| Back
Office |
Brokerage
house clerical operations that support, but do not include, the trading
of stocks and other securities. Includes all written confirmation
and settlement of trades, record keeping and regulatory compliance. |
| Balance
Sheet |
A
condensed financial statement showing the nature and amount of a
company's assets, liabilities and capital on a given date. In dollar
amounts the balance sheet shows what the company owned, what it owed,
and the ownership interest in the company of its stockholders. |
| Banker's
Acceptance |
A
short-term credit investment created by a non-financial firm and
guaranteed by a bank as to payment. Acceptances are traded at discounts
from face value in the secondary market. These instruments have been
a popular investment for money market funds. |
| Basis
Point |
One
gradation on a 100-point scale representing one percent; used especially
in expressing variations in the yields of bonds. Fixed income yields
vary often and slightly within one percent and the basis point scale
easily expresses these changes in hundredths of one percent. For
example, the difference between 3.14% and 3.32% is 18 basis points. |
| Bear
Market |
A
condition of the stock market when prices of stocks are generally
declining. |
| Bear
Raid |
A
situation in which large traders sell positions with the intention
of driving prices down. |
| Bearer
Bond |
A
bond that does not have the owner 's name registered on the books
of the issuer. Interest and principal, when due, are payable to the
owner. |
| Beginning
Net Asset Value |
The
market value of a fund share on a predetermined start date. |
| Beta |
A
measure of the volatility of a stock relative to the overall market.
A beta of less than one indicates lower risk than the market; a beta
of more than one indicates higher risk than the market. Generaly
the S&P 500 is used as the underlying index to measure the overall
market for beta. |
| Bid
and Asked |
Often
referred to as a quotation or quote. The bid is the highest price
anyone wants to pay for a security at a given time, the asked is
the lowest price anyone will take at the same time. |
| Block |
A
large holding or transaction of stock , popularly considered to be
10,000 shares or more. |
| Blow-off
Top |
A
steep and rapid increase in price followed by a steep and rapid drop
in price. This is an indicator seen in charts and used in technical
analysis of stock price and market trends. |
| Blue-Chip
Stock |
Stock
in a company with a national reputation for quality, reliability
and the ability to operate profitably in good and bad times. |
| Bond |
Basically
an I.O.U. or promissory note of a corporation or municipality, usually
issued in multiples of $1,000 or $5,000. A bond is an evidence of
debt on which the issuing company usually promises to pay the bondholder
a specified amount of interest for a specified length of time, and
to repay the loan on the expiration date. A bondholder is a creditor
of the corporation, not a part owner as is the shareholder. While
the interest paid on corporate bonds is fully taxable, the interest
on municipal bonds is usually exempt from federal income tax and
state and local taxes within the state of the issue. |
| Book
Value |
An
accounting term. Book value of a stock is determined from a company's
records, by adding all assets then deducting all debts and other
liabilities, plus the liquidation price of any preferred issues.
The sum arrived at is divided by the number of common shares outstanding
and the result is book value per common share. Book value of the
assets of a company or a security may have little relationship to
market value. (see Price/Book
Ratio) |
| 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 a continuing
move in the same direction. Can be used by technical analysts as
a buy or sell indication. |
| Broker |
An
agent who handles the public's orders to buy and sell securities,
commodities or other property. For this service a commission is charged. |
| Brokers'
Loan |
Money
borrowed by brokers from banks or other brokers for a variety of
uses. It may be used by specialists to help finance investments of
stock they deal in; by brokerage firms to finance the underwriting
of new issues of corporate and municipal securities; to help finance
a firm's own investments; and to help finance the purchase of securities
for customers who prefer to use the broker's credit when they buy
securities, also known as "buying on Margin". |
| Bull
Market |
A
condition of the stock market when prices of stocks are generally
rising. |
| Buy
Side |
An
institution who buys services from a broker/dealer, i.e., pays a
commission on the execution of an order. |
| Buyout |
Purchase
of a controlling interest (or percent of shares) of a company's stock.
A leveraged buyout is done with borrowed money. |
