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Term
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Definition
| the schedule of interest and principal payments that mist be made to retire a loan by the maturity date |
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Term
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Definition
| the date the board declares a dividend |
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Term
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Definition
| an industry that cna easily survive an economic downtury as its products and services rend to be purchased regardless of economic climate. Includes food, basic clothin g, healthcare, pharmaceuticals, alcohol. tobaco and other essentials. |
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Term
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Definition
| an annuty that will begin to pay out in the future, as opposed to an immediate annuity that begins to pay out. believe it or not, immediately |
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Term
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Definition
| a non-qualified business plan that defers some of the employee's compensation until retirement |
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Term
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Definition
| a qualified corporate pension plan that, literally, defines the benefit payable to the retiree |
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Term
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Definition
| a qualified corporate plan that defines the contribution made on behalf of the employee, e.g. profit sharing, 401k |
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Term
| department of enforcement |
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Definition
| NASD enforcers of the member conduct rules, a group you never want to hear from, especially by certified mail. |
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Term
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Definition
| an accounting/tax deduction taken by a partnership when antural resources (gold, oil) are sold. |
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Term
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Definition
| an accounting/tax deduction taken to reflect the gradual loss of value on a capital asset such as a printing press |
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Term
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Definition
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Term
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Definition
| In economic terms, a depression is 6 quarters of economic decline |
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Term
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Definition
any bond traded below the par value E.g. @ 97 |
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Term
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Definition
| interest rate charged by FRB to member banks who borrow from the FRB |
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Term
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Definition
| when a registered rep chooses any of the three A's - activity, asset, amount |
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Term
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Definition
| the flow of money away from lower-yielding bank deposits to higher-yielding debt securities. Usually occurs when the fed is tightening the money syupply and raising interest rates |
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Term
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Definition
| The cost of distributing/marketing a fund, including selling, printing prospectuses and sales literature, advertising and mailing prospectuses to new/potential clients. Covered by sales charges/12b-1 fees. |
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Term
| Distributor/Underwriter/Sponser |
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Definition
| an NASD member firm tha bears distribution costos of a fund upfront, profiting from the sales charges paid by the investors. |
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Term
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Definition
| a portfolio in which many different companies, industries are represented. The "don't put all of your eggs in one basket" method of investing. IFghts non-systematic risk. A "diversified" mutual fund must follow the 75-5-10 rule. |
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Term
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Definition
| money paid to holders of common and preferred stock whenever the board is feeling especially generous. |
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Term
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Definition
| annual dividends divided by the earnings per share. A measure of how liberally a corporation pays out its profits to the shareholders |
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Term
|
Definition
| annual dividends divided by market price of the stock. Equivalent to current yield for a debt security. |
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Term
| dividend/Income distributions |
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Definition
| distributions from a fund to the investors made from net investment income. Typically, may be reinvested at the NAV to aviod sales charge. |
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Term
|
Definition
| a little box on an order ticket that when checked indicates that a buy-limit or sell-stop order should not be reduced when a cash dividend is paid on the stock |
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Term
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Definition
| investing fixed dollar amounts regularly, regardless of share price. Usually results in a lower average cost compared to average of share prices, as investors' dollars buy majority of shares at lower prices |
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Term
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Definition
| A broker dealer's response to a request for a confirmation of a trade they, literally, don't know anything about. The firm abbrevbiates their confusion with the letters "DK" |
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Term
|
Definition
| meeting between issuer and underwriters with the purpose of verifying all information contained in a registration statement/prospectus |
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Term
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Definition
| the earnings of the company divided by the shares of common stock. This measures the amount of profits that are tied to each share of common stock. |
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Term
|
Definition
| A bond underwriting in which each firm is responsible for a percentage of any unsold bonds the group has at the end, regardless of the firms's production. OFten called an "undivided account" |
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Term
|
Definition
| date established by SEC as to when the underwriters may sell new securities to investors. a.k.a. "release date" |
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Term
|
Definition
| the theory stating that markets immediately and efficiently process all information into an accurate market price and therefore actively selecting stocks is pointless |
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Term
|
Definition
| a section of ERISA that outlines whi is/is not eligible to participate in a qualified plan. 1000 hours worked over one year, 21 years old, etc. |
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Term
| Equipment Trust Certificate |
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Definition
| a corporate bond secured by a pledge of equipment, e.g. airplanes, railroad cars. |
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Term
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Definition
| the Employee retirement income security act, governs pension plans in the private secrot. a true qualified plan must conform to all the many requirements of ERISA, for example 401(k), defined benefit pension plans, and Keoghs have strict funding, participation, and vesting requirements |
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Term
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Definition
| a feature offered by a mutual fund family allowing investors to sell shares of one fund and buy shares of another fund in the family without a sales charge |
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Term
|
Definition
| auction markets where people scream and do trades. |
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Term
|
Definition
| two days before the record date for OTC and exchange listed securities. The date upon which the buyer is not entitled to the upcoming dividend. Note that for mutual funds, this date is established by the board of directors, usually the day after the record date |
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Term
|
Definition
| the party in charge of a deceased individual's estate |
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Term
|
Definition
| a security not required to be registered, i.e., a US treasurey Bond |
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Term
|
Definition
| to use an option to buy or sell something at a stated price. An option can be traded, or it can be exercised at the strike price of the contract. |
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Term
|
Definition
| a mutual fund's operating expenses compared to/divided by its average net assets. Shows how efficiently a fund conpany invests your money versus how much they spend on management fees, board of director salaries, 12b-1 fees, etc. |
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Term
|
Definition
| a debt security bought at a lower price than the face-amount. An investment company. |
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Term
|
Definition
| what you aren't getting from your securities investments. Bank deposits are insured up to $100,000 per account in case the bank fails. Securities investments are not insured by the FDIC, as any mutual fund prospectus will shout out in bold letters. |
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Term
|
Definition
| Interest rate charged on bank-to-bank loans. Subject to daily fluctuation |
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Term
|
Definition
| a.k.a. "freddie mac." Like big sister Fannie Mae, a quasi-agency, public company that purchases mortages from lenders and sells mortgage-backed securities to investors. Stock is listed on NYSE |
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Term
|
Definition
| insurance that protects investors from employees and broker-dealer firmst that might accidntally steal their securities or, you konw, lose them |
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Term
|
Definition
| someone responsible for the financial affairs of someone else, e.g. custodian, trustee, or registered rep in a discretionary account. |
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Term
|
Definition
| an order that must be filled in its entirety and immediately when the price conforms. If not, kill it |
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Term
|
Definition
| an underwriting in which the underwriters agree to purchase all securities from an issuer even the ones they failed to sell to investors. Involves acting in a "principal" capacity, unlike in "best efforts," "all or none," and "mini max" offereings |
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Term
|
Definition
Congress and President. Tax and Spend |
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Term
|
Definition
| a premium that is flexible. Characteristic of "universal" insurance. |
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Term
|
Definition
| a statement for a revenue bond showing how revenues will be allocated and how the debt service will be prioritized, being paid either out of gross or net revenue |
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Term
|
Definition
| a.k.a "Fannie Mae." Like little brother freddie mac, fannie buys mortgages from lenders and sells mortgage-backed securities to investors. A quasi-agency, a public company listed for trading on teh NYSE |
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Term
|
Definition
| the FRB's Federal Open Market Comittee. Sets short-term interest rates by setting discount rate, reserve requirement and buying/selling T-bills to/from primary dealers |
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Term
|
Definition
| means that mutual fund shares are bought and sold at the next computed price, not yesterday's stale prices |
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Term
|
Definition
| an ECN (electronic communications network) used buy institutional investors, bupassing the services of a traditional broker. Institutionals = INSTINET |
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Term
|
Definition
period during which a crontract or policyholder may cancel and recieve all sales charges paid. Not a popular phrase among seasoned insurance agents. |
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Term
|
Definition
| a mutual fund class A-share that charges a sales load on the front-end, when the shares are purchased. As opposed to a back-end load or B Share that charges a load when the shares are sold/redeemed |
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Term
|
Definition
| an account that is in the naughty chair for 90 days becuase the owner failed to make payment within the time frame established by Reg T. While the account is frozen, the customer has to have cash in the account to cover any purchase order. |
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Term
|
Definition
| Bonds that are fully registered. A physical certificate with the owners name, and interest payable automatically by the paying agent (no coupons) |
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Term
|
Definition
| Studying a corporation's sales, profits and other financial measures in order to determine a good investment from a poor one. |
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Term
|
Definition
| items that can be easily exchanged since one is just as good as any other. For example, $20 bills are fungible - if 100 people each put a $20 bill into a box, shook up the box, and then pulled out one bill each, no one would lose anything. Puts and calls are fungible, which is why a call that is exercised can be assigned to any member firm, who can in turn assign it to any customer who wrote that series of options. A MSFT Jun 50 call is a MSFT Jun 50 call just like 100 shares of MSFT is 100 shares of MSFT |
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Term
|
Definition
| a sharing arrangement for a DPP in which the GP takes the tangible costs and the IDC's (intangible drilling costs) such as labor and geological surveys go to the LP's |
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Term
|
Definition
| Gross Deomestic Product, the sum total of all goods and services being produced by the economy. A positive GDP number is evidence of economic expansion. |
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Term
|
Definition
| where an insurance company invests net premiums in order to fund guaranteed, fixed payouts |
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Term
| General Obligation bond (GO) |
|
Definition
| a municipal bond backed by the issuer's full taxing authority. A school bond, for example. |
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Term
|
Definition
| the party that manages a limited partnership and is liable for the debts of the company. |
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Term
|
Definition
| An advertisement that promotes a firm or a family of mutual funds without recommending any specific securities |
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Term
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Definition
| a.k.a. "ginnie mae", nickname for government national morgage associatio. a government agency (not a public company) that buys insured VA and FHA mortgages from lenders, selling pass-through certificates to investors. Monthly payments to investors pay interest and also pass through principal from a pool of mortgages. Recall that bonds pay interest and return principal only at maturity, while "pass throughs" pass through principal monthly. |
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Term
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Definition
| a limit or stop order that remains open until it is either executed or canceled |
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Term
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Definition
| investment objective that seeks "capital appreciation". Achieved through common stock. Requirement for people saving up for retirement. Growth funds buy stocks in companies whose earnings are expected to grow faster than other companies;. Dividends are of secondary or even no importance to this investor. |
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Term
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Definition
| a mutual fund that purchases stocks offereing both growth and income. A company such as GE, for example, pays consistend dividends but might also offer some growth over the long-term |
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Term
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Definition
| to pledge a security as collateral for a loan (margin accounts) |
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Term
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Definition
| a price pattern that signals the reversal of a trend to a technical analyst |
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Term
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Definition
| an offsetting position designed to reduce the risk taken by another position. For example, after buying stock, the investor can hedge by purchasing a put on or selling a covered call against that stock. |
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Term
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Definition
| the period during which an investor held a security. The holding period determines whether a capital gain/loss is long-term or short-term |
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Term
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Definition
| to pledge a security as collateral for a loan (margin accounts) |
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Term
| Immediate or Cancel (IOC): |
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Definition
| A limit or stop order in which the investor will accept whatever part of the order becomes immediately available at the specified price, with any remainder canceled. For example, a buy-limit for 1000 shares of MSFT @25 marked "immediate or cancel" would allow the floor broker to purchase just 600 shares if they became available at $25 or lower, canceling the remaining 400 shares if the were not immediately available. On the other hand, a "fill or kill" order for 1000 shares would have been killed if the price had dropped to $25 or lower with only 600 shares available. |
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Term
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Definition
| An annuity that begins to pay out immediately |
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Term
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Definition
a bond that only pays interest if the issuer has enough income to do so |
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Term
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Definition
| an investors expression of interest in buying a new issue of securities. Not a binding agreement |
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Term
| Industrial Development Bond (IDR/IDB) |
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Definition
| a municipal bond issued to build a facility that will be leased to a corporation |
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Term
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Definition
| the highest bid and lowest offer price for a security |
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Term
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Definition
| a violation in which another party is placed between a customer and the best market for a security |
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Term
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Definition
| the amount that an option is in-the-money. A msft nov 50 call has $3 OF INTRINSIC VALUE IF msft TRADES AT $53,for example |
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Term
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Definition
| when one goes up, the other goes down, and vice versa. Interest rates and yields are inversely related to bond prices |
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Term
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Definition
| a situation in which short term interest rates are higher than intermediate- or longterm interest rates |
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Term
| Investment company act of 1940 |
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Definition
| Classified investment companies and set rules for registration and operation |
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Term
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Definition
a bond backed up by a shaky issuer. Often called a "high-yeild" or "high-income" bond. |
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Term
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Definition
| qualified retirement plan available to sole proprietorships (self-employed) |
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Term
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Definition
| a belief that fiscal policy is the best way to manage the economy, that the government can increase "aggregate demand" for goods and services by implementing the proper taxing and spending policies. |
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Term
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Definition
| a stock where the total value of the outstanding shares is large, generally greater than $10 billion. For example, GE, MSFT, IBM |
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Term
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Definition
| Long-term options contracts that allow people to speculate on prices that are up to 39 months into the future. As opposed to an ordinary option, which expires in 9 months maximum and is usually only traded a few months in advance. |
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Term
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Definition
| the risk that legislation will be passed that has a negative impact on a securities investment. For example, if automobile manufacturers were suddenly required to produce vehicles that get 90 mpg by the end of 2008, stock in Ford and GM might take a slight hit that day. |
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Term
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Definition
| a feature of many mutual funds whereby an investor may submit a letter or form expressing the intent to invest enough money to achieve a breakpoint. |
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Term
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Definition
| a class of mutual fund share that charges a high 12b-1 fee. C-shares are often called "level load" due to the 1% 12b-1 fee |
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Term
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Definition
| the use of borrowed money, i.e., raising capital by issuing bonds. |
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Term
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Definition
| minuses to the account of an individual or business, e.g. credit card debt, bonds, accounts payable |
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Term
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Definition
| a payout option wherby the insurance/annuity company promises to make payments only for the rest of the annuitant's life. |
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Term
| Life with Joint and last survivor |
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Definition
| a payuout option whereby the insurance/annuity company promises to make payments to the annuitant for the rest of his life, then to the survivor for the rest of her life. |
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Term
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Definition
| a payout option wherby the insurance/annuity company promises to make payments to the annuitant for the rest of his life or a certain period of time, whiever is greater |
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Term
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Definition
| a payout option wherby the insurance/annuity company promises to make at least a certain number of payments to the annuitant |
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Term
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Definition
| a buy or sell order in which the price for execution is stipulated |
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Term
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Definition
| the ease with which a security can be sold for a decent price |
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Term
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Definition
| the risk that when you want to sell, nobody cares |
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Term
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Definition
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Term
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Definition
selling a security held for more than 12 months for less than you bought it. Long term losses are used to offset any long term gains |
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Term
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Definition
| a settlement/payout option for annuities or insurance where the annuitant or beneficiary receives a lump sum payment. |
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Term
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Definition
| a friendly phone call from your broker to inform you that while everything in your margin account is doing just fine, you will need to deposit more money just the same. For long positions, when the equity drops below 25% of market value a maintenance call will occur. For short accounts, as soon as equity drops below 20% a maintenance call will occur. |
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Term
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Definition
| a pledge that the issuer will keep the facility financed by a revenue bond properly maintained so that people will actually pay to use the thing in order to generate the revenues needed to pay the bondholders. |
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Term
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Definition
| an amendment to the securities exchange act of 1934 giving the NASD the authority to act as the SRO for the OTC. |
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Term
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Definition
| the profit a dealer receives by purchasing a security for less than the seller would probably like |
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Term
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Definition
| calculating the current value of securities positions to determine if a customer has excess equity or if perhaps a maintenance call is required. |
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Term
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Definition
| the profit a dealer makes by selling a security for more than the buyer would probably like |
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Term
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Definition
| a dealer in teh OTC market maintaining an inventory of a particular security and a bid and ask price good for a minimum of 100 shares |
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Term
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Definition
| a clause giving the underwriters the ability to bail on a securities offereing if there is a material problem with the issuer. |
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Term
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Definition
| any information likelyto affect an investment decision. For example, the sales and profits of a company are material when deciding to buy or sell their tock or bonds. The color that they paint their visitor lobby is immaterial. |
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Term
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Definition
| the date that a bond pays out the principal, a.k.a. "redemption" |
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Term
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Definition
| Municipal bond Investor Assurance Corporation, insures muni bonds against default |
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Term
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Definition
| A type of best efforts underwriting where the syndicate must sell a minimum amount and may sell up tto a higher, maximum amount |
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Term
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Definition
| a theory that looks at the portfolio as a whole in terms of risk/reward as opposed to considering each security within the portfolio on its own |
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Term
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Definition
| what the FRB implements through the discount rate, reserve requirement and FOMC open Market operations |
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Term
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Definition
| a highly liquid holding place for cash. Sometimes called "stable Value" funds, as the share price is generally maintained at $1 |
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Term
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Definition
| A revenue bond in which legislatures can vote to possibly raise enough money to make up for shortfalls in revenue |
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Term
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Definition
| a promise from an unsurance company to pay an annuitant no matter how long he lives, or to pay an insurance policyholder no matter how soon he dies. |
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Term
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Definition
| a corporate bond secured by a pledge of real estate as collateral |
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Term
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Definition
| a gigantic investment pie that sells slices to investors and uses the money paid for the shares to buy ingredients for the pie. |
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Term
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Definition
| an index focusing on just one market sector or some narrowly defined geographic region, perhaps. A pharmaceutical index would group stocks of pharmaceutical companies, and a telecommunications index would focus, believe it or not, on telecommunications companies |
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Term
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Definition
| National Association of Securities Dealers Automated Quotation system. The main component of the oTC market. Stocks that meet certain criteria are quoted throughout the day on NASDAQ |
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Term
| National Adjudicatory Council |
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Definition
| NAC, the first level of appeal for a party sanctioned by the department of Enforcement under the NASD's Code of Procedure |
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Term
| national Securities CLearing Corporation |
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Definition
| the clearing intermediary through which member firms reconcile all their buy and sell transactions |
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Term
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Definition
| the difference between assets and liabilities. add up the value of your house, bank accounts, IRA, etc. Subtract everything you owe - credit card debt, mortgage balance, student loand. The difference is your personal "net worth". |
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Term
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Definition
| what a mutual fund pays dividend distributions from. Dividends plus interest minus expenses = net investment income. 90%+ is often distributed to investors under the "conduit tax theory" |
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Term
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Definition
| A flow of funds statement revealing that debt service on the bonds will be paid out of net revenue, after operating expenses are met |
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Term
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Definition
| the calculation of an issuer's total cost of borrowing money through a bond issue. USed to determine the winning syndicate in a competitive bud underwriting of municipal securities |
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Term
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Definition
| a fund with no load. There is no sales charge to buy or sell shares of a no load fund but the fund may still charge a 12b-1 fee up to .25%. if the ocmpany calls itself "100% no-load," that means ther eis no sales charge and also no 12b-1 fee |
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Term
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Definition
| the interest rate that a bond pays to investors as stated right there on the bond certificate |
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Term
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Definition
| a fund that doesn't care to meet the 75-5-10 rule, preferring to concentrate more heavily in certain issues. |
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Term
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Definition
| an order in which the suctomre names everything except the price/time for execution |
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Term
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Definition
| an order for fewer than 100 shares of stock |
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Term
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Definition
| the theory that people who can only afford to buy under 100 shares of stock consistently buy to high and sell too low, so just do the opposite of what they do. |
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Term
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Definition
| a document given to investors when a prospectus is not required. For example, an offer of church bonds would not have a prospectus registered with teh SEC but would still come with a document detailing what is being offered and why an investor might want to buy it or maybe leave it the heck alone. Since this offering document is being curculated, they decided to call it an "offering circular." |
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Term
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Definition
| the document that an issuer publishes in order to attract underwriters interested in taking an issue of bonds to investors on the primary market |
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Term
|
Definition
| the offering or financial disclosure document that an investor recieves when purchasing an issuer's municipal securities. |
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Term
|
Definition
| A.k.a "mutual fund," an investment company that sells an unlimited number of shares to an unlimited number of investors on a continuous basis. Shares are redeemed by the company rather than traded OTC or on the exchanges |
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Term
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Definition
| a bond that allows the issuer to sell future bonds backed by the same collateral and having equal claims as the original bonds. |
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Term
| Options Clearing Corporation (OCC) |
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Definition
| the party that issues and guarantees performance of listed options contracts |
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Term
| Options Disclosure Document |
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Definition
| the prospectus given to people considering the trading of options. must be delivered at or before the time that the ROP approves teh account for trading. Explains how options work and how they often don't. |
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Term
Original issue Discount (OID) |
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Definition
| a bond issued originally at a discount. UNless it's a municipal OID, the amount that the par calue increases/accretes each year is taxable to the investor as if she had actually recieved the money |
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Term
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Definition
| Called a "negociated market". Includes NASDAQ and also Bulletin board and pink sheet stocks, plus govvernment, corporate and municipal bonds |
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Term
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Definition
| an option whose strike price would give no one an advantage since it isn't even close to the market price. If SFT trades at $33, a MSFT Aug 50 call would be way out of the money and so would a MSFT Aug 20 put |
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Term
|
Definition
| the number of shares a corporation has outstanding. Found by taking Issued shares minus Treasury stock |
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Term
| Overriding Royalty Interest |
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Definition
a type of sharing arrangement that gives somebody a share of revenue without having to share any risk. For example, if oil were found on your land, the oil drilling partnership might offer you an overriding royalty interest for the right to drill on your property. |
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Term
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Definition
| the face amount of a bond payable at maturity. Also, the face amount of a preferred stock. Preferred = $100, Bond =$1000 |
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Term
|
Definition
| when the underlying common stock trades for exactly the market value of the convertible preferred stock or convertible bond. For example, if the bond is convertible into 50 shares of stock and the stock trades for $24, the bond would trade at parity if its market price were exactly $1,200 |
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Term
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Definition
| a provision by which the issuer calls only part of a bond issue, usually by a lottery |
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Term
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Definition
| life insurance policyholder cashes in part of the cash value. Excess over premiums is taxable |
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Term
| Participating preferred stock |
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Definition
| preferred stock whose dividend is often raised above the stated rate |
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Term
|
Definition
| a mortgage backed security (usually GNMA) that takes a pool of mortgages and passes through interest and principal monthly to an investor |
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Term
|
Definition
| the date that the dividend check is paid to investors |
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Term
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Definition
| non-qualified retirement plan offered by some businesses |
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Term
|
Definition
| a contractual retirement plan in which the employer promises to pay a benefit to the employee in retirement |
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Term
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Definition
| total return for a mutual fund over 1,5, and 10 years or "life fund" for newly established funds. Only past performance may be indicated and there must be a caveat that past performance does not guarantee future results. |
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Term
| Periodic Deferred Annuity |
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Definition
| method of purchasing an annuity whereby the contract holder makes periodic payments into the contract. The pay-out phase must be deferred for all periodic payment plans |
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Term
|
Definition
| a virtually unregulated part of the OTC market where thinly traded volatile stocks change hands |
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Term
|
Definition
| the dollar amount of bonds sold out of the dollar amount of bonds offered on the primary market last week, published in the daily bond buyer |
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Term
|
Definition
| the rule that allows short sales to only be executed at a plus tick or the repeat of a plus tick (zero-plus tick). In other words, a short sale can not be executed at a price that is lower than the previous price reported to the tape. |
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Term
|
Definition
| public offering price. For an IPO, this includes the spread to the underwriters. For a mutual fund, this includes any sales loads that go to the underwriter/distributor |
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Term
|
Definition
| a document that when signed by the security owner authorizes transfer of the certificate to another party |
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Term
|
Definition
| the right of a common stockholder to maintain her percentage of ownership. if the corporation offers additional shares, she ahs the right to buy enough to maintain the same percentage she owns today |
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Term
|
Definition
| A fixed-income equity security whose stated dividends must be paid before common stock can receive any dividend payment. Also gets preference ahead of common stock in a liquidation (but behind all bonds and general creditors) |
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Term
|
Definition
| a prospectus that lacks the POP and the effective date. A.k.a. "red herring". Used to solicit indications of interest |
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Term
| Price-to Earnings Ratio (PE) |
|
Definition
| comparison of a stock's market price to the earnings associated with that share of stock. A stock with an Eps (earnings per share) of $2 would have a price-to-earnings (PE) ratio of 20 if it were trading for $40. IF the PE ratio were 30, the stock would trade for $60. |
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Term
|
Definition
| buying and selling two options where the only difference is in the strike prices. If an investor buys the XYZ Jun 50 Call and sells the XYZ june 60 Call, he has established a price spread |
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Term
|
Definition
| where securities are issued to raise capital for the issuer |
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Term
|
Definition
| interest rate charged to corporations with high credit rations for unsecured loans. |
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Term
|
Definition
| a transaction in which the firm takes the other side as opposed to merely arranging a transaction. Rather than Charging a "commission," a principal transaction involves a markup or markdown |
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Term
|
Definition
| a private offering of securities to a limited number of sophisticated investors that thereby escapes registration requirements |
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Term
| Private Securities Transaction |
|
Definition
| a transaction in which the firm takes the other side as opposed to merely arranging a transaction. Rather than charging a "commission," a principal transaction involves a markup or markdown |
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Term
|
Definition
| a private offering of securities to a limited number of sophisticated investors that thereby escapes registration requirements. |
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|
Term
| Private securities transaction |
|
Definition
| an offering of an investment opportunity not sponsored by the firm. requires premisison from the firm and any disclosure demanded; otherwise, a violation called "selling away" |
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Term
|
Definition
| a defined contribution plan wherby the companyshares any profits with employees in teh form of contribution to a retirement account. |
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Term
|
Definition
| a disclosure document that details a company's plans, history, officers, and risks of investment. Itsl the red herring plus the POP and the effective date |
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Term
|
Definition
| Method of voting for shareholders who will not be attending the annual shareholder meeting |
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Term
|
Definition
| giving the owner the right to sell something at a stated price. "to sell" |
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Term
|
Definition
| exactly what the issuer does not want from teh bond counsel, as this opinion expresses some doubts/uncertainties concerning the legality and tax status of the municopal bonds abou tto be issued |
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Term
|
Definition
| a retirement plan that qualifies for deductible contributions on behalf of employers and/or employees if it meets IRS approval, and is covered by ERISA. For example, 401(k), defined benefit, Keogh. |
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Term
|
Definition
| Current Assets minus Inventory divided by current liabilities. A more stringent measure of a corporation's solvency. |
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Term
|
Definition
| the prices at which a security can be purchased (offer) and sold (bid) as well as the number of shares available to buyers and sellers at those quoted prices. |
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Term
|
Definition
| a settlement option in an annuity wehrby the investor takes the value of the subaccounts in two or more withdrawls, rather than one lump sum |
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Term
|
Definition
| a promise by the issuer to raise rates if necessary to generate sufficient revenues to pay the devt service to the holders of revenue bonds |
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Term
| Real Estate Investment Trust (REIT) |
|
Definition
| a trust that owns real estate and sells units/shares to investors. Typically pays high dividend yields because they pass through at least 90% of net income to investors. Most REITs trade on the exchanges alongside MSFT, GE, ORCL, etc. |
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Term
| Real Estate Limited Partnership |
|
Definition
| as opposed to a reit, This investment is not traded among investors and does pass through a share of the losses to investors |
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Term
|
Definition
| in a limited partnership an apartment building may be sold for more than its depreciated cost basis. If so, that is recaptured by the IRS. |
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Term
|
Definition
| From two quarters (6 months) to six quarters (18 months) of economic decline |
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Term
|
Definition
| The Date determined by the board of directors upon which the investor must be the holder "of record" in order to receive the upcoming dividend. Settlement of a trade must occur by the reord date for the buyer to receive the dividend |
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Term
|
Definition
| a loan that gives the creditors the recourse to come after the limited partners for a certain amount of debt if the partnership can't pay them |
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Term
|
Definition
| a.k.a. "preliminary prospectus" Contains essentially the same information that the final prospectus will contain, minus the POP and effective date |
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Term
|
Definition
| a security that is sold back to the issuer rather than traded among investors. An open-end mutual fund is a redeemable security, while a closed-end fund is traded among investors. |
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Term
|
Definition
| for mutual funds, redemption involves the sale of mutual fund shares back to teh fund at the NAV (less any redemption fees, back-end loads_. For bonds, the date that principal is returned to the investor, along with the final interest payment |
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Term
|
Definition
| established by the FRB as the amount of credit a broker-dealer may extend to a customer pledging a security as collateral for a margin loan. Currently 50% of market value |
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Term
|
Definition
| established by the FRB as the amount of credit a bank may extend to a broker-dealer or public customer pledging a security as collateral |
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|
Term
| Registered as to Principal Only |
|
Definition
| a bond with only the principal registered. Interest coupons must be presented for payment. |
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Term
|
Definition
| audits the transfer agent to make sure number of authorized shares is never exceeded |
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Term
|
Definition
| the normal time frame for settling/clearing a transaction between the buy and the sell side. Regular way settlement is T + 3 for corporate stock, corporate bonds, and municipal bonds, T + 1 for listed options and treasury seciruties trading on the secondary marker. |
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Term
|
Definition
| the risk that a fixed-income investor will not be able to reinvest interest payments or the par value at attractive interest rates |
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Term
|
Definition
| date established by the SEC as to when the underwriters maysell new securities to the buyers, a.k.a. "effective date" |
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Term
|
Definition
| a short-term loan that is fully secured. One party sells securities today for, say, $1 million and agrees to repurchase them in 30 days for $1.05 million. The extra amount paid is the seller's interest for the loan. Part of the money market. |
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Term
|
Definition
| the percentage of customer deposits that banks have to lock up in reserve, established by the federal reserve board |
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Term
|
Definition
| the point at which a stock's price rises but then attracts enough sellers to knock the price back down a while |
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Term
|
Definition
| earnings that have been retained. Seriously. It's the profits that the company has made but simply refuses to pay out in the form of dividends. Rather, the earnings are retained by the company and reinvested into the business. |
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|
Term
| Revenue Anticipation Note (RAN) |
|
Definition
| a short-term loan to a municipality backed up with some revenues they ahve not actually collected yet. |
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Term
|
Definition
artificially raising the market price for a share of stock by creating fewer shares. A 1:10 revesrse split means that your 100 shares will become 10 shares. if you owned 100 shares at 1 you will have 10 worth 10. |
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Term
|
Definition
| short term equity securities that allow the holder to buy new shares below CMV. |
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Term
|
Definition
| Feature of many mutual funds whereby a rise in account value is counted the same as new money for purposes of achieving a breakpoint. |
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|
Term
| Riskless Simultaneous Transaction |
|
Definition
| a transaction in which the firm already has a customer order, then buys the security for inventory just long enough to sell it on a principal basis, at a markup, as opposed to executing the order as an agent for a commission |
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Term
|
Definition
| individual retirement account funded with non-deductible (after-tax) contributions. All distrubutions are tax-free provided the individual is 59.5 and has had the account at least 5 yrs. |
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Term
|
Definition
| amount of the POP that goes to the distributors. POP - NAV |
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Term
|
Definition
| Written materials distributed by a member firm to a controlled audience and designed to increase business. Research reports, market letters, flyers, circulars, and other written materials sent to a selected audience are considered "sales literature." Other examples of sales literature include computer slide shows and a form letter sent to 25 or more prospects in a 30 day period |
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|
Term
|
Definition
| life insurance with established, scheduled premium payments, i.e., whole life, variable life. As opposed to "universal" insurance, which is "flexible premium" |
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|
Term
|
Definition
| Where investors trade securities among themselves and proceeds do not go to the issuer |
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|
Term
|
Definition
| a transaction in which certain large shareholders recieve the proceeds of a stock sale. When companies perform their IPO, a certain percentage of the shares are usually being offered by the founders; whenever the proceeds go to someone other than the issuer, the word :secondary: is used. When the issuer receives the proceeds, the word "primary" is used. |
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|
Term
|
Definition
| a.k.a. "specialized" a fund that concentrates heavily in a particular industry or geographic area, E.g. "the Japan Fund" or the Technology Fund>" Higher risk/reward than funds invested in many industries. |
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|
Term
|
Definition
| a.k.a. "paper act", regulates the new issue or primary market, requiring non-exempt issuers to register securities and provide full disclosure. |
|
|
Term
| Securities Exchange Act of 1934 |
|
Definition
| a.k.a. people act - very broad scope covering short-sales, corporate reporting, anti fraud rules, insider trading ban , solicitation of proxies, gave FRB power to regulate margin, etc. |
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|
Term
| Securities and Exchange Commission |
|
Definition
| SEC, empowered by passage of Securities Exchange Act of 1934. A government gody, the ultimate securities regulator |
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|
Term
|
Definition
| An investment of money subject to fluctuation in value and negotiable/marketable to other investors |
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|
Term
| Self-regulatory organization, SRO |
|
Definition
example: NASD An organizsation given the power to regulate its members with passage of the maloney act |
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Term
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Definition
| A violation that occurs when a registered rep offers investment opportunities not sponsored by the firm |
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Term
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Definition
| typically, the largest piece of the underwriting spread going to the firm credited with making the sale. |
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Term
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Definition
| the deceptive practice of enticing an investor to purchase a stock or mutual fund primarily for the upcoming dividend. the investor will pay the full purchase price, then immediately receive part of it back and pay tax on teh difference. |
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Term
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Definition
| a group of selling broker-dealers willing to help a syndicate place a new issue of securities with some of their customers. The selling group has no liability and prifits by purchasing securities "at the concession" from the syndicate and selling them to investors at eh hight public offering price (POP) |
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Term
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Definition
| an account maintained by an insurance/annuity company that is separate from the company's general account. USed to unvest clients' money for variable annuities and variable insurance contracts. Registered as an investment company |
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Term
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Definition
| retirement plan available to small businesses, similar to Keogh. Favors high-earning employees |
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Term
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Definition
| final completion of a securities transaction, when the new owner is recognized officially by the transfer agent |
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Term
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Definition
| Payout options on annuities and life insurance |
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Term
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Definition
| method of attempting to profit from a security whose price is expected to fall. Trader borrows certificates through a broker-dealer and sells them, with the obligation to replace them at a later date, hopefully at a lower price. Bearish position |
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Term
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Definition
| retirement plan for small business with no more thatn 100 employees and no other retirement plan. Favors lower -earning employees (as compared to SEP IRA) |
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Term
| Single Payment Deferred Annuity |
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Definition
| annuity purchased with a single payment wherin the individual defers the payout or "annuity" phase of the contract |
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Term
| Single Payment Immediate Annuity |
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Definition
| annuity purchased with a single payment wherin the individual goes immediately into the payout or "annuity" phase of the contract |
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Term
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Definition
| an account that an issuer deposits money into for the sole purpose of returning the principal due on a bond issue |
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Term
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Definition
| Securities Investor Protection Corporation, a non-profit, non-government, industry-funded insurance corporation protecting investors against broker-dealer failure. |
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Term
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Definition
| a stock where the total value of all outstanding shares is considered "small," typically between $50million and $2billion. |
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Term
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Definition
| a revenue bond backed by special taxes on items such as alcohol, tobacco, hotel & motel, and gasoline. |
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Term
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Definition
| a member of the NSE charged with "maintaining a fair and orderly market" in a particular security. Trades for own account, not an exchange employee |
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Term
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Definition
| generally, the difference between a dealer's purchase price and selling price, bot for new offerings (underwriting spread) and secondary market quotes. For underwritings the spread is the difference between the proceeds to the issuer and the POP |
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Term
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Definition
perhaps the only time marker mainpulation is allowed - the syndicate may place bids for the stock on teh secondary market designed to prop up the price immediately aftrer a primary offering/IPO. The bid can be no higher than the pop. but placing big orders to buy the stock at or near the POP can have a stabilizing effect on the market price for that stock |
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Term
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Definition
| a firm commitment for a rights offering in which an underwriter "stands by" willing to subscribe to any of the shares that existing shareholders don't want. |
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Term
| Statutory Disqualificaiton |
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Definition
| registration rule by an SRo, the SEC, or a state regulator preventing persons with regulatory or criminal pasts from being accepted for registration in the securities business. Typically any felony, securities-related misdemeanor, or regulatory action over the past 10 years will disqualify an applicant for registration |
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Term
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Definition
| method of voting wherby the shareholder may cast no more than the nubmer of shares owned per candidate/item |
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Term
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Definition
| a frustrating condition in which a suctomer's limit order could be filled based on the market price but isn't yet because there are other orders ahead getting filled at the moment |
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Term
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Definition
| an order to buy or sell a security that is activated when the security hits or passe through the stop price, then becomes a market order |
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Term
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Definition
| a stop order that once activated becomes a limit order executed at the customer's limit price or better |
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Term
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Definition
| a courtesy in which the specialist guarantees a price but seeks a better price for execution of a public order |
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Term
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Definition
| buying a call and a put with the same strike price and expiration month or selling a call and a put with the same strike price and expiration month |
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Term
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Definition
| a preferred stock whose missed dividends do not go into arrears, a.k.a. "non-cumulative preferred." |
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Term
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Definition
| separate trading of registered interest and principal of securities. A zero coupon bond issued bu the us treasury |
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Term
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Definition
| investment options available within the separate account for variable contract holders |
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Term
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Definition
| corporate bond with a claim that is subordinated or "junior" to a debentyure and/or general creditor |
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Term
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Definition
| to cash out an annuity of life insurance policy for its surrender value |
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Term
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Definition
| a group of underwriters bringing an issuer of securities to the primary market |
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Term
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Definition
| the risk that the overall market can decline at any point. to offset, investors buy puts on broad-based indices or sell ETF's short |
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Term
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Definition
| regular way settlement, trade date plyuss three business days |
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Term
| TAN (Tax anticipation note) |
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Definition
| a short term loan to a municipality backed up bu some taxes they havn't actually collected yet |
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Term
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Definition
| an account where all earnings remain untaxed until "constructive receipt." |
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Term
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Definition
| what a taxable bond would hav eto pay in order to be equivalent to the municipal (tax-free) bond that an investor is considering. For example, if an investor in the 30% bracket is eying a tax free muni that yeilds 10%. To calculate, take the tax-free yeild of 7% and divide by 70% (100% minus tax bracket) |
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Term
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Definition
| An item receiving favorable tax treatment that has to be added to income for purposes of AMT. Accelerated depreciation, for example, or interest paid by private purpose munivipal bonds |
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Term
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Definition
| direct obligation of US government. Sold at discount, mature at face amount. Maximum maturity is 1 year |
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Term
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Definition
| direct obligation of us government. pay semi-annual interest. quoted as % of par value plus 32nds. 10-30 year maturities |
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Term
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Definition
| a bond issue in which all the principal is paid on teh same date |
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Term
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Definition
| Studying Past price patterns in order to predict furure price patterns |
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Term
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Definition
| When an issuer offers to buy their securities from investors either for cash or other securities |
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Term
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Definition
| form of temporary insurance that builds no cash value and must be renewed at a higher premuim at the end of the term. |
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Term
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Definition
| NYSE-listed stock traded over the counter |
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Term
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Definition
| account managed on behalf o fa third party, e.g. trust or UGMA |
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Term
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Definition
| a calculation of the total cost of borrowing through a bond issue including the time value of money. Either TIC or NIC is used to determine the winning bid for a competitivbe underwriting of municipal bonds. |
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Term
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Definition
| the amount of the option's premium that exceeds the intrinsic value. For example, with MSFT trading at $46, a MSFT oct 45 call @2 has $1 of "time value" |
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Term
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Definition
| Direct obligation of U.S. Government. 2-10 year maturities. Pay semi-annual interest. Quoted as % of par value plus 32nds |
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Term
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Definition
| a bland announcement allowed during the cooling off period listing the issuer, the type of security, the underwriters, and directions for obtaining a prospectus |
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Term
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Definition
| Measuring growth in share price plus any income distributions. For example, a stock purchased at $10 that rises to $12 and pays a $1 dividend gives the investor a total return of 30% |
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Term
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Definition
| the written notification of a completed securities transaction, sent no later than settlement of the trade |
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Term
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Definition
a form granting another individual the anthority to trade on behalf of the account owner. Either "limited" (buy/sell orders only) or "full" (buy/sell orders plus requests for checks/securities) authorization may be granted. Sometimes referred to as "power of attorney" |
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Term
TRAN (Tas & Revenue Anticipation Note) |
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Definition
| a short term loan to a municipality backed by some taxes and some revenues they haven't actually collected yet. |
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Term
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Definition
| issues and redeems certificates. Handles name changes, validates mutilated certificates. Distributes dividends, gains, and shareholder reports to mutual fund investors. |
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Term
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Definition
| Zero coupon bonds created by broker-delaers backed by treasury securities held in escrow. not a direct obligation of US government |
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Term
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Definition
| Securities guaranteed by US treasury including T bills, T notes, T bonds, and STRIPS |
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Term
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Definition
| Shares that have been issued and repurchased bu the corporation. NOthing to do with US treasury |
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Term
| Trust Indenture Act of 1939 |
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Definition
| corporate bond issues in excess of $5 million with maturities greater than 1 year must be issued with an indenture |
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Term
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Definition
| Tax - sheltered annuity. a qualified retirement plan for no n-profit organizations such as schools, hospitals, and religous institutions funded with pre-tax dollars |
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Term
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Definition
| an independent exchange member who executes orders for commission house brokers and the public for a fee |
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Term
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Definition
| Uniform Gifts to Minors Act. An account set up for the benefit of a minor, managed by a custodian |
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Term
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Definition
| Unit investment Trust. A type of investment company where investments are selected, not traded /managed. The ETF's such as "spiders" are created as Unit Investment Trusts that passively hold the underlying index securities |
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Term
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Definition
| the security that an options contract is based on. Microsoft common stock is the underlying security of a MSFT May 50 call |
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Term
| unqualified LEgal Opinion |
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Definition
| exacytly what the issuer wants from the bond counsel, this opinion is issued without any qualifications or reservations |
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Term
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Definition
| a broker dealer that distributes shares on teh primary market |
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Term
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Definition
| The profit to the syndicate. The difference between the proceeds to the issuer and the POP |
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Term
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Definition
| how the NASD promotes "cooperative effort," standardizing settlement dates, ex-dates, accrued interest calculation, etc |
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Term
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Definition
| a form of permanent insurance that offers flexibility in death benefit and both the amount of, and method of paying, premiums. |
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Term
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Definition
| just like UGMA, only the kid has to wait as late as 25 years of age to have the assets re-registered solely in his/her name. The T stands for Transfer |
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Term
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Definition
| A tax-deferred investment without maximum contributions in which the individual invests in the separate account and subaccounts of his own choosing. The individual bears investment risk in exchange for the opportunity to protect purchasing power. |
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Term
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Definition
| form of insurance where death benefit and cash calue fluctuate according to fluctuations of the separate account |
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Term
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Definition
| a multiple option in which an investor purchases one option and sells another where the only difference between the contracts is the strike price. For example, a MSFT june 60 put and a MSFT jun 65 put would make a vertical spread, also called a "price spread" to make sure it has at least two names. |
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Term
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Definition
| a schedule for determining at what point the employer's contributions become the property of the employee in a qualified retirement plan |
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Term
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Definition
| a figure published in the daily bond buyer showing the total par value of municipal bonds to be issued over the next thirty days. |
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Term
| voluntary accumulation plan |
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Definition
| a plan in which the investor elects to have a certain amount of money deducted regularly and automatically invested into a mutual fund. |
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Term
| Voluntary Accumulation Plan |
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Definition
| a plan in which the investor elects to have a certain amount of money deducted regularly and automatically invested into a mutual fund |
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Term
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Definition
| long term equity securities giving the owner the right to purchase stock at a set price. Often attached as a "sweetener" that makes the other security more attracitve |
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Term
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Definition
| after selling a security for a loss, repurchasing that security within 30 days. .This disallows the loss for the current tax year, but the investor adds the amount of the loss to his cost basis on the new purchase, in order to keep tax reporting nice and simple |
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Term
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Definition
| a sundicate account in which each member is responsible for their allotment of bonds only. Also called a "dividend account" |
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Term
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Definition
| a security that has been sold prior to the creation/availability of the certificates. |
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Term
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Definition
| form of permanent insurance with a guaranteed death venefit and minimum guaranteed cash value |
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Term
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Definition
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Term
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Definition
| also called the "order room," this is the department that wires transactions to the appropriate exchange |
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Term
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Definition
| a sustematic method of withdrawing money from a mutual fund in which the fund liquidates a certain number of shares, or sells enough shares to raise a certain amount of money on, a monthly or quarterly basis |
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Term
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Definition
| Prices at which a municipal securities dealer may be willing to trade, not a firm quote |
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Term
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Definition
| a measure of a corporation's liquidity in which current liabilities are subtracted from current assets to produce a positive number. |
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Term
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Definition
| The income that a security provides to the owner. As opposed to the capital appreciation a security could provide by rising in market value |
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Term
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Definition
| calculation of all interest payments plus/minus gain/loss on a bond if held to maturity |
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Term
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Definition
calculation of all interest payments plus/minus gain/loss on a bond if celled before maturity |
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Term
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Definition
| a debt security that does not pay current interest but, rather, returns a hight par value at maturity |
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Term
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Definition
| the repeat of a minus tick that would not allow a short sale to be executed |
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Term
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Definition
| The repeat of a plus tick that would allow a short sale to be executed |
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