Investment Glossary

Welcome to Firstrade’s stock trading terms glossary. Do all the research you want. Use this glossary to look up the definition of any financial term.
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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.


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.


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


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.

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

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.


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.


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