Death Valley Curve

A venture capital term that describes a start-up company's rapid use of capital.

Dear Money

While you might be tempted to think this is a salutation when sending a note to your account, it is actually a British term for "tight money."

Well... they are British!

Dealer

Keeping in mind this is a financial dictionary, any thoughts of illegal substances should be dismissed immediately. Having said that...

A dealer, in the financial realm, is an individual or firm acting as a principal who trade for their own account.

Dead Cat Bounce

Despite what cat-haters might think, it hasn't a thing to do with felines, tall buildings, or grotesque amusements...

A sharp rise in stock prices after a severe decline, usually temporary, is known as a "dead cat bounce."

Day Trade

The purchase and sale of a position on the same day.

Day Order

An order to buy or sell securities that expires at the end of the day unless it is executed.

DAX 100

A price-weighted index of the 100 most-traded stocks in the German Market.

Date of Record

The date on which a shareholder must own shares in order to receive a dividend.

Date of Issue

The date on which a bond is issued and from which interest begins to accrue.

Dated Date

Nope. That's not a typo!

A "dated date" is the date from which accrued interest is calculated when a person purchases a bond.

Daisy Chain

Market manipulation to create the appearance of active volume is called a "daisy chain." This practice is illegal.

Cyclical Stock

In traditional terms, a stock that tends to rise quickly when the economy turns up and falls quickly when the economy takes a downturn.

Custodial Account

An account that is created for a minor or an incompetent that is overseen by a custodian or trustee. The account is typically formed under the Uniform Gifts to Minors Act, but may be created through court order in an incompetency case or similar proceeding.

CUSIP Number

The number identifying all stocks and registered bonds.

Current Yield

The interest on a bond divided by the price of a bond reveals the "current yield."

Current Assets

Assets that can be converted into cash, sold, or exchanged within a year.

Curb

Also known as the American Stock Exchange.

Crossed Trades

Illegal trades on major exchanges where buy and sell orders are offset with each other and are not recorded as a trade.

Crossed Market

When one broker's bid is higher than another broker's lowest offer. This is unlawful.

Credit Watch

A notation used by bond rating agencies to show a company's credit is under review.

Coupon

The interest rate on a debt security the issuer promises to pay to the holder until maturity.

Correction

As it relates to the stock market (not the times when you wish you had a little White Out), a correction is a reverse movement in the market, sector, or specific stock.

Traditionally, a correction is considered a reverse movement of 10% or more.

Corporate Bond

A debt instrument issued by a corporation.

Cooling Off Period

The interval between filing a preliminary prospectus with the SEC and the offer of the securities to the public.

Cook the Books

When a company intentionally falsifies their financial statements, it's known as "cooking the books."

Contrarian

Any investor who does the opposite of what most investors are doing at a particular time is known as a "contrarian."

Consumer Price Index - CPI

The Consumer Price Index (CPI) is published by the Bureau of Labor Statistics. It is produced monthly and measures a basket of goods bought by a consumer. This index is widely used as a cost-of-living benchmark.

Consumer Durables

Products with life expectancy of three or more years that are bought by consumers are considered "consumer durables."

Consumer Confidence Index

Published monthly by the conference board, the report shows results of surveys on attitudes and buying intentions.

CQS - Consolidated Quotation System

A system that provides quotes on all major US exchanges.

Consolidated Financial Statement

A statement that presents all assets, liabilities, and operating accounts of a company.

Concensus Forecast

Predictions based upon the forecasts made by a group of security analysts.

Confidence Index

Several indicators used to measure consumer confidence.

Common Stock

Shares of stock issued by a public corporation.

Common Market

The "common market" is a term used for the European economic community.

Commingling

The mixing of customer or client funds with a firm's operating account is known as "commingling."

Commercial Paper

Short-term obligations with maturities up to 270 days from date of issue. These are issued by banks, corporations, and private lenders and are typically unsecured.

Closed End Fund

A type of mutual fund that has a fixed number of shares that trade on a stock exchange.

Clearing Corp

A group that validates, delivers, and settles securities transactions.

Circuit Breakers

In the financial world, this term refers to the measures taken by major stock exchanges to halt or slow-down trading temporarily when the markets become extremely volatile.

Churning

Excessive trading by a broker in a client's account.

Chinese Wall

An imaginary barrier between the investment banking, research department, and sales department within a brokerage firm.

It's also a really neat structure bordering the edge of China and visible from space!

Chartist

Chartist is another name for a technical analyst.

Charitable Remainder Trust

An irrevocable trust that pays its income to an individual(s) until death. At that time, the balance, which is tax-free, passes to a designated charity.

Capital Stock

Stock authorized by a company's charter having value or no par value. This is also known as "common stock."

Capital Gain

The difference between the purchase price and the selling price, when the difference is positive and the asset was held longer than one year.

Alternatively, it could describe the paunch some Senators develop after holding office for several terms.

Call Bonds

The right to redeem outstanding bonds before their maturity.

Buying on Margin

The purchase of securities on credit through a brokerage firm using a margin account. This type of trading is regulated by the Federal Reserve Bank.

Buy and Hold Strategy

A plan that calls for holding shares in a company for a period of years without selling for any reason.

Bull Market

A prolonged rise in the prices of stocks, bonds, or commodities is known as a "bull market."

Bucket Shop a/k/a Boiler Room

A bucket shop is an illegal brokerage firm that accepts orders, but doesn't execute them or, if they do, it's to the broker's benefit only.

Of course, if you're talking about real buckets...

Breadth of the Market

The percentage of stocks participating in a market move.

Bond

An interest-bearing government or corporate security. The issuer pays the holder of the bond interest and the principal amount at the time of maturity (of the bond, not the investor).

Blue Sky Laws

Laws at the state level that protect investors against securities fraud.

Of course, if we were talking about weather forecasts, this would mean something entirely different!

Block Trade

A single trade of 10,000 or more shares of stock or 200,000 in bonds is known as a "block trade."

Now, if we were talking about a playground, it would mean something completely different and involve wooden blocks, small children, and the occasional skirmish over possession...

Bid

The price a buyer is willing to pay for a stock.

Beta

Having nothing whatsoever to do with a program going through its testing phase, in the financial world, "beta" refers to a measure of a stock's volatility relative to the rest of the market.

Beige Book

The Federal Reserve's report summarizing current economic conditions is known as the "Beige Book." It is published eight times a year.

Bull Market

When the market falls over a prolonged period, or when prices fall by 20%, it is considered a "bear market."

Bear

When talking about the stock market, it's a person with a pessimistic outlook.

Otherwise, it is a ferocious wild creature that Portfolio Bunny avoids at all costs.

Basis Point

The smallest measure used in quoting bonds.

One basis point = 0.01%.

Basis

The original cost plus out-of-pocket expenses less income.

Ex: Original shares cost $30 each with a total purchase of 100 shares. The purchase cost $50 to the broker to purchase the shares. The shares paid out dividends of $100 ($1 per share) this year.

$30 x 100 + $50 - $100 = $2,950 would be the "basis."

Barefoot Pilgrim

A term used within the financial community to refer to an investor who lost his shirt trading securities.

Bankruptcy

When an individual or organization cannot repay its debts and has become insolvent. There are two types of bankruptcies for both individuals and organizations--voluntary and involuntary.

Balloon

The final payment of a debt, typically much larger than preceding payments.

Balance Sheet

A balance sheet is a financial report showing a company's assets, liabilities, and owners' equity at a specific time.

Balanced Mutual Fund

A balanced mutual fund is one that buys common stock, preferred stock, and bonds.

Back End Load

Having absolutely nothing to do with the ratio of bottom to jeans...

"Back end load" is the redemption fee or penalty an investor pays when withdrawing money from an investment. Back end load is typically used in mutual funds and annuities.

Authorized Shares

The maximum number of shares a corporation may issue under its Articles of Incorporation.

Aunt Millie

Aunt Millie is an extremely derogatory term to describe an unsophisticated investor.

At The Close

A market order that is executed in full at the closing price.

Asset Allocation

A belief among many in the financial industry that diversification of your portfolio will minimize risk. This belief is based on fundamental analysis (as opposed to technical analysis).

Ask Price a/k/a Offered Price

The price at which a security is offered for sale is known as the "ask price" or "offered price."

Arbitrage

While there are many different definitions depending upon the context in which it is used, when talking about securities, arbitrage is the profiting from a difference in price between the same or different securities.

Annuity

An annuity is a contract sold by life insurance companies. The contract guarantees a fixed or variable payment to an individual at a future time. There are many different forms of annuities.

As with any contract, you should read all of the terms and conditions carefully before entering into an agreement to purchase. If you are considering investing in an annuity, the advice of an independent financial manager could be invaluable in determining whether your money will earn the greatest possible return relative to the risks and benefits.

Annuitize

When an annuity begins to make payments to an individual, it has annuitized.

Annuitant

An annuitant is an individual receiving benefits from an annuity.

Annual Report

An annual report is a yearly report of a company's financial condition. Under SEC Regulations, it must be distributed to all shareholders. It is also known as a 10-K.

American Stock Exchange - ASE

The American Stock Exchange is the second largest exchange in the United States. It is a leader in the development of Exchange Traded Funds (ETFs). It lists equities, corporate bonds, treasuries, and options.

American Depository Receipts - ADR

American Depository Receipts (ADR) are issued when you buy or sell shares in foreign companies in the form of US shares. The receipt for those shares is held in the vault of a US bank. The ADR entitles the shareholder to all dividends and capital gains.

All or None

All or none refers to a buy or sell order indicating that no partial transaction will be executed. The full order must be completed, or none at all.

An experienced, competent financial manager might advise you to issue an all or none order in certain instances. At the same time, it might serve your purpose and the goals of your portfolio to sell only part of your holdings in a particular investment or purchase only part of a block of shares at a select time.

Advance-Decline Line

While this might sound militaristic, it isn't.

When talking about the stock market, the advance-decline line measures the number of stocks that have advanced and the number that have declined over a particular period. This ratio can be used in technical analysis.

Accumulation Area

No, this has nothing to do with that spot in the backyard the dog seems particularly fond of.

Accumulation area is the price range in which a buyer accumulates shares of a stock. This data is sometimes used in technical analysis.

Accrued Interest

Accrued interest is the interest that has accumulated between the most recent interest payment and the sale of a bond.

Here's an example of how it works:

Bob owns a $1,000 bond at 5% interest. After an interest payment, 90 days later he decides to sell the bond to Ted. Ted will have to pay Bob the current price of the bond plus the interest that accrued during the 90 days since the last interest payment. On a $1,000 bond at 5%, the accrued interest would be $12.33. So, Ted would pay Bob the value of the bond in the market plus $12.33 in accrued interest.

Accredited Investor

An Accredited Investor, as defined under SEC Reg D, must have a net worth of at least $1 million or annual income of at least $200,000.

While most brokers and advisors seek out Accredited Investors for the obvious reason, remember that no matter how large or small your portfolio is, you're entitled to personal attention and honesty. You also have the right to expect your broker or advisor to give you the assistance you need to help grow your wealth. After all, it benefits you both!

Accommodative Monetary Policy

Lexicon Bunny loves to get right into the thick of it. So, let's talk about Accommodative Monetary Policy...

Quite simply, it's when the Federal Reserve increases the amount of money available for lending by banks. It is also known as "easing the money supply."

During this time, interest rates usually fall.