| In-The-Money |
A call
option is in-the-money if the strike price is less than the
market price of the underlying security. A put
option is in-the-money if the strike price is greater than
the market price of the underlying security. For example, an XYZ call
option with a 52 strike price is in-the-money when XYZ trades
at 52 1/8 or higher. An XYZ put
option with a 52 strike price is in-the-money when XYZ is trading
at 51 7/8 or lower. |
| Income
Bond |
Generally,
income bonds promise to repay principal but to pay interest only
when earned. In some cases unpaid interest on an income bond may
accumulate as a claim against the corporation when the bond becomes
due. An income bond may also be issued in lieu of preferred stock. |
| Income
Statement |
A
report on a company's financial status over a period of time. It
totals profits, subtracts expenses and pinpoints how much money the
company can reinvest. |
| Income
Stock |
Common
stocks that pay large dividends that an investor could use as income. |
| Indenture |
A
written agreement under which bonds and debentures are issued, setting
forth maturity date, interest rate, and other terms. |
| Independent
Broker |
Member
on the trading floor who executes orders for other brokers having
more business at that time than they can handle themselves, or for
firms who do not have their Exchange member on the floor. Formerly
known as two-dollar brokers from the time when these independent
brokers received $2 per hundred shares of executing such orders.
Their fees are paid by the commission brokers. (see Commission
Broker) |
| Index |
A
statistical yardstick expressed in terms of percentages of a base
year or years. For instance, the NYSE Composite Index of all NYSE
common stocks is based on year-end 1965 as 50. An index is not an average. |
| Indicated
Dividend |
Total
amount of dividends that would be paid on a share of stock over the
next 12 months if each dividend were the same amount as the most
recent dividend. Usually represent by the letter 'e' in stock tables.
(see Dividend) |
| Indicated
Yield |
The
yield, based on the most recent quarterly rate times four. To determine
the yield, divide the annual dividend by the price of the stock.
The resulting number is represented as a percentage. (see Yield) |
| Industry |
The
category describing a company's primary business activity. This usually
is determined by the largest portion of revenue. |
| Inflation |
Increase
in the prices for goods and services. |
| Inflation
Rate |
An
important economic indicator. The rate at which prices are rising. |
| Inside
Market |
The
highest bid and the lowest offer prices among all competing Market
Makers in a Nasdaq security, i.e., the best bid and offer prices. |
| Insider
Information |
Relevant
information about a company that has not yet been made public. It
is illegal for holders of this information to make trades based on
it, however received. |
| Institutional
Investor |
An
organization whose primary purpose is to invest its own assets or
those held in trust by it for others. Includes pension funds, investment
companies, insurance companies, insurances and banks. |
| Interest |
Payments
borrowers pay lenders for the use of their money. A corporation pays
interest on its bonds to its bondholders. |
| Interest
Rate |
The
price, calculated as a percentage of the money loaned, that banks
are charging borrowers for the use of the banks' money. |
| Intermarket
Trading System (ITS) |
An
electronic network of U.S. exchanges and NASD broker/dealers. The
ITS system displays quotes of stocks traded on multiple exchanges.
This allows specialists and traders to get the best possible price
of a stock for their customers. |
| Interrogation
Device |
A
computer terminal that provides market information - last sale price,
quotes, volume, etc. - on a screen or paper tape. |
| Intrinsic
Value |
The
dollar amount of the difference between the exercise price of an
option and the current cash value of the underlying security. Intrinsic
value and time value are the two components of an option premium,
or price. |
| Inventory |
For
companies: Raw materials, items available for sale or in the process
of being made ready for sale. They can be individually valued by
several different means, including cost or current market value,
and collectively by FIFO, LIFO or other techniques. The lower value
of alternatives is usually used to preclude overstating earnings
and assets. For security firms: securities bought and held by a broker
or dealer for resale. |
| Inventory
Turnover |
The
ratio of annual sales to inventory. Low turnover is an unhealthy
sign, indicating excess stocks and/or poor sales. |
| Investment |
The
use of money for the purpose of making more money, to gain income
or increase capital, or both. |
| Investment
Banker |
Also
known as an underwriter, the "middleman" between a corporation
issuing new securities and the public. The usual practice is for
one or more investment bankers to buy outright from a corporation
a new issue of stocks or bonds. The group forms a syndicate to sell
the securities to individuals and institutions. Investment bankers
also distribute very large blocks of stock or bonds - perhaps held
by an estate. |
| Investment
Company |
A
company or trust that uses its capital to invest in other companies.
There are two principal types: the closed end and the open end, also
known as a mutual fund. Shares of closed-end investment companies,
most of which are listed on the NYSE, are readily transferable in
the open market and are bought and sold like shares of stock. Capitalization
of these companies remains the same unless action is taken to change,
which is rare. Openend funds sell their own new shares to investors,
stand ready to buy back their old shares, and are not listed. Open-end
funds are so called because their capitalization is not fixed; they
issue more shares as people want them. |
| Investment
Counsel |
One
whose principal business consists of acting as investment adviser
and rendering investment supervisory services. |
| Investment
Portfolio |
A
variety of securities owned by an individual or an institution. |
| Investment
Trust |
A
closed-end fund regulated by the Investment Company Act of 1940.
These funds have a fixed number of shares which are traded on the secondary
markets similarly to corporate stocks. The market price may exceed
the net asset value per share, in which case it is considered at
a "premium". When the market price falls below the NAV/share,
it is at a "discount." Many closed end funds are of a specialized
nature, with the portfolio representing a particular industry, country,
etc. These funds are usually listed on US and foreign exchanges. |
| Investor |
The
owner of a financial asset. |
| IPO |
Initial
Public Offering - A company's first sale of stock to the public.
Securities offered in an IPO are often, but not always, those of
young, small companies seeking outside equity capital and a public
market for their stock. Investors purchasing stock in IPOs generally
must be prepared to accept very large risks for the possibility of
large gains. IPO's by investment companies (closed end funds) usually
contain underwriting fees which represent a load to buyers. |
| IPO
Date |
The
date that the security started publicly trading. |
| IRA |
Individual
Retirement Account. A pension plan with tax advantages, IRA permits
investment through intermediaries like mutual funds, insurance companies
and banks or directly in stocks and bonds through stockbrokers. (see Keogh
Plan) |
| Issue |
Any
of a company's securities, or the act of distributing such securities. |
