ShortSqueeze.com - Stock Market Glossary

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.

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.

Dictionary, Definitions and Glossary of Terms

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