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Family and Friends... I will soon be adding all the
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Exchange Suffixes To get a quote from a company traded on any of the below financial markets, enter the symbol and the suffix. For example, if you are looking for a quote for Vodafone on the London Exchange, enter "VOD.L" in the quote box. You do not need to use an exchange suffix for securities traded on the major U.S. exchanges (NYSE, Nasdaq, and AMEX). However, quotes for OTC stocks and pink sheet stocks require the .OB and .PK suffix respectively.
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A thru Z Definitions
Advance/Decline Line A measure of the overall market strength derived by subtracting the total number of declining issues from the total number of advancing issues. All or None Order A trading order that requires that none of an order be executed unless all of it can be executed at the specified price. Arbitrage A technique used by alert traders, now aided by sophisticated computer programs, to profit from minute price differences for the same security on different markets. For example, if a computer monitoring markets notices that ABC stock can be bought on a New York exchange for $10 a share and sold on a London exchange at $10.12, the arbitrageur or a special program can simultaneously purchase ABC stock in New York while selling the same amount in London, thus pocketing the difference. Ask Price If an investor owns a security and is interested in selling, they "ask" for a certain amount of money to part with the security. The ask price is therefore the lowest price an investor is willing accept to sell a security. This is also called the offer price. At-the-Money An option is at-the-money if the strike price of the option is identical to the market price of the underlying security. For example, if ABC stock is trading at 54, then the ABC 54 option is at-the-money. Basis Point In the bond market, the smallest measure used for quoting yields is a basis point. Each percentage point of yield in bonds equals 100 basis points. Basis points also are used for interest rates. An interest rate of 5% is 60 basis points greater than an interest rate of 4.4%. Bear An investor who believes a stock or the overall market will decline. A bear market is a prolonged period of falling stock prices, usually by 20% or more. Beige Book The Beige Book is produced by the Reserve Banks and details evidence gleaned either from surveys or from talks with key business and financial institutions on the state of the economy in each of the Federal Reserve districts. This document summarizes comments received from businesses and other contacts outside the Federal Reserve and is not a commentary on the views of Federal Reserve officials. Beta A coefficient measuring a security's relative volatility. The beta is the covariance of a stock in relation to the rest of the stock market. For example, the Standard & Poors' (S&P) 500 Stock Index has a coefficient of 1. Any stock with a Beta greater than 1 is more likely to rise and fall with more volatility than the general market, and a Beta of less than 1 is more likely to rise and fall with less volatility than the general market. Bid Price If an investor is interested in purchasing a security, they "bid" to buy the security. Therefore, the bid price is the highest price an investor is willing to pay for the given security. Block Trade A large holding or transaction of stock. Generally 10,000 or more shares or any quantity worth over $200,000 is considered a block. Bond A bond is a debt instrument issued for a period of time with the purpose of raising capital by borrowing from purchasers. When you purchase a bond, you are essentially lending the issuing party your money. The bond you purchased then represents a promise by the issuing party to repay the amount of the bond (principal) by a certain date (maturity). Some bonds are interest bearing and pay the interest periodically. They are usually issued in multiples of $1,000 or $5,000, although $100 and $500 denominations are available. Book-to-Bill Ratio The SEMI book-to-bill is a ratio of three-month moving average bookings to three-month moving average shipments for the North American semiconductor equipment industry. A book-to-bill of 0.42 means that $42 worth of new orders were received for every $100 of product shipped for the month. A ratio above one is a good sign for semi stocks. Additionally, a ratio above the prior month's reading indicates a pick up in Semi demand. Book Value A company's book value is its total assets minus intangible assets and liabilities, such as debt. A company's book value might be more or less than its market value. Bottom Line Net income or earnings per share found at the bottom of the quarterly or annual income statement. Breakout A rise in a security's price above a resistance level (commonly its previous high price) or drop below a level of support (commonly the former lowest price.) A breakout is taken to signify continuing move in the same direction. Can be used by technical analysts as a buy or sell indicator. Bull One who believes the market will rise. Call Option Contract A call is an option contract that gives the holder the right to buy a certain quantity of shares of a specified security at a specified price within a specific time period. You can either buy the call option, giving you the right to "call" away the stock from the seller, or you can sell the call option, giving someone the right to "call" away the stock from you. If you write, or sell, a call without owning the equivalent amount of the underlying stock, that is called an uncovered call. If you write the call and you do own the equivalent amount, then it is called a covered call. Capital Gain Profit earned on the sale of securities, either through dividends or by selling the securities at a higher price than they originally cost. CBOE Chicago
Board Options Exchange Commission A brokers basic fee for purchasing or selling securities as an agent. Congestion A term technical analysts use to describe a stock trading sideways, between a defined trading range. Covered Call A strategy in which one sells call options while simultaneously owning an equivalent position in the underlying security or strategy in which one sells put options and simultaneously is short an equivalent position in the underlying security. Day Order An order to buy or sell which, if not executed, expires at the end of the trading day on which it was entered. Day Trading Refers to establishing and liquidating the same position or positions within one day's trading. Delayed Opening The postponement of the trading of an issue on a stock exchange because of unusual market conditions. Reasons for the delay might be an influx of either buy or sell orders, an imbalance of buyers and sellers, or pending corporate news that requires time for dissemination. Discount Rate The interest rate that the Federal Reserve charges a bank to borrow funds when a bank is temporarily short of funds. Dividend The payment designated by the Board of Directors to be distributed pro rata among the shares out-standing. For preferred shares, the dividend is usually a fixed amount. For common shares, the dividend varies with the fortunes of the company and the amount of cash on hand, and may be omitted if business is poor or if the directors determine to withhold earnings to invest in plants and equipment. Sometimes a company will pay a dividend out of past earnings even if it is not currently operating at a profit. Dollar Cost Averaging A system of buying securities at regular intervals with a fixed dollar amount. Under this system investors buy by the dollars worth rather than by the number of shares. If each investment is of the same number of dollars, payments buy more shares when the price is low and fewer when it rises. Temporary downswings in price benefit investors if they continue periodic purchases in both good times and bad and the price at which the shares are sold is more than their average cost. Durable Goods Orders Economists use the Durable Goods data to forecast increases and decreases in manufacturing production. Durable goods are products expected to last more than three years. EBITDA (Earnings before interest, taxes, depreciation, and amortization) A financial
measure defined as revenues less cost of goods sold and selling, general,
and administrative expenses. In other words, operating and nonoperating
profit before the deduction of interest and income taxes. Depreciation and
amortization expenses are not included in the costs. Earnings Per Share Ex-dividend Date The first day of trading when the seller, rather than the buyer, of a stock will be entitled to the most recently announced dividend payment. This date set by the NYSE (and generally followed on other US exchanges) is currently two business days before the record date. A stock that has gone ex-dividend is marked with an x in newspaper listings on that date. Face Value The value of a bond that appears on the face of the bond, unless the value is otherwise specified by the issuing company. Face value is ordinarily the amount the issuing company promises to pay at maturity. Face value is not an indication of market value. Sometimes referred to as par value. Federal Open Market Committee The Federal Open Market Committee, or FOMC, is the Fed's monetary policy committee. It meets eight times a year in Washington (the schedule is on the Fed's Web site) to set the fed funds rate. Announcements of changes in monetary policy are at 2:15 p.m. Eastern Time (on the second day if it's a two-day meeting), and the minutes of the meetings are released within a few days of having been approved by the committee at its subsequent meeting. Fed Funds Futures The prices of fed funds futures contracts imply expectations for the fed funds rate. The Chicago Board of Trade lists futures contracts on the fed funds rate. First Call First Call Corp. gathers research notes and "earnings estimates." from a large number of brokerage firms, both in the U.S. and abroad. First Call is sometimes quoted by the media for its consensus estimate of a company's earnings. Float The number of outstanding shares of a stock excluding shares that are held by officers and major stakeholders that have agreements not to sell until someone else is offered the stock. FOMC Minutes The FOMC minutes are released at 2:00 PM EST on pre-scheduled days. Minutes are prepared to provide the necessary information to Congress and the public on policies and actions of the FOMC. The summary description of economic and financial conditions contained in these minutes is based solely on the information that was available to the Committee at the time of the meeting. The minutes of each meeting of the Federal Open Market Committee are made available a few days after the next regularly scheduled meeting. For example, the minutes of the first meeting of the year are released a few days after the second meeting of the year. Gap Technical term used to describe the action in the price of a stock when it opens lower or higher than its previous close by a significant percentage. Good 'Til Cancelled Order Commonly referred to as "GTC", this trading choice means the order you place will remain open for a set period of time, unless the order is executed or canceled. Hedge Fund Investment vehicles, much like mutual funds, which are generally structured as partnerships wherein the number of investors is limited and whose general partner has made a substantial personal investment in the fund. The offering memorandum of most Hedge Funds allows them to use a combination of sophisticated investment strategies such as taking both long and short positions, using leverage and derivatives, and investing in many markets. The funds usually require investors to make a large fixed investment (i.e. $100,000) and only allows withdrawals at certain times of the year. Since Hedge Funds move billions of dollars in and out of markets quickly, they can have a significant impact on the day-to-day trading developments in the stock, bond, and futures markets. Hedging The purchase or sale of a derivative security (such as options or futures) in order to reduce or neutralize all or some portion of the risk of holding another security. Humphrey-Hawkins Testimony Among the most important speeches given by the Fed chairman. Testimony is held in February and July. While they're no longer officially Humphrey-Hawkins reports, they're still often called that. Index Indicators of trends in the markets, sections of the economy, or other economic indicators, such as precious metals or Treasuries. Some of the most common indices include the Dow Jones Industrial Average, the NASDAQ Composite, and the S&P 500. In-the-Money A put option that has a strike price higher than the underlying futures price, or a call option with a strike price lower than the underlying futures price. Inflation Increase in the prices for goods and services. Initial Public Offering An issue of new stock by a once private company to transform itself into a publicly held one. IPO's are usually done to raise cash for growing young companies that need larger sources of capital than the private sector can provide. The new shares are sold to one or more investment banks, which then sell them to the public. Insider Someone who has information which, if made public, would likely influence the price of a stock. Also defined as someone with at least 10% ownership, a company officer, or a company director. Institutional Investors Organizations whose primary purpose is to invest their own assets or those entrusted to them by others. The most common are employee pension funds, insurance companies, mutual funds, university endowments, and banks. Interest The cost of borrowing money. Since bonds represent a loan to a company, they receive interest, while stocks represent ownership, thus receiving a share of earnings. Interest Rate Another important economic indicator. The price, calculated as a percentage of the money loaned, that banks are charging borrowers for the use of the banks’ money. In-the-Money A put option that has a strike price higher than the underlying futures price, or a call option with a strike price lower than the underlying futures price. Investment Bank Also known as underwriters, investment banks serve as middlemen between corporations issuing new securities and the buying public. Normally one or more investment banks buy the new issue of securities from the issuing company for a negotiated price. The company walks away with this new supply of capital, while the investment banks form a syndicate and resell the issue to their customer base and the investing public. Investment banks perform a variety of other financial services, such as merger and acquisition advice and market analysis. IRA (Individual Retirement Account) An individual pension fund that anyone may open with a bank. An IRA permits investment of contributed funds through intermediaries like mutual funds, insurance companies, and banks or directly in stocks and bonds through stockbrokers. Although IRA's are intended for retirement, money in an IRA enjoys many tax advantages over traditional investments, but may not be withdrawn early without heavy penalty fees. January effect At the end of the year, investors start worrying about taxes. Towards the end of the year, investors may sell some stocks that they've seen a loss on -- not because they don't like them anymore, but because they can take those losses out of their annual bill from Uncle Sam. This selling will knock stocks down a bit toward the end of the year -- particularly small-caps, since they're not as liquid. In January, investors will be in there buying back their lost darlings, often giving stocks a boost. Junk Bonds The bonds typically offer higher yields and carry higher risk than bonds with investment-grade ratings. LEAPS Long-term Equity Anticipation Securities are long-term stock or index options. LEAPS, like all options, are available in two types, calls and puts, with expiration dates up to three years in the future. Limit Order This trading choice lets you set a price, or "limit," where you want to buy or sell a security, regardless of the current market price. When buying, the limit is placed at a specified price below the market price. When selling, the limit is placed at a specified price above the market price. Locked Market A market is locked if the bid price equals the ask price. Long Long is the same thing as saying you are buying or holding a stock. MACD An indicator used in technical analysis. MACD is a moving average convergence/divergence. In simple terms, it is used to gauge the strength of a stock's move. It determines the balance of power between the bulls and bears. Management Fees A fee paid to a mutual fund managers for portfolio supervision and general management of the fund. The fee exists to compensate the manager for the expenses it incurs in providing its services, plus a profit that amounts to half of the fee or more. Some fees incorporate an incentive or penalty provision that is tied to a correlating index or benchmark. Margin Buying a security on margin occurs when you borrow money to buy a security. The amount you borrow is also referred to as a "debit balance." See Margin Call. Margin Call A requirement for additional funds, which occurs when the market value of the securities in your account drops below a certain maintenance level, relative to the equity in your account. Market Capitalization Also called market cap, this is the price per share times the number of shares outstanding. Market-On-Close (MOC) Order A market order which is to be executed in its entirety at the closing price, on the Exchange, of the stock named in the order, and if not so executed, is to be treated as cancelled. The term "at the close order'' shall also include a limit order that is entered for execution at the closing price, on the Exchange, of the stock named in the order pursuant to such procedures as the Exchange may from time to time establish. Market Order An order to immediately buy or sell a security at the current trading price. A market order can only be executed during market hours. Momentum Refers to a company's technical price momentum or fundamental earnings momentum. Companies with strong momentum have prices and earnings that are going up, while companies with weak momentum have prices and earnings that are going down, or going nowhere. Money Market Account An account in which your money is reinvested in short-term securities by the bank or investment firm managing the account. Money Market Fund A mutual fund which specializes in investing in high-yield money instruments such as federal securities, CDs and commercial paper. The object is to make such instruments, normally available only in large denominations to institutional investors, available indirectly to individuals. Mutual Fund A fund that pools the money of its investors to buy a variety of securities. Open-end mutual funds sell as many shares as investors want. Closed-end mutual funds offer only a fixed number of shares and usually trade on an exchange. Naked Option Sometimes called an uncovered option, a naked option is one whose seller does not maintain an equivalent position in the underlying security. For example, the owner of a call has the option to buy the underlying stock from the writer of the call. However, if the writer does not own that stock the option is naked. When the holder decides to exercise his option, the writer will be forced to buy the stock on the open market, and then resell it at the lower strike price. This will result in a loss for the writer. For obvious reasons, writing naked options is risky and must be done in a margin account. NASDAQ The National
Association of Securities Dealers Automatic Quotation System (NASDAQ) is a
computer system established to facilitate trading without a physical
exchange. To accomplish this, the NASDAQ posts real-time broker/dealer
quotes on Over-The-Counter (OTC) stocks. Approximately 4,000 common stock
issues are included in the NASDAQ system. Net Asset Value (NAV) The NAV of a mutual fund is the per share market value of a mutual fund, which in general, is the price offered to purchase one share of the mutual fund. The NAV in most cases is calculated by including the closing day's prices of all securities held in a particular fund, plus all other assets owned by the fund (including cash), subtracting all liabilities of the fund, and then dividing the sum by all the outstanding shares of the fund on that given day. If the fund is a No-Load fund, then the offering per share price of the fund and the NAV per share will be the same. No-Load A class of mutual funds where there are no fees associated with the purchase or sale of the shares. It is important to note, however, that there may be other fees associated with the fund, such as transaction fees and management fees. NYSE Founded in
1792, the New York Stock Exchange (NYSE) is the largest and oldest exchange
in the United States. It is located on Wall Street in New York City and
trades more than 2,000 common and preferred stocks. Options Contracts giving the owner right to buy (Call) or sell (Put) the underlying stock at a specified price (Strike Price). Options have a limited time value (Expiration Month) and can be extremely speculative investments. Out-Of-The-Money A call option is out-of-the-money when the strike price is above the price of the underlying security. Likewise, a put option is out-of-the-money when the exercise price is below the price of the underlying security. An out-of-the-money option is one that has no intrinsic value. Overbought Refers to a stock that has risen sharply in price or to the market as a whole after a period of vigorous buying which, it is sometimes said, has left prices "too high". Oversold Refers to a stock that has fallen sharply in price or to the market as a whole when it appears to have declined to an unreasonable level from vigorous selling. Over-The-Counter Stocks (OTC) Stocks traded on the NASDAQ and other Over-the-Counter (OTC) markets. The over-the-counter market is conducted over the telephone and computer and deals mainly with stocks of companies without sufficient shares, stockholders, or earnings to warrant listing on an exchange. Price-To-Earnings Ratio (P/E) A ratio to evaluate a stock's worth. It is calculated by dividing the stock's price by an earnings-per-share figure. If calculated with the past year's earnings, it is called the trailing P/E. If calculated with an analyst's forecast for next year's earnings, it is called a forward P/E. Also called the P/E ratio or multiple. Price-to-Sales Price divided by the trailing four quarters of reported sales. Program Trading Stock trades involving the purchase or sale of a basket including 15 or more stocks with a total market value of $1 million or more. Most program trades are executed on the New York Stock Exchange, using computerized trading systems. Index arbitrage is the most prominently reported type of program trading. Prospectus The official document that, according to SEC regulations, must be provided by the issuer to potential purchasers of a new securities issue. It highlights the much longer Registration Statement filed with the Commission that gives information on the financial well being of the issuer and the specifics of the issue itself. Potential investors can consult this information before buying. Purchasing Managers' Index Also known as the NAPM report or PMI. This is a national manufacturing index based on a survey of purchasing executives at roughly 300 industrial companies. Signals expansion when the PMI is above 50 and contraction when below 50. Put Option Contract A put is an option contract that gives the holder the right to sell a certain quantity of shares of a specified security at a specified price within a specific time period. You can either buy the put option, giving you the right to "put" the stock to the buyer, or you can sell the put option, giving someone the right to "put" the stock to you. If you write, or sell, a put without being short the equivalent amount of the underlying stock, that is called an uncovered put. If you write the put while you are short the equivalent amount of the underlying stock, then it is called a covered put. Recession Popular term that is often misused by the media. By definition, a recession is defined as two or more successive quarters of a decline in production as measured by the GDP. Record Date The date on which you must be registered as a shareholder of a company in order to receive a declared dividend or, among other things, to vote on company affairs. Resistance A price level with which as stock has difficulty rising above. This can indicate a concentration of supply at this price level, whereby an uptrend may have a strong possibility to hold or reverse itself. See Support. SEC The
Securities and Exchange Commission, the primary federal regulatory agency of
the securities industry. Sell Short This is when you sell a security that you do not own but are committed to repurchasing (Buy to Cover). In essence, after borrowing the stock and selling it in the open market, you are able to buy back the stock to cover or close the position. The strategy is to purchase the security at a price lower than at which it was sold short. Investors employ this strategy if they believe the price of a security will decline. Sell Side The sell side refers to the analyst who covers companies for brokerage houses. They sell stock ideas and tips and make money off the trading their clients do and the stock and bonds offered by the companies their analysts cover. Well-known and respected sell side analysts include Dan Niles, Ashok Kumar, and Rick Sherlund. They offer many different ratings, with the highest being a strong buy. Settlement Date The date on which either payment (in the case of a purchase) or securities (in the case of a sale) are due to settle a trade. The current settlement period is three business days after the trade date for stocks and mutual funds and one business day after the trade date for options. Shares Outstanding The number of authorized shares in a company that are held by investors, including employees and executives of that company. Unissued shares or treasury shares are not included in this figure. Short You are "short" in the market when you have sold short a market position but have not yet closed out this position through a covering purchase. SOX Also known as the Philadelphia Semiconductor Index. It is a price-weighted index made up of 16 U.S. semiconductor companies primarily involved in the design, distribution, manufacture and sale of semiconductors. It's a closely watched index of the semiconductor industry, and by extension, the tech sector. Spread The difference between the bid and the ask price of a security. See Bid and Ask. S&P 500 The Standard & Poor's 500 is a market value weighted index of 500 blue chip stocks. This index is considered to be an overall benchmark of the market as a whole. Stochastics An indicator used in technical analysis. Stochastics are often used to determine whether a stock is overbought or oversold. Stock Split When a company increases the number of shares outstanding by splitting existing shares. A 2-for-1 split means every stockholder gets two new shares for each one they own, and a 3-for-2 split means they get three shares for every two they own. The price of an individual share falls, but stockholders do not lose money because they are being given the equivalent number of new shares. Stop Limit Order An order to buy or sell at a specified price or better (called a stop-limit price), but only after a given stop price has been reached or passed. It is a combination of a stop order and a limit order. Stop Order When you want to buy a security, a stop order is an order to buy at the market when the price increases to the specified level. When you want to sell a security, a stop order is an order to sell at the market when the price falls to a specified level. Strike Price The price at which the owner of an option may buy or sell the underlying security. Support The price for a stock identifying the lowest likely trading price under present conditions, below which the price of the stock is not likely to fall. Technical Analysis Technical analysis deals with identifying trends of the market and stocks. Ticker Symbol These are letters assigned to a particular stock, option, or mutual fund used to identify that particular security for trading or quoting purposes. A ticker symbol with three (3) letters or less implies that the stock trades on the New York Stock Exchange, while a ticker symbol of four letters or more implies that stock trades on the NASDAQ. Total Expense Ratio An annual fee charged to mutual fund shareholders (usually as a % of total investment) for the administration, operations, and management expenses associated with a particular mutual fund. The annual expense may include management fees, 12(b)1, and other fees. Trading Range The difference between the high and low prices traded during a period of time. Trailing Stops A smarter way to participate in further upside but prevent yourself from any downside is to place stop loss orders in stocks your trading on momentum. Basically, you're moving your stop loss order higher as the stock moves higher, in order to lock in profits as they come. Treasury Bills Also known as "T-bills," these are debt obligations of the United States Government with an initial maturity of one year or less. T-bills are generally issued with maturities of 3, 6, and 12 months. The minimum purchase size for T-bills is $1,000. Treasury Bonds Also known as "T-bonds," these are debt obligations of the United States Government with maturities of more than ten years. They are issued in minimum purchase size of $1,000. T-bonds have a stated rate of interest, also known as the coupon rate, and pay interest to the holder semiannually. Treasury Notes Also known as "T-notes," these are debt obligations of the United States Government with maturities of more than two years but less than ten years. T-notes are issued in minimum purchase size of $1,000. T-notes have a stated rate of interest, also known as the coupon rate, and pay interest to the holder semiannually. Trend Lines A trend is the general direction in which stocks tend to move. A line is a path traced by a moving point (this is the fancy definition...we all know what a line is). When you combine the two words together, you get an extremely powerful technical indicator that can be used to generate entry/exit points. Triple Witching The simultaneous expiration of options, index options, and future contracts. Uncovered Call A short call option position in which the writer does not own shares of underlying stock represented by his option contracts. Also called a "naked" call, it is much riskier for the writer than a covered call, where the writer owns the underlying stock. If the buyer of a call exercises the option to call, the writer would be forced to buy the stock at market price. Uptick A sale of a listed security that occurs at a higher price than the previous transaction. On U.S. stock exchanges you only can sell a stock short on an uptick. Venture Capital An investment in a start-up business that is perceived to have excellent growth prospects but does not have access to capital markets. Venture capital is the type of financing sought by early-stage companies seeking to grow rapidly. VIX The Chicago Board Options Exchange Volatility Index, or VIX, as it is better known, is used by stock and options traders to gauge the market's anxiety level. Readings toward 20 indicate short-term tops, while readings at or above 30 indicate short-term bottoms. Volatility A measure of the fluctuation in market price of a security. A volatile issue has frequent and large swings in price. Mathematically, volatility is calculated as the annualized standard deviation of returns. Volume A stock's volume is the total number of shares transacted during the session (one day). Yield In stocks and bonds, yield is the amount of money returned to investors on their investments. Also known as rate of return. Yield to Maturity The yield of a bond to maturity takes into account the price discount from or premium over the face amount. It is greater than the current yield when the bond is selling at a discount and less than the current yield when the bond is selling at a premium. Zero-Coupon Treasury Securities Zero-coupon Treasury securities, often called Treasury STRIPS, are U.S. Treasury Bonds which have been "stripped" or divided into principal and interest components, which are then sold separately. Zero-coupon securities make no periodic interest payments, but rather are sold at a discount from their face value. Accordingly, the difference between the discounted price and the face value represents the investor's return.
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Hope you didn't expect a Copyright down here! 2005
