Financial and Investment Glossary
Financial Dictionary
Baby Bond
A bond with a face value that is less than $1000.
Balance Sheet
An official financial statement that includes a company's assets and liabilities. To determine a company's net worth, you subtract its liabilities from its assets.
Balanced Fund
A type of mutual fund that typically buys a mixture of bonds, preferred stock, and common stock to achieve the highest return with the lowest risk. It blends long-term growth from stocks with income from bonds.
Basis Point
Smallest measure used in quoting yields. One basis point is 0.01% or one one-hundredth of a percent. For example, 100 basis points equal 1%.
Basis Price
The basis price is a way of quoting and trading bonds, and is another term for yield to maturity. In contrast, bonds that are traded and quoted in dollar prices, are often referred to as dollar bonds.
Bear Market
A market that is declining; stock prices are falling, and so is the amount of money that companies have to spend on growth.
Bearer Bond
Bonds issued with detachable coupons that must be presented to a paying agent or the issuer for semiannual interest payments. Also known as Coupon Bond. Securities are no longer issued in this format, but instead are issued as registered bonds or book entry. See Bond Form.
Beneficiary
A person, organization, or trust who will receive the proceeds of a life insurance policy when the insured person dies.
Best Rolling 3 Month Performance Over Last 3 Years
The highest percentage return measured during any consecutive three month period during the last 3 years. This figure includes dividends or interest payments and capital gains or losses, but excludes sales charges or loads, redemption fees and taxes.
Beta
Related to Mutual Funds: Measures a Fund's relative volatility, as compared to a standard market index, such as the S&P 500. (By definition a market's beta will always be equal to one.) A Fund with a higher beta (more than 1) is more volatile than the market.
Bid
Price a buyer is prepared to pay for a security.
Bid (Bid Size)
Price a buyer is prepared to pay for a security and the size of the order. In many cases, the Bid Market also displays the Exchange the bid was made.
Bid Time
The time of day that corresponds with the posting of a bid price for a security.
Binder
A temporary insurance policy that expires at the end of a specific time period or when the permanent policy is written.
Black Out Date (s)
A period of time prior to the release of annual or quarterly financial earnings information during which a specified group of employees of a public company are restricted by the company's insider trading policy from trading in company stock.
Block
A large amount of securities being held or trade. Typically at least 10,000 shares of stock or $200,000 in bonds.
Blue-Chip Fund
A type of mutual fund that invests in blue chip stocks, also known as a growth fund.
Blue-Chip Stocks
Stocks of aged companies that have paid regular dividends in both good and bad years. Blue-chip stocks are relatively conservative investments.
Bond
A type of security that pays a fixed amount of interest at a regular interval over a certain period of time. Bonds are essentially loans given to companies and government entities who promise to pay back the loan at a specified interest rate. Bonds are considered less risky investments than stocks.
Bond Discount
The difference between a bond's par value and its market price.
Bond Equivalent Yield
The amount of yield an investor must earn from a taxable bond in order to get the same amount of money he or she would earn on a tax-free bond.
Bond Form
Bearer: Bonds issued with coupons attached to be mailed to the issuer for each interest payment. Securities are no longer issued in this format, but instead are issued as registered bonds or book entry.
Registered: All new bond issues must be registered with the issuer, and are available as either Registered Bond Certificates or Book Entry. Holders of Registered Bond Certificates receive a certificate with a brief description of the terms printed on both sides. Interest payments are received automatically to the registered owner on the due date.
Book Entry: In lieu of receiving the Registered Bond Certificate, securities are frequently available in Book Entry Form. The certificate is held by a central securities depository, and the investor receives only a receipt as evidence of ownership instead of an engraved certificate. The bond will be held in the account at the financial institution.
Bond Holder
A person who owns a bond.
Bond Premium
The difference between a bond's market price and its par value.
Book Value
The total asset value of a company minus intangible assets and total liabilities.
Break Even Price
The stock price (or prices) at which a particular strategy neither makes nor loses money. It generally pertains to the result at the expiration date of the options involved in the strategy.
Break Points
In mutual funds, the dollar investment required to make a fund holder eligible for a lower sales charge.
Broker
A broker is someone who handles the transfer of a security from a seller to a buyer. Brokers must be licensed by the Securities and Exchange Commission (SEC).
Broker-Dealer
As a broker, acts as an agent employed to effect bargains and contracts in securities, as a middleman between other persons, for compensation commonly called brokerage. As a dealer, trades securities as a market maker and/or principal with other dealers and with customers.
Brokerage
A brokerage is a business that employs brokers to enact transactions between securities sellers and buyers.
Brokerage/Investment Account
An account with a brokerage firm set up in your name to hold securities and to facilitate equity and investment transactions.
Bull Market
A market in which prices are moving upward.
Buy
An order to purchase a security. This is the order or instruction to buy, not the actual purchase transaction.
Buy Call
An option contract that gives the holder the right to buy the underlying security at a specified price for a certain, fixed period of time.
Buy Fund Symbol
The fund symbol that you are buying when entering a mutual fund exchange
Buy Order(Purchase)
In securities trading, an order to a brokerage firm/broker to purchase a specified quality of a security at the market price or limited price.
Buy Put
An option contract that gives the holder the right to sell the underlying security at a specified price for a certain, fixed period of time.
Buy To Close
Buying an option contract to close out a pre-existing short position.
Buy To Cover
The purchase of a long position to offset a short position.
Buy To Open
Buying an option contract to establish a new position.
Buying On Margin
When an investor borrows money from a broker to buy a security. Investors usually do this when they are confident that the price of a security will go up.
Buying Power
The amount which can be used for purchases of marginable securities without deposit of additional funds or securities.
A bond with a face value that is less than $1000.
Balance Sheet
An official financial statement that includes a company's assets and liabilities. To determine a company's net worth, you subtract its liabilities from its assets.
Balanced Fund
A type of mutual fund that typically buys a mixture of bonds, preferred stock, and common stock to achieve the highest return with the lowest risk. It blends long-term growth from stocks with income from bonds.
Basis Point
Smallest measure used in quoting yields. One basis point is 0.01% or one one-hundredth of a percent. For example, 100 basis points equal 1%.
Basis Price
The basis price is a way of quoting and trading bonds, and is another term for yield to maturity. In contrast, bonds that are traded and quoted in dollar prices, are often referred to as dollar bonds.
Bear Market
A market that is declining; stock prices are falling, and so is the amount of money that companies have to spend on growth.
Bearer Bond
Bonds issued with detachable coupons that must be presented to a paying agent or the issuer for semiannual interest payments. Also known as Coupon Bond. Securities are no longer issued in this format, but instead are issued as registered bonds or book entry. See Bond Form.
Beneficiary
A person, organization, or trust who will receive the proceeds of a life insurance policy when the insured person dies.
Best Rolling 3 Month Performance Over Last 3 Years
The highest percentage return measured during any consecutive three month period during the last 3 years. This figure includes dividends or interest payments and capital gains or losses, but excludes sales charges or loads, redemption fees and taxes.
Beta
Related to Mutual Funds: Measures a Fund's relative volatility, as compared to a standard market index, such as the S&P 500. (By definition a market's beta will always be equal to one.) A Fund with a higher beta (more than 1) is more volatile than the market.
Bid
Price a buyer is prepared to pay for a security.
Bid (Bid Size)
Price a buyer is prepared to pay for a security and the size of the order. In many cases, the Bid Market also displays the Exchange the bid was made.
Bid Time
The time of day that corresponds with the posting of a bid price for a security.
Binder
A temporary insurance policy that expires at the end of a specific time period or when the permanent policy is written.
Black Out Date (s)
A period of time prior to the release of annual or quarterly financial earnings information during which a specified group of employees of a public company are restricted by the company's insider trading policy from trading in company stock.
Block
A large amount of securities being held or trade. Typically at least 10,000 shares of stock or $200,000 in bonds.
Blue-Chip Fund
A type of mutual fund that invests in blue chip stocks, also known as a growth fund.
Blue-Chip Stocks
Stocks of aged companies that have paid regular dividends in both good and bad years. Blue-chip stocks are relatively conservative investments.
Bond
A type of security that pays a fixed amount of interest at a regular interval over a certain period of time. Bonds are essentially loans given to companies and government entities who promise to pay back the loan at a specified interest rate. Bonds are considered less risky investments than stocks.
Bond Discount
The difference between a bond's par value and its market price.
Bond Equivalent Yield
The amount of yield an investor must earn from a taxable bond in order to get the same amount of money he or she would earn on a tax-free bond.
Bond Form
Bearer: Bonds issued with coupons attached to be mailed to the issuer for each interest payment. Securities are no longer issued in this format, but instead are issued as registered bonds or book entry.
Registered: All new bond issues must be registered with the issuer, and are available as either Registered Bond Certificates or Book Entry. Holders of Registered Bond Certificates receive a certificate with a brief description of the terms printed on both sides. Interest payments are received automatically to the registered owner on the due date.
Book Entry: In lieu of receiving the Registered Bond Certificate, securities are frequently available in Book Entry Form. The certificate is held by a central securities depository, and the investor receives only a receipt as evidence of ownership instead of an engraved certificate. The bond will be held in the account at the financial institution.
Bond Holder
A person who owns a bond.
Bond Premium
The difference between a bond's market price and its par value.
Book Value
The total asset value of a company minus intangible assets and total liabilities.
Break Even Price
The stock price (or prices) at which a particular strategy neither makes nor loses money. It generally pertains to the result at the expiration date of the options involved in the strategy.
Break Points
In mutual funds, the dollar investment required to make a fund holder eligible for a lower sales charge.
Broker
A broker is someone who handles the transfer of a security from a seller to a buyer. Brokers must be licensed by the Securities and Exchange Commission (SEC).
Broker-Dealer
As a broker, acts as an agent employed to effect bargains and contracts in securities, as a middleman between other persons, for compensation commonly called brokerage. As a dealer, trades securities as a market maker and/or principal with other dealers and with customers.
Brokerage
A brokerage is a business that employs brokers to enact transactions between securities sellers and buyers.
Brokerage/Investment Account
An account with a brokerage firm set up in your name to hold securities and to facilitate equity and investment transactions.
Bull Market
A market in which prices are moving upward.
Buy
An order to purchase a security. This is the order or instruction to buy, not the actual purchase transaction.
Buy Call
An option contract that gives the holder the right to buy the underlying security at a specified price for a certain, fixed period of time.
Buy Fund Symbol
The fund symbol that you are buying when entering a mutual fund exchange
Buy Order(Purchase)
In securities trading, an order to a brokerage firm/broker to purchase a specified quality of a security at the market price or limited price.
Buy Put
An option contract that gives the holder the right to sell the underlying security at a specified price for a certain, fixed period of time.
Buy To Close
Buying an option contract to close out a pre-existing short position.
Buy To Cover
The purchase of a long position to offset a short position.
Buy To Open
Buying an option contract to establish a new position.
Buying On Margin
When an investor borrows money from a broker to buy a security. Investors usually do this when they are confident that the price of a security will go up.
Buying Power
The amount which can be used for purchases of marginable securities without deposit of additional funds or securities.