The fee investors must pay to buy shares in a mutual fund, either paid when shares are purchased or withdrawn. Also known as load.
See Student Loan Marketing Association.
Purchasing one security and selling another of near equal value on the same day.
A registered, non-callable, non-negotiable bond sold at a discount, redeemable at face value upon maturity. Savings bonds can be purchased for $50 up to $10,000, with a maximum of $30,000 each year per individual.
The market where securities are traded after the initial offering.
A company selling additional stock to the market after its initial offering, attempting to raise additional capital.
Mutual funds that focus on investing in a specific industry, these funds have higher risks because of their lack of diversity.
The general term used to describe investment products, including any stock, treasury stock, bond, debenture, etc. Excludes fixed annuities and insurance policies.
Securities and Exchange Commission (SEC)
The primary regulatory federal agency responsible for the enforcement of laws in the securities industry.
Securities Investor Protection Corporation (SIPC)
A non-profit organization established by the Congress consisting of members of the securities industry. Should a member fail, the SIPC insures the securities and cash in customer's accounts up to a maximum of $500,000, including up to $250,000 in cash.
When client incurs a margin or maintenance call and fail to settle the balance by settlement date. The brokerage will sell the securities at the best price available, and hold the client liable for the price and costs.
See Short Sell.
An advanced option strategy that combines the short selling of a stock and the simultaneous selling of a put option on the same underlying stock.
An issue of bonds that matures over a period of years.
All option contracts of the same class that has the same unit of trade, expiration date, and strike price.
The payment and delivery of securities after a trade.
The date on which security transactions are settled. Settlement is generally two business days after the trade.
Settlement Date Inventory
The total of all positions in a security on settlement date.
A person or entity that owns shares in a corporation.
The difference between a company's total assets and total liabilities. Sometimes call net worth or book value, shareholders equity represents the shareholders' ownership of the company. See Price/Book ratio.
Shareholder Services Fee
A fee that the mutual fund pays the fund's sponsor to provide for the sponsor's administrative services.
Shares of common stock that are currently owned by investors.
A program by which a corporation buys back some of its own shares in the open market, reducing the shares outstanding and thus increases earnings and dividends per share, driving up the stock price.
The margin account in which the client has sold short securities.
A short sale that is exempt from the short sale rules, such as converting a convertible preferred and selling the common stock before the stock is received.
A technical analysis of market sentiment, calculated by dividing the total shares sold short of a stock by its average daily trading volume.
A technique used by investors who believe the price of a stock is going down, selling stocks he does not yet own then later buying it back at a lower price to close out the transaction.
The sale of securities that are not owned with the intention to buy it back at a later date at a lower price.
A bond that matures within five years.
Short-Term Bond Funds
Funds that invest in bonds with average maturities of three years or less.
Short-Term Government Bond
A government bond that matures within five years.
See Securities Investor Protection Corporation.
The number of shares available at a given quote.
The difference between estimated transaction costs and actual transaction costs.
Stocks issued by companies that are valued at less than $1 billion. Small-cap stocks can offer high-growth opportunities, but are more risky and pay little dividends, if not none at all.
Small Company Funds
Funds that invest in companies with a market cap of $500 million or less.
Municipal bond which is repaid from taxes collected from those who benefit from the project the bond's proceeds were used to finance.
A member of an exchange who makes a market in certain traded securities.
Selling off a part of an existing firm to form another independent company, through the sale or distribution of new shares.
A mutual fund that holds Treasury securities and other types of investments.
The organizer of a fund, usually also the initial shareholder.
The difference between the bid and ask of a quote.
An advanced options strategy that involves combines the purchase and sale of two puts or two calls on the same underlying security.
A statistical term describing the variations from the average, it measures a fund or portfolio's historical volatility by looking at past returns. The higher the standard deviation, the greater the potential for volatility.
Statement of Additional Information
A document containing additional detailed information not included in a mutual fund's prospectus. It can be obtained by request to the fund company.
Statement of Cash Flows
A financial statement showing a firm's cash receipts payments during a specified period.
A share in the ownership of a company, representing a proportionate claim to the company's earnings and assets.
Refers to a limit order that has not been executed because of other orders at the same limit that were entered earlier.
Payment of dividends in the form of stock rather than cash. The stock could be additional shares of the same company or that of a spun-off subsidiary.
See Shareholder's Equity.
A power of attorney a person the right to transfer ownership of a stock in behalf of the owner.
The exchange of existing shares for more newly issued shares from the same corporation. Splits do not increase or decrease the capitalization of the company, shareholders equity is simply redistribute over more shares, making the price of each individual share cheaper.
Stop Limit Order
Similar to a stop order, but instead of becoming a market order when the price is reached or passed, it becomes a limit order at the specified price.
A stop order to sell set below the current price, mostly used for volatile stocks, so that potential losses are limited if the stock declines rapidly.
A type of order not executed until the specified price has been reached or passed, at which it becomes a market order. In contrast to limit orders, buy stops are entered above the current market price; sell stops are entered below it.
An option strategy involving a simultaneous long or short positions of both put and call option contracts, on the same underlying security and same series designation.
An option strategy that involves writing a call and a put with different strike prices on the same underlying security.
A term describing securities that are registered in the name of a brokerage firm, bank, or depository.
Also known as exercise price, it is the stated price per share at which the underlying asset may be purchased or sold by the option holder upon exercising of the options contract.
Short for Separate Trading of Registered Interest and Principal of Securities, a term traders use for Treasury zeros.
Student Loan Marketing Association
A publicly traded corporation established by the Federal government which buys student loans from colleges and other lenders, pools the loans and sells the pass-through security to investors.
A quote given to show the current market status, not to be taken as a firm ask or bid.
A type of debenture whose claim to interests and principal comes after those of regular debentures and other debt securities.
A stockholder's right to maintain his percentage of ownership in the company, given the opportunity to buy newly issued stock before the general public.
The minimum amount that may be invested in a mutual fund following an initial investment.
Support (Support Level)
A term used in technical analysis, describing a price level which a security has had difficulty falling below.
An abbreviation designated for publicly traded companies, to facilitate identifying the security in exchanges.