Lexicon Bunny

Adverse Opinion

2008-01-15T15:58:00.000-07:00

An independent auditor's statement annexed to a company's financial statement that indicates the financial statement does not accurately reflect the company's true financial position.

Across the Board

2008-01-15T15:57:00.000-07:00

A directional move in stock prices that affects most issues.

Deep Pockets

2008-01-14T10:39:00.000-07:00

In financial speak, it is a reference to an investor or company with cash reserves. Deep pockets are very useful in buyouts.

In the legal world, deep pockets refers to the defendant in a case with the most insurance or assets from whom recovery can be made.

Well... that's sort of the same thing...

Decimal Pricing

2008-01-14T10:38:00.000-07:00

The use of decimals in quoting prices on securities rather than using fractions. Fractions were used prior to 2000.

Debt Financing

2008-01-12T14:41:00.003-07:00

The raising of capital to purchase a company through the sale of bonds.

Debt Ceiling

2008-01-12T14:41:00.001-07:00

The maximum amount of money a bond issuer can owe.

Debit Balance

2008-01-11T11:30:00.002-07:00

The amount owed to a broker on a margin account.

(And you thought it had something to do with your debit card!)

Debenture Bond

2008-01-11T11:30:00.001-07:00

An instrument that pays interest and is secured by the general credit of the issuer.

Death Tax

2008-01-08T12:31:00.001-07:00

Nickname for an inheritance tax.

Death Future

2008-01-08T12:30:00.000-07:00

The nickname for an investment in which the death benefits for a terminally ill person are bought out in a lump sum.

Dear John Memo

2008-01-07T09:32:00.001-07:00

A notice from a brokerage firm that an online trader received no requested shares in an IPO.

Dead Hand Poison Pill

2008-01-07T09:31:00.000-07:00

A resolution passed by a Board of Directors to stop a takeover by a third party.

Death Valley Curve

2007-12-26T11:06:00.001-07:00

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

Dear Money

2007-12-16T13:37:00.000-07:00

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

2007-12-16T13:36:00.000-07:00

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

2007-12-09T11:56:00.001-07:00

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

2007-12-09T11:54:00.000-07:00

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

Day Order

2007-12-07T12:37:00.001-07:00

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

DAX 100

2007-12-07T12:36:00.001-07:00

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

Date of Record

2007-12-03T10:28:00.001-07:00

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

Date of Issue

2007-12-03T10:27:00.001-07:00

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

Dated Date

2007-11-28T11:22:00.001-07:00

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

2007-11-28T11:21:00.000-07:00

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

Cyclical Stock

2007-11-26T09:23:00.000-07:00

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

2007-11-26T09:22:00.001-07:00

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

2007-11-25T19:23:00.000-07:00

The number identifying all stocks and registered bonds.

Current Yield

2007-11-25T19:22:00.000-07:00

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

Current Assets

2007-09-10T11:07:00.002-07:00

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

Curb

2007-09-10T11:07:00.001-07:00

Also known as the American Stock Exchange.

Crossed Trades

2007-09-10T11:06:00.001-07:00

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

Crossed Market

2007-09-10T11:05:00.000-07:00

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

Credit Watch

2007-09-07T08:57:00.001-07:00

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

Coupon

2007-09-07T08:56:00.000-07:00

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

Correction

2007-09-07T08:55:00.000-07:00

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

2007-09-04T16:42:00.001-07:00

A debt instrument issued by a corporation.

Cooling Off Period

2007-09-04T16:41:00.000-07:00

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

Cook the Books

2007-09-04T16:40:00.000-07:00

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

Contrarian

2007-09-03T09:38:00.001-07:00

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

2007-09-03T09:36:00.000-07:00

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

2007-09-03T09:35:00.000-07:00

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

Consumer Confidence Index

2007-08-21T09:32:00.000-07:00

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

CQS - Consolidated Quotation System

2007-08-21T09:31:00.002-07:00

A system that provides quotes on all major US exchanges.

Consolidated Financial Statement

2007-08-15T12:10:00.001-07:00

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

Concensus Forecast

2007-08-15T12:09:00.002-07:00

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

Confidence Index

2007-08-15T12:09:00.001-07:00

Several indicators used to measure consumer confidence.

Common Stock

2007-08-15T12:08:00.000-07:00

Shares of stock issued by a public corporation.

Common Market

2007-08-13T16:32:00.001-07:00

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

Commingling

2007-08-13T16:31:00.000-07:00

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

Commercial Paper

2007-08-13T16:30:00.000-07:00

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

2007-08-08T14:34:00.005-07:00

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

Clearing Corp

2007-08-08T14:34:00.003-07:00

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

Circuit Breakers

2007-08-08T14:32:00.000-07:00

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

2007-08-05T17:01:00.001-07:00

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

Chinese Wall

2007-08-05T17:00:00.001-07:00

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

2007-08-05T16:59:00.001-07:00

Chartist is another name for a technical analyst.

Charitable Remainder Trust

2007-07-29T17:25:00.000-07:00

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

2007-07-29T17:24:00.000-07:00

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

Capital Gain

2007-07-28T09:23:00.000-07:00

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

2007-07-28T09:22:00.000-07:00

The right to redeem outstanding bonds before their maturity.

Buying on Margin

2007-07-27T18:52:00.001-07:00

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

2007-07-27T18:51:00.001-07:00

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

Bull Market

2007-07-25T09:51:00.001-07:00

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

Bucket Shop a/k/a Boiler Room

2007-07-25T09:49:00.000-07:00

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

2007-07-23T08:22:00.000-07:00

The percentage of stocks participating in a market move.

Bond

2007-07-23T08:21:00.000-07:00

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

2007-07-23T08:20:00.000-07:00

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

2007-07-20T09:55:00.001-07:00

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

2007-07-20T09:40:00.000-07:00

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

Beta

2007-07-19T10:29:00.000-07:00

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

2007-07-19T10:28:00.000-07:00

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

Bull Market

2007-07-18T11:22:00.001-07:00

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

Bear

2007-07-18T11:20:00.002-07:00

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

2007-07-18T11:20:00.001-07:00

The smallest measure used in quoting bonds.

One basis point = 0.01%.

Basis

2007-07-17T19:41:00.001-07:00

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

2007-07-17T19:40:00.000-07:00

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

Bankruptcy

2007-07-16T23:07:00.000-07:00

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

2007-07-16T23:05:00.000-07:00

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

Balance Sheet

2007-07-15T09:51:00.000-07:00

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

Balanced Mutual Fund

2007-07-15T09:50:00.000-07:00

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

Back End Load

2007-07-13T09:37:00.000-07:00

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

2007-07-13T09:36:00.001-07:00

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

Aunt Millie

2007-07-12T09:54:00.002-07:00

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

At The Close

2007-07-12T09:54:00.001-07:00

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

Asset Allocation

2007-07-12T09:52:00.000-07:00

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

2007-07-09T12:59:00.000-07:00

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

Arbitrage

2007-07-09T12:56:00.000-07:00

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

2007-07-08T23:46:00.000-07:00

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

2007-07-08T23:44:00.000-07:00

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

Annuitant

2007-07-08T23:43:00.000-07:00

An annuitant is an individual receiving benefits from an annuity.

Annual Report

2007-07-07T10:14:00.000-07:00

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

2007-07-07T10:12:00.000-07:00

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

2007-07-05T09:16:00.000-07:00

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

2007-07-05T09:11:00.000-07:00

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

2007-07-03T09:25:00.001-07:00

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

2007-07-03T09:22:00.000-07:00

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

2007-07-02T10:59:00.000-07:00

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

2007-07-01T19:01:00.000-07:00

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

2007-07-01T08:43:00.000-07:00

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.