Glossary

# A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Welcome to Firstrade's stock market glossary. Do all the research you want. Use this glossary to look up any financial term.

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Ladder
A portfolio strategy where an investor creates a portfolio consisting of various fixed-income securities that are approximately the same value, but each with different lengths until maturity. This helps reduce interest rate risk.

Large-Cap Stocks
Stocks issued by companies that are valued at over $5 billion.

Last
The price at which the security last traded.

Level-Load Funds
Funds that charge a fixed 12b-1 fee over the life of the fund, usually 0.75% or 1.00% of a fund's assets.

Liability
An obligation to pay debt owed, or to fulfill a duty or responsibility.

Limit
See Limit Order.

Limit Order
An order instruction which sets the highest price the client is willing to pay for a buy order, or the lowest price the client is willing to accept for a sell order. If the security reaches the price specified by the limit order, the order will be executed at the specified price or possibly better.

Limited Tax Bond
A municipal bond whose ability to pay back principal and interest is based on a special tax.

Limited Trading Authorization
An account where the client gives the power to make trades in his account to another person.

Liquidation
1) Closing out a position, converting assets into cash. 2) Action taken by margin department when a client has not paid for a purchase.

Liquidity
The degree of ease to convert an asset into cash.

Liquidity Ratio
A measure of how much dollar volume is required to move the stock's price up or down one percentage point. A high ratio indicates that relatively heavy trading is required to change its price, while a low liquidity ratio indicates that the stock moves on relatively light volume.

Liquidity Risk
Risk from the difficulty in selling an asset. High liquidity risk could lower the value of the asset.

Listed Options
Options that are traded on a national option exchange.

Listed Securities
Securities that are traded on a national exchange.

Listed Stock
Stock that has met the qualifications for trading on an exchange.

Load
The sales charge assessed upon the initial investment in or redemption of a mutual fund.

Load Fund
A mutual fund with shares sold at a price including a sales charge, usually purchased through a salesperson.

Loan Consent Agreement
The agreement required by the SEC that authorizes a securities broker to lend securities that are in a customer name.

Loan Stock
A stock bearing a fixed rate of interest. Unlike a debenture, loan stocks may be unsecured.

Loan Value
The amount of money the client may borrow from the firm, expressed as a percentage of market value.

Long Position
The state of an investor owning a security.

Long-Term Assets
Value of long term property, equipment and other capital assets minus the depreciation over time.

Long-Term Bond
Bonds that mature in more than ten years.

Long-Term Debt
Liabilities to be paid after 12 months from the date of the last balance sheet.

Long-Term Debt/Capitalization
The ratio of long-term debt as a proportion of the capital available, serves as an indicator of financial leverage. Calculated by dividing long-term debt with the sum of long-term debt, preferred stock and common stockholders' equity.

Long-Term Liabilities
Amount owed for interests, bond repayment, and other debt that are due after one year.

Low
The lowest closing price of a stock over a certain period of time.


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