| Accounts Receivable |
A record of money owed to a business from customers for products and/or services. |
| Accrued Expenses |
Business expenses that have not been paid off. Listed on an income statement. |
| After-Hours Trading |
The trading of stocks after major exchanges have closed. |
| Aftermarket |
A type of share that is traded after it was initially offered to the public. |
| Alpha |
A value that reflects the excess of a mutual fund's performance when compared to its expected Beta performance. |
| American Depositary Receipt (ADR) |
A foreign share-bearing certificate that trades on the U.S. stock exchange. |
| Amortization |
An asset's reduced value as determined through proration. |
| Analyst |
Person who forecasts stock earnings and recommends when to buy, hold, and/or sell. |
| Annuity |
(1) Regular income received from an investment. (2) A life insurance contract that issues specific benefits (payments) at a later time, like retirement for example. |
| Arbitrage |
When a person buys the same security at a lower price in one market, and then sells it at a higher price in a different market. |
| Ask Price |
The price at which a stock is offered. See Bid Price |
| Asset Allocation |
A division of funds spread throughout various investments, bonds, and stocks. |
| Average Daily Volume |
The average number of daily trades within specified period of time. |
| Average P/E Ratio |
The average price-to-earnings ratio of mutual fund owned stocks. |
| Back-End Load |
A fee attached to a mutual fund's sale. |
| Backtesting |
A process that evaluates the results of a criteria-specific view. |
| Balance Sheet |
A record of an institution's or person's assets and claims against those assets on any given date (typically the last day of the current fiscal quarter). |
| Basis Points |
Indicates changes in what a bond yields. 1 basis point is equivalent to 0.01 percent, so 20 basis points indicate a .20 percent interest rate yield. |
| Bear Market |
When the majority of stocks in a market lose value. |
| Beta |
A value that reflects a mutual fund's or stock’s unpredictability compared to the S&P 500 Index. |
| Bid Price |
The amount of an offer on a stock that a person is selling. |
| Big Board |
Another name for the New York Stock Exchange (NYSE). |
| Block Trade |
The sale or purchase of stock owning 10,000+ shares. |
| Blue Chips |
Stock in a company that has a stable value and dividends. Blue Chip stocks are generally high price with a low yield. |
| Boiler Room |
Working environment that uses high-pressure and unsound sales tactics. |
| Bond |
A certificate of interest-bearing debt supplied through the government or a corporation. A bond will 'mature' or become due for repayment after the amount of years for which it was purchased. |
| Bond Rating |
Rates a bond's quality. |
| Book to Bill Ratio |
The ratio of a business’ orders to shipments within a specified period. |
| Book Value |
The total value of a company's assets, not counting liabilities and/or intangibles. |
| Bottom Line |
Earnings that are calculated after taxes are paid. |
| Breakout |
The point at which the price of a stock breaks out of a former trading range. The break can be above or below this range. |
| Bulletin Board System |
Lists stocks that for whatever reason, aren't traded in NASDAQ. Not recommended. |
| Bull Market |
A time in which the value of the majority of stocks increase. |
| Buy Side Analyst |
Individual who mutual fund investors consult for financial forecasts and recommendations. |
| Call Option |
Lets investors buy a hundred shares of a particular stock at a preset price. |
| Capital Gains Distribution |
Payments from a fund holder's profits (occurring from stock sales). |
| Capital Lease Obligations |
Describes lease payments that are due throughout a lease. |
| Capitalize |
To furnish with capital from investors and lenders. |
| Capitalization Weighted Index |
A list of the companies that influence index price action. |
| Carry Trade |
Type of trade that uses interest rate differentials as a means to profit from. |
| Cash & Cash Equivalents |
Bank stored money and securities that can be liquidated in 3 months at the most. |
| Cash Flow |
Income that is available after taxes. |
| Charting |
The process of evaluating a stock's price and volume history in order to make sound buy and sell decisions. |
| Chat Room |
A real-time textual communication system for multiple internet users. |
| Closed-End Fund |
A fund in which investors buy from share holders, but sell to other investors. |
| Commission |
Fees paid to brokers for making stock or mutual fund transactions. |
| Commodities |
Tangible goods (minerals, food, animal products). |
| Common Stock |
Publicly held corporation shares that accompany voting rights. |
| Conference Call |
A telephone call simultaneously made to more than one party. |
| Confirmation |
Broker information that explains a stock's or mutual fund's purchase or sale. |
| Consensus Estimate or Rating |
Analyst's earnings, forecasts, and/or buy/sell ratings. |
| Consolidation |
Indicates that a stock's price is within its trading range. Shows no significant movement. |
| Contrarian |
An investor who purposely goes against the status quo. |
| Convertible Bond |
A type of bond that can be converted into stock shares. |
| Cost of Sales |
The total cost of expenses incurred from producing products or services. |
| Coupon Rate |
A bond's interest rate. |
| Current Ratio |
The product of current assets divided by liabilities payable in one year. |
| Days Sales Outstanding |
The number of accounts receivables compared to sales. |
| Debt to Equity (Long Term) |
The product of long term debt divided by shareholder equity. |
| Debt to Equity (Total) |
The product of both short and long term debt divided by shareholder equity. |
| Depreciation |
An asset's decrease in value. |
| Deferred anything |
Expenses that have not been paid. |
| Deferred Income Tax |
Taxes that are due, but have not been paid. |
| Deferred Load |
A fee attached to a mutual fund's sale. |
| Deferred Revenue |
Payments received for services that have not been performed or products that have not been delivered. |
| Diluted Earnings (a.k.a. fully diluted earnings) |
The product of earnings (after taxes) divided by common shares. |
| Direct Stock Purchase Plan (DSP) |
Lets individuals purchase shares, or fractions of shares, directly from a company. |
| Discount |
A bond's face value minus its current market price. |
| Dividends |
Money (or stock) paid to investors. |
| Dividend Reinvestment Plan (DRIP) |
Lets investors gain stock share dividends instead of cash. |
| Derivatives |
Investment items with values that fluctuate with the values of underlying securities. |
| Discount Broker |
Type of stockbroker that doesn't charge as much commission that a full-service broker would charge. The lack of investment advice accounts for lower fees. |
| Dividend Yield |
The product of a year's paid dividends divided by the most current share price. |
| Dogs of the Dow |
A strategy used to pick stocks. It seeks out the stocks that yield the highest dividends in the Dow Jones Industrial Average. |
| Dow Jones Industrial Average |
Lists the 30 largest U.S. corporations. |
| Downtick |
A stock that is traded below the price at which it was previously traded. |
| Downtrend |
Indicates that a stock's price is moving down instead of up. |
| Due Diligence |
A method in which a company's prospects are examined. |
| Dutch Auction |
Allocates IPO shares according to a specified share value and specified quantity of shares. |
| Earnings per Share (EPS) |
The product of a year's earnings (after taxes) divided by the number of outstanding shares. |
| EBIT |
Acronym for Earnings Before Interest and Taxes. |
| EBITDA |
Acronym for Earnings Before Interest, Taxes, Depreciation and Amortization. |
| ECN |
Acronym for electronic trading network. |
| EDGAR |
U.S. Securities & Exchange Commission (SEC) database. Stores corporate reports. |
| Emerging Markets |
Markets existing in developing countries. |
| EPS |
The product of net income divided by the number of outstanding shares. |
| Ex-Dividend |
The 24 hour period after which dividends are paid. |
| Execution |
The completion of a trade. |
| Expense Ratio |
Expenses associated with mutual fund management (operations, marketing, etc.). |
| Extended Hours Trading |
Trades that occur after normal hours. |
| Extraordinary Items |
Charges for extraordinary and rare items. |
| Fair Value |
A stock's real value. Based a user’s own criteria. |
| Fallen Angel |
Describes an IPO that trades in the aftermarket under issue price . |
| Fed (The) |
The Federal Reserve Board. |
| Federal Open Market Committee (FOMC) |
The Federal policy committee regarding monetary affairs. |
| Financials |
All monetary transactions and locations. |
| Fiscal Year |
A 12-month accounting year. |
| Flipping |
Purchasing IPO shares at an issue price only to turn around and sell them at the first opportunity. |
| Float |
Outstanding shares not counting those belonging to insiders, thus available for trading. |
| Forex |
The foreign exchange market. |
| Free Cash Flow |
The difference between operating cash flow and expenses and dividends. |
| Front-End Load |
A mutual funds sales charge (applied when the mutual fund is purchased). |
| Full Service Broker |
Type of stockbroker that administers investment advice and services that aren't available from discount brokers. |
| Fully Diluted |
A number of outstanding shares. |
| Fundamental Analysis |
Investigation of stocks through earnings, sales, profit margins, etc. |
| Fund Family |
A group of company owned mutual funds. |
| Funds From Operations (FFO) |
Measures REIT performance. |
| Future Inflation Gauge |
Predicts inflation's direction for the upcoming 6 to 12 months. |
| Gain-on-sale accounting |
Recorded profits that are based on estimated, current trade profitability. |
| GARP |
(1) Acronym for Growth At a Reasonable Price. (2) Method of purchasing stocks with a price/earnings ratio equal to or less than its estimated growth rate. |
| Generally Accepted Accounting Principles (GAAP) |
Accounting rules and regulations. |
| Geographic Funds |
Geographic specific mutual funds. |
| Good For the Day |
A command to buy or sell for a day (that is, at the trading's close). |
| Good til Canceled |
A command to buy or sell until canceled. |
| Goodwill |
A company's shareholder's equity value that surpasses hard asset value. |
| Green Shoe |
Lets a lead underwriter buy additional IPO shares at an offering price even after IPO trading starts. |
| Gross Margin |
The product of gross profit divided by sales. |
| Gross Profit |
A company's total profit not counting overhead expenses, but subtracting the cost of sales. |
| Growth Stocks |
Stocks that continuously earn annually. Companies with growth stocks have a 15% sales growth (at the very least). |
| Hypothecation |
When assets are used as collateral. |
| Income From Continuing Operations |
|
| Income Statement |
A statement that itemizes a company's or individual's sources of income, income amounts, and expenses during a year or three-month period. |
| Index |
A group of securities that set the standard for measuring investment results. |
| Industry Group |
Related businesses. |
| Initial Public Offering (IPO) |
The first offer of a company's stock to the public. |
| Insiders |
Individuals who own more than 10% of outstanding stock. |
| Insider Ownership |
Insider owned and controlled shares. |
| Insider Trading |
Trading that occurs as a result of information not available to the public. |
| Intangibles |
Intangible assets (intellectual rights, patents, trademarks, etc.) |
| Interest Coverage |
Indicates a company’s competence in paying debt interests. |
| Institutional Ownership |
Pension and mutual funds (and bank) owned shares. |
| Intraday |
Stock trading that is tracked several times a day. |
| Intrinsic Value |
Describes a corporation's real value instead of its stock price value. |
| Inventory |
A company's list of items in stock. |
| Investment Bank |
A stock brokerage firm that makes companies public via IPO, advises for or against mergers and acquisitions, and facilitates corporate borrowing. |
| January Effect |
Stocks that move up in the month of January. |
| Junk Bonds |
Corporate bonds that have bad credit ratings. |
| Large-Cap |
A company valued at more than $8 billion dollars. |
| Lead Underwriter |
The brokerage house that is responsible for IPO. |
| Leveraged Buy Out |
When borrowed monies assume a public corporation. |
| LEAP |
A put or call option that lasts up to three years. |
| Limit Order |
A command to buy stock equal to or less than the limit price or (or to sell stock equal to or higher than the limit price) |
| Liquidity |
The debt paying ability or dollar value of assets. |
| Load |
The sales commission attached to a purchased or sold mutual fund. |
| Lockup Period |
A post-IPO period of time that prohibits insiders from selling shares. |
| Long-Term Investments |
Investments that may not produce an impressive return for a long length of time. |
| Margin |
Borrowed money used to buy stock. Funds are borrowed from a broker. |
| Margin Account |
A brokerage account whose monies can be borrowed to buy securities. |
| Market Capitalization |
The product of the most recent stock price times the number of outstanding shares. |
| Market Maker |
Individual who buys and sells NASDAQ traded stocks and performs off-hours NYSE stock trading on behalf of an investor. |
| Market Order |
A command to buy or sell stock at the current market price. |
| Master Limited Partnership (MLP) |
A mutual fund that is a) invested in multiple industries (instead of just one like REITs are), b) traded on the New York Stock Exchange, and c) pays in dividends. |
| Median Market Cap |
The average market value of a mutual fund's stocks. |
| Message Board |
An internet resource that allows online users to publically exchange text messages. |
| Mid-Cap |
Company stock valued at $2 billion to $7 billion dollars. |
| Model |
Method that selects specific stocks based on criteria with a positive history. |
| Momentum Analysis |
Type of investigation that seeks out uptrend stocks, high growth, and high forecasts. |
| Momentum Stocks |
Describes company stocks that investors hold in high esteem. (High yielding -- fast moving stocks) |
| Money-Center Bank |
Describes the biggest banking companies. |
| Money Supply |
The amount of money that is currently in the public and in bank accounts. |
| Morningstar |
A service that rates mutual funds. |
| Mortgage REIT |
A type of trust that is invested in real estate loans. |
| Most Recent Quarter (MRQ) |
Describes the latest date of a reported fiscal quarter. |
| Moving Average (MA) |
A stock's average closing price within a set amount of time. |
| NASDAQ |
A system in which brokers trade securities. |
| NASDAQ 100 Index |
Lists NASDAQ's 100 largest companies. |
| Net Asset Value |
The price of a mutual fund's share. |
| Net Income |
Income or earnings received after taxes. |
| No Load Mutual Fund |
A fund that does not charge a commission when its shares are directly purchased. Does not apply to broker fees. |
| Non-Operating Expenses |
Expenses that occur outside of a company's basic operations. |
| Non-Operating Income |
Income that occurs outside of a company's basic operations. |
| Normalized Earnings |
A company's expected profits provided there are no write-offs, customer bankruptcies, etc. |
| Open |
Indicates the day's first trade price. |
| Open End Mutual Fund |
A fund from which investors buy and sell shares. |
| Operating Cash Flow |
Extra cash earned through general business operations. |
| Operating Earnings |
The total value of earnings not counting expenses. |
| Operating Income |
The total value of sales not counting expenses. |
| Operating Margin |
The product of dividing operating income by sales. |
| Over-the-Counter-Market |
Describes NASDAQ traded stocks. Also describes Pink Sheet stocks and bulletin board stocks. |
| Payment for Order Flow |
A market maker's complimentary payment to a broker in exchange for stock trade direction. |
| Payout Ratio |
The percentage of earnings issued as dividends. |
| PEG |
The product of a price to earnings ratio divided by a forecasted annual earnings growth rate. |
| Phase 1, Phase 2, & Phase 3 |
FDA drug testing phases. |
| Poison Pill |
An attempt to prevent a company's takeover. |
| Portfolio |
A collection of invested stocks, mutual funds, and securities. |
| Post-Offering Shares |
Outstanding shares occurring after an IPO. |
| Preferred Stock |
A preferred, stable investment that pays out on a regular schedule. |
| Price to Book Ratio (p/b) |
The product of the most recent share price divided by the most recently reported book value. |
| Price to Earnings Ratio (p/e) |
The product of the most recent share price divided by 12-month earnings per share. Used to identify the market's exuberance for a particular business. |
| Price to Sales Ratio (p/s) |
The product of the most recent share price divided by 12-month sales per share. |
| Profit Margin |
The product of earnings (after taxes) divided by the number of sales. |
| Pro Forma Earnings |
Earnings declared without regard to real expenses. |
| Property, Plant and Equipment (PPE) |
Physical assets (buildings, machinery, etc.) |
| Prospectus |
A business plan presented to potential investors. |
| Proxy Statement |
Explains a corporation's executive compensation plans. |
| Put Option |
Allows the sale of 100 company shares at a preset price. |
| Quick Ratio |
The product of current cash and accounts receivables divided by liabilities. |
| Quiet Period |
Time in which everyone participating in an IPO can not discuss a company’s future prospects. Only after a quiet period ends may underwriter-employed analysts recommend buying, holding, and/or selling. |
| Quote |
Data regarding the most recent trade, bid, and prices. |
| Range |
The daily, weekly, or monthly scope of low and high trade prices. |
| Real Estate Investment Trust |
|
| Real-Time Quotes |
Stock trading price reports occurring in real time without delays. |
| Receivables |
|
| Redemption Fee |
A charge for selling a mutual fund under its ordained minimum time. |
| REIT |
(1) Acronym for Real Estate Investment Trust. (2) A mutual fund that is invested in real estate only. |
| Relative Dividend Yield |
A stock's dividend yield compared that of the S&P 500. |
| Relative Strength |
The 12-month performance of a stock price when measured against the S&P 500 or entire market. |
| Research and Development (R&D) |
Company division that studies how and why to develop new products and services (or improve existing products and services). |
| Return on Assets |
The product of income (after taxes are deducted) divided by the total value of assets. |
| Return on Capital (return on invested capital) |
The product of dividing the most recent 12 months of income (after taxes) by the total of the shareholder’s equity and long term liabilities. |
| Return on Equity |
The product of the most recent 12 months of income (after taxes) divided by a shareholder’s equity. |
| Revenues |
Sales income before deductions. |
| Road Show |
An underwriter's or IPO company's effort to generate interest from institutional buyers. |
| Russell 2000 Index |
Lists 3,000 of the largest publicly traded corporations in the US.. |
| S&P 500 |
Lists the U.S.'s 500 largest corporations. |
| Sales |
Income received for goods and services. |
| Sales per Share |
The product of annual sales divided by shares outstanding. |
| Same Store Sales |
Describes the percentage change of a store chain's revenues over time. |
| Screening |
The act of searching for and seeking out specific mutual funds or stocks. |
| Sector Funds |
Industry specific mutual funds. |
| Secular Trend |
A trend that lasts for a long time. |
| Sell Side Analyst |
Individual who brokerage houses consult for financial forecasts and recommendations. |
| Settlement |
The conclusion of paying for stocks or getting credit for stocks purchased. |
| Shareholders Equity |
A company's total assets minus liabilities. |
| Shares outstanding |
The entire number of corporate issued shares. |
| Sharpe Ratio |
Compares a fund’s past performance to current risk. |
| Short Interest |
The number of shares that short sellers borrow. |
| Short Interest Ratio |
The product of short interest divided by average daily volume. |
| Short Sale |
The act of selling unowned stock so that it can be purchased at lower price. |
| Short Squeeze |
When stock prices rise to a point that forces sellers to liquidate. |
| Short-term Debt |
Borrowed funds that are repaid in a year. |
| Short-term Investments |
Quickly liquidated investments. |
| Small Cap |
A business with a market value under a million. |
| Specialist system |
The individual who matches buy and sell orders on the New York and American stock exchange floors. |
| Spider |
(1) Another name for a S&P 500 Depositary Receipt. (2) Type of security traded as stocks, but valued at one-tenth the S&P 500 index. |
| Spread |
The range between the asking price and actual bids for a particular stock. |
| Standard Deviation |
Indicates a mutual fund or a stock’s unpredictability (based on historical performance). |
| Stop Order (Stop Loss) |
An order to sell a stock at market price as soon as it lowers to a specific limit. |
| Stop Limit Order |
A command that combines both the stop order and the limit order (the latter is in effect once stock reaches a stop price). |
| Surprise |
Describes the discrepancy between actual earnings and an earning's forecast. |
| Sweep |
To move funds out of a non interest-earning account into an account that does earn interest. |
| Tangible Book Value |
The difference between book value and intangible assets. |
| Technical Analysis |
An investigation into current stock price and volume history in an effort to determine appropriate transaction decisions. |
| Top |
The point at which a stock's price starts to descend. |
| Top-Line |
Money or income. |
| Total Liabilities |
The sum of all money owed, or total debt. |
| Triple Witching |
The days in which index futures, index future options, and specific stock options end (3rd Friday of March, June, September and December). |
| Trailing Twelve Months (TTM) |
The most recent four quarters that have been reported. |
| Turnover Ratio |
Indicates the frequency that the stocks in a mutual fund's portfolio holdings change. |
| Undervalued |
A stock that is traded below its real or fair value. |
| Underwriter |
An individual who insures new securities. |
| Uptick |
A stock transaction that occurs at a price higher than its preceding transaction. |
| Uptrend |
An upward movement of a stock's price. |
| Value Investor |
An individual who specifically seeks out value priced stocks. |
| Value Stocks |
Company stocks that produce low valuation ratios. |
| Venture Capitalist |
Type of investor who finances the operations of a company prior to publically seeking a percentage of that company's ownership. |
| Volume |
The amount of shares traded in a single day. |
| Watch Portfolio |
A tracked, unowned group of stocks or funds. |
| WEBS (World Equity Benchmark Shares) |
Stock-like trading indexes specific to 17 countries. |
| Whisper Number |
An analyst's interpretation that reflects what the analyst truly believes rather than what he publically declares. |
| Working Capital |
The monetary difference between standing assets and standing liabilities. |
| Yield |
The income or profit occurring from transactions, interest, or dividends. |
| 10-K |
A report that the Securities and Exchange Commission is requires a company to file every year. |
| 10-Q |
A report that the Securities and Exchange Commission is requires a company to file four times a year. |
| 12b-1 Fee |
A marketing fee attached to mutual funds. Charged every year. |
