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GLOSSARY OF FINANCIAL TERMS AND
INTERNET LINGO (SLANG)

A

  • AFACT: As far as I can tell.
  • AFAIK: As far as I know.
  • AFK: Away From Keyboard.
  • American Depositary Receipt ADR: A security, created by a U.S. bank, that evidences ownership to a specified number of shares of a foreign security held in a depositary in the issuing company's country of domicile. The certificate, transfer, and settlement practices for ADRs are identical to those for U.S. securities. U.S. investors often prefer ADRs to direct purchase of foreign shares because of the ready availability of price information, lower transaction costs, and timely dividend distribution.
  • AMEX: American Stock Exchange
  • AMEX Composite Index - (XAX): The American Stock Exchange introduced a new AMEX Composite Index with a new ticker symbol, XAX, on January 2, 1997. The XAX is a market capitalization-weighted, price appreciation index, and replaces the AMEX Market Value Index (XAM) which, since its inception, has been calculated on a "total return basis" to include the reinvestment of dividends paid by AMEX companies. The new AMEX Composite Index is more comparable with other major indexes, which reflect only the price appreciation of their respective components.
  • American-Style Option: An option contract that may be exercised at any time between the date of purchase and the expiration date. Most exchange-traded options are American- style.
  • Analyst: A person with expertise in evaluating financial investments; he or she performs investment research and makes recommendations to institutional and retail investors to buy, sell, or hold; most analysts specialize in a single industry or business sector.
  • Arbitrage: Arbitrageurs make their living by seizing on price differences for a security that is traded on a different market or in a different form, such as an option or a futures contract. Someone who buys, say, a soybean contract on one market and sells a soybean contract on another exchange is practicing arbitrage by locking in a profit.
  • Ask: The price at which someone who owns a security offers to sell it; also known as the asked price. (See also "Best Ask".)
  • Asset: Any possession that has value in an exchange.
  • Asset Turnover TTM(Trailing Twelve Months): This value is calculated as the Total Revenues for the trailing twelve months divided by the Average Total Assets. The Average Total Assets is defined as the Total Assets for the 5 most recent quarters divided by 5.
  • Assignment: The receipt of an exercise notice by an option writer (seller) that obligates him to sell (in the case of a call) or purchase (in the case of a put) the underlying security at the specified strike price. In other words: Notice to an option writer that an option has been exercised by the option holder.
  • At-The-Money: An option whose strike price is equal/or approximately equal-to the current market price of the underlying security. An option is at-the-money if the strike price of the option is equal to the market price of the underlying security. For example, if XYZ stock is trading at 55, then the XYZ 55 option is at-the-money.
  • Average Diluted Shares Outstanding: This is the number of weighted average shares outstanding for the period.

B

  • Bagger (one, double, triple, quad or more): How many times the price of a stock has multiplied since the purchase.
  • Basis Points: Refers to yield on bonds. Each percentage point of yield in bonds equal 100 basis points. If a bond yield changes from 7.25% to 7.39%, that's a rise of 14 basis points.
  • BB: Bulletin Board.
  • BBIAB: Be Back In A Bit.
  • BBL: Be Back Later.
  • Bear: A person who thinks a stock or market will go lower.
  • Bearish: Looking for a stock or market to go lower.
  • Bear Raid: A situation in which large traders sell positions with the intention of driving prices down.
  • Bellwether Stock: The stock of a company recognized as a leader in its industry. For example, IBM is considered a bellwether stock in the computer field. Often, the fortunes of an industry are reflected in the behavior of its bellwether stocks.
  • Best Ask: The price at which someone who owns a security offers to sell it; also known as the asked price. Please note that the New York Stock Exchange and the American Stock Exchange do not provide Ask information on a delayed basis. (See also "Ask".)
  • Best Bid: The price a prospective buyer is prepared to pay at a particular time for trading a unit of a given security. Please note that the New York Stock Exchange and the American Stock Exchange do not provide Bid information on a delayed basis. (See also "Bid".)
  • Beta: Beta is a measure of a company's common stock price volatility relative to the market.
  • Bid: The price a prospective buyer is prepared to pay at a particular time for trading a unit of a given security. (See also "Best Bid".)
  • Blow-Off Top: A steep and rapid increase in price followed by a steep and rapid drop in price. This is an indicator seen in charts and used in technical analysis of stock price and market trends.
  • Bond: Bonds are debt and are issued for a period of more than one year. The U.S. government, local governments, water districts, companies and many other types of institutions sell bonds. When an investor buys bonds, he or she is lending money. The seller of the bond agrees to repay the principal amount of the loan at a specified time. Interest-bearing bonds pay interest periodically.
  • Book to Bill: Book to bill ratio. It reports on the amount of product that is booked for delivery as compared with those that companies already have billed for.
  • Book Value Per Share ($ per share): This is defined as the Common Shareholder's Equity divided by the total Shares Outstanding
  • Book Value Per Share, MRQ(Most Recent Quarter) ($ per share): This is defined as the Common Shareholder's Equity divided by the Shares Outstanding at the end of the most recent fiscal quarter.
  • Book Value, MRQ(Most Recent Quarter) ($ millions): Also referred to as Common Shareholder's Equity, this is the Total Shareholder's Equity as of the most recent quarterly Balance Sheet minus Preferred Stock and Redeemable Preferred Stock.
  • Box: Computer.
  • BRB: Be Right Back.
  • Breadth: This is one of those technical terms you might hear mentioned in a trading room. It simply demonstrates how broadly a market is moving. When three-quarters of the stocks on the New York Stock Exchange, for example, rise during a given day, an observer might say the stock market had good breadth. Often, observers will measure the number of stocks advancing against the number declining as one way of monitoring breadth.
  • Breakout: A rise in a security's price above a resistance level (commonly its previous high price) or drop below a level of support (commonly the former lowest price). A breakout is taken to signify a continuing move in the same direction. Can be used by technical analysts as a buy or sell indication.
  • BTW: By the way.
  • Bull: A person who thinks a stock or markets are going higher.
  • Bullish: Looking for a stock or the markets to go higher.
  • Business Summary: This field of information will give the investor a brief description of what the company's line of business is. It also gives information regarding the current period revenues and earning vs. the prior periods results.
  • Buyer: The purchaser of an option, either a call option or a put option. Also, referred to as the option holder. An option purchase may be in connection with either an opening or a closing transaction.
  • BW: Business Wire (news service).

C

  • Call: An Option contract that gives the holder the right to buy the underlying security at a specified price for a certain, fixed period of time.
  • Call Option: A call option is what you buy if you think the stock will go up. An option which gives the option buyer the right to purchase (go "long") the underlying security at the strike price on or before the expiration date.
  • Capital Spending, 5 Year Growth Rate (%): This is the compound annual growth rate of Capital Spending over the last 5 years. Capital Spending is the sum of the Capital Expenditure items found on the Statement of Cash Flows.
  • Capped-style Option: A capped option is an option with an established profit cap or cap price. The cap price is equal to the option's strike price plus a cap interval for a call option or the strike price minus a cap interval for a put option. A capped option is automatically exercised when the underlying security closes at or above (for a call) or at or below (for a put) the Option's cap price.
  • Cash & Equivalents: This represents cash and all securities that can readily be transferred into cash as listed in the current assets section.
  • Cash Flow Per Share, ($ per share): Cash Flow is defined as the sum of Income After Taxes minus Preferred Dividends and General Partner Distributions plus Depreciation, Depletion and Amortization.
  • Cash Flow Per Share, TTM(Trailing Twelve Months) ($ per share): This value is the trailing twelve month Cash Flow divided by the trailing twelve month Average Shares Outstanding.
  • Cash From Financing: The sum of all the individual financing activity cash flow line items.
  • Cash From Investing: The sum of all the individual investing activity cash flow line items.
  • Cash From Operations: The sum of all the individual operating activity cash flow line items.
  • Cash Per Share, Quarterly, MRQ(Most Recent Quarter) ($ per share): This is the Total Cash plus Short Term Investments divided by the Shares Outstanding at the end of the most recent fiscal quarter.
  • CEO: Chief Executive Officer.
  • CFO: Chief Financial Officer.
  • Churning: Excessive trading of a clients account in order to increase the broker's commission.
  • CIO: Chief Information Officer
  • Class of Options: Option contracts of the same type (call or put) and Style (American, European or Capped) that cover the same underlying security.
  • Clearing Corporation: The Board of Trade Clearing Corporation, whose function is to clear (match) all purchases and sales and to assure the financial integrity of all futures and options transactions on the Chicago Board of Trade. Once a trade has been cleared, the Clearing Corporation becomes the buyer to every seller and the seller to every buyer.
  • Closed-end Fund: A closed-end fund sells a fixed number of shares to investors. Those shares sell on an exchange and vary in price, depending on demand for the fund. A fund's shares, for example, can trade below their net asset value or above their net asset value - depending on investors' demand for the shares. Country funds that represent shares in a specific country or region, such as Italy or France, are often closed-end funds.
  • Closing Purchase: A purchase or sale that liquidates-offsets-an existing position. That is, selling an option that was previously purchased or buying back an option which was previously sold. A transaction in which the purchaser's intention is to reduce or eliminate a short position in a given series of options.
  • Closing Sale: A transaction in which the seller's intention is to reduce or eliminate a long position in a given series of options.
  • Combination: A position created either by purchasing both a put and a call or by writing both a put and a call on the same underlying security.
  • Commodity: A commodity is food, a metal or another physical substance that investors buy or sell, usually via futures contracts.
  • Common Dividends Per Share: This is the Common Stock Cash Dividends Per Share for the selected time period.
  • Common Shares: These are securities that represent equity ownership in a company. Common shares let an investor vote on such matters as the election of directors. They also give the holder a share in a company's profits via dividend payments or the capital appreciation of the security.
  • Confidence Indicator: A measure of investors' faith in the economy and the securities market. A low or deteriorating level of confidence is considered by many technical analysts as a bearish sign.
  • Consumer Price Index: The CPI, as it is called, measures the prices of consumer goods and services and is a measure of the pace of U.S. inflation. The U.S. Department of Labor publishes the CPI every month.
  • Convergence: The movement of the price of a future contract toward the price of the underlying cash commodity. At the start, the contract price is higher because of the time value. But as the contract nears expiration, the futures price and the cash price converge.
  • COO: Chief Operation Officer.
  • Corner A Market: To purchase enough of the available supply of a commodity or stock in order to manipulate its price.
  • Cost Of Goods Sold: Also called the Cost of Revenue, this is the cost of all raw materials plus the work in process and the cost of producing the finished goods.
  • Covered Call OptionWriting: A strategy in which one sells call options while simultaneously owning an equivalent position in the underlying security or strategy in which one sells put options and simultaneously is short an equivalent position in the underlying security.
  • Current Ratio MRQ(Most Recent Quarter): This is the ratio of Total Current Assets for the most recent quarter divided by Total Current Liabilities for the same period.
  • CYA: See you later.
  • Cyclical Stock: The stock of a company whose fortunes are closely tied to the cyclical ups and downs of the economy in general. For example, General Motors is a cyclical stock since its business of selling autos is highly dependent on a robust economy with its attendant high levels of employment, rising personal incomes, etc.

D

  • Day Order: An order to buy or sell stock that automatically expires if it can't be executed on the day it is entered.
  • DCC: Start a chat or send a file.
  • DD: Due Diligence.
  • Debenture: The common type of bond issued by large, well-established organizations. Holders of debentures representing corporate indebtedness are creditors of the corporation and entitled to payment before shareholders upon dissolution of the corporation.
  • Debt to Equity Ratio: Long-term debt divided by shareholders' equity, showing relationship between long-term funds provided by creditors and funds provided by shareholders; high ratio may indicate high risk, low ratio may indicate low risk.
  • Depreciation: This reflects the depreciation for all capital goods.
  • Derivative Security: A financial security whose value is determined in part from the value and characteristics of another security, the underlying security.
  • Devaluation: A lowering of a country's currency relative to gold and/or currencies of other nations. The opposite is revaluation.
  • Diluted Shares: This is the number of shares of Common stock that would be outstanding if all convertible securities, warrents and options were converted to Common.
  • Discount Rate: This is the interest rate charged by the U.S. Federal Reserve, the nation's central bank, for loans to member banks. The Fed, as it is called, alters rates to increase or decrease the growth of the nation's economic output.
  • Divergence: When two or more averages or indices fail to show confirming trends.
  • Dividend: Distribution of earnings to shareholders, prorated by the class of security and paid in the form of money, stock, scrip, or, rarely, company products or property. The amount is decided by the Board of Directors and is usually paid quarterly. Mutual fund dividends are paid out of income, usually on a quarterly basis from the fund's investments.
  • Dividend Declared, Last Quarterly ($ per share): This is the amount of the last quarterly dividend, if one has been declared by the company.
  • Dividend Ex-date, Last Quarterly: This is the first date on which a person purchasing the stock is no longer eligible to receive the last announced dividend. If a prospective dividend payment has been announced, this may be a future date. The format for this variable is MM/DD/YY (12/31/98).
  • Dividend Rate ($ per share): This value is the total of the expected dividend payments over the next twelve months. It is generally the most recent cash dividend paid or declared multiplied by the dividend payment frequency, plus any recurring extra dividends.
  • Dividend Yield (%): This value is the current percentage dividend yield based on the present cash dividend rate. It is calculated as the Indicated Annual Dividend divided by the current Price, multiplied by 100.
  • Double(r): Stock thats price has doubled since a given time.
  • Dow Jones Industrial Average - DJIA: The Dow Jones Industrial Average index - (DJIA) is a price-weighted average of 30 actively traded blue chip stocks, primarily industrials but including American Express Co. and American Telephone and Telegraph Co. Prepared and published by Dow Jones & co., it is the oldest and most widely quoted of all the market indicators. The components, which change from time to time, represent between 15% and 20% of the market value of NYSE stocks. The DJIA is calculated by adding the closing prices of the component stocks and using a divisor that is adjusted for splits and stock dividends equal to 10% or more of the market value of an issue as well as substitutions and mergers. The average is quoted in points, not in dollars.
  • DT: Down tick in the price of a stock, Price is falling. Our Day Trading.
  • Due Diligence: Research the fundamentals of a stock.
  • DYODD: Do your own due diligence.

E

  • E2EG: Ear-to-ear grin.
  • EBITDA: Earnings before interest, taxes, depreciation, and amortization.
  • Earnings Per Share-(EPS): EPS represents the portion of a company's profit allocated to each outstanding share of common stock. Net income (reported or estimated) for a period of time is divided by the total number of shares outstanding (TSO) during that period.
  • EOD: End of day.
  • EOM: End of Month or End of Message.
  • Equity: This field starts off with the company's leading class of stock, and then proceeds to give insiders control, institutional ownership, IPO, and debt information.
  • Equity Options: Options on shares of an individual common stock.
  • ERR: Growl or getting mad.
  • European-style Options: An option contract that may be exercised only during a specified period of time just prior to its expiration.
  • Exchange: This is a four character field indicating the primary trading market for the company's common stock. The following are the valid codes:

    NYSE = New York Stock Exchange
    AMEX = American Stock Exchange
    NASD = Nasdaq Market
    OTC = Pink Sheet or OTC Bulletin Board

  • Exercise: The Action taken by the holder of a call if he wishes to purchase the underlying security or by the holder of a put if he wishes to sell the underlying security. To implement the right under which the holder of an option is entitled to buy (in the case of a call) or sell (in the case of a put) the underlying security.
  • Exercise Price: The price at which the holder of a call (put) may exercise their right to purchase (put) the underlying security.
  • Exercise Settlement Amount: The difference between the exercise price of the option and the exercise settlement value of the index on the day an exercise notice is tendered, multiplied by the index multiplier.
  • Expiration: The date after which an option may no longer be exercised, ceases to exist (expires). In most cases, the expiration date is the market close on the Friday before the third Saturday of the month.
  • Expiration Cycle: An expiration cycle relates to the dates on which options on a particular underlying security expire. A near term option will be placed in 1 of 3 cycles, which will be equal to the current month followed by the next two months. A given option will be placed in 1 of 4 cycles, other than LEAPSŪ, will be assigned to one of four cycles, the January cycle, the April cycle or the July cycle and the October cycle. An expiration cycle relates to the dates on which options on a particular security expire. At any point in time, an option will have contracts with 4 expiration dates outstanding, 2 in near-term months and 2 in far-term months.
  • Expiration Date: The last day (in the case of American-style) or the only day (in the case of European-style) on which an option may be exercised. For stock options, this date is the Saturday immediately following the 3rd Friday of the expiration month; however, brokerage firms may set an earlier deadline for notification of an option holder's intention to exercise. If Friday is a holiday, the last trading day will be the preceding Thursday.
  • Expiration Time: The time of day by which all exercise notices must be received on the expiration date.

F

  • FAQ: Frequently asked questions.
  • Federal Funds Rate: This is the interest rate that banks with excess reserves at a Federal Reserve district bank charge other banks that need overnight loans. The Fed Funds rate, as it is called, often points to the direction of U.S. interest rates.
  • Fire: Stock that is hot, rising fast.
  • Flex Options: Exchange traded equity or index options, where the investor can specify within certain limits, the terms of the options, such as exercise price, expiration date, exercise type, and settlement calculation.
  • Float: This is the number of freely traded shares in the hands of the public. Float is calculated as Shares Outstanding minus Shares Owned by Insiders, 5% Owners, and Rule 144 Shares.
  • Free Cash Flow, Annual: This value is calculated from the most recent annual Statement of Cash Flows. It is calculated as Cash From Operations minus Capital Expenditures and Dividends Paid.
  • Free Cash Flow Per Share, TTM(Trailing Twelve Months) ($ per share): This is the trailing twelve month Free Cash Flow divided by the trailing twelve month Average Shares Outstanding found on the Income Statement.
  • Front Running: People own the stock then promote it while selling.
  • FS: Forward split.
  • Futures Contract: This is an agreement that allows an investor to buy or sell a commodity, like gold or wheat, or a financial instrument, like a currency, at some time in future. A future is part of a class of securities called derivatives, so named because such securities derive their value from the worth of an underlying investment.
  • FWTW: For what it's worth.
  • FYI: For your information.

G

  • GAAP (General Accepted Accounting Principles): Conventions, rules and procedures that define general accounting practice, including broad guidelines as well as detailed procedures.
  • GAL: Get a life.
  • Gapper, Gapping, Gapolla: Stock that moves from its previous closing price before the market opens.
  • GMTA: Great minds think alike.
  • Gold - GOX: The CBOE Gold Index - (GOX) is an equal-dollar- weighted index composed of 10 companies involved primarily in gold mining and production. The index is re-balanced after the close of business on expiration Friday on the March quarterly cycle.
  • Gross Margin, 5 Year Average (%): This value is calculated by first determining the Gross Margin for each of the 5 most recent fiscal years and then averaging the values. Gross Margin is Total Revenue minus Cost of Goods Sold divided by Total Revenue and is expressed as a percentage.
  • Gross Margin, TTM(Trailing Twelve Month) (%): This value measures the percent of revenue left after paying all direct production expenses. It is calculated as the trailing 12 months Total Revenue minus the trailing 12 months Cost of Goods Sold divided by the trailing 12 months Total Revenue and multiplied by 100.
  • GUI: Graphical User Interface (What you see when using software).

H

  • Head & Shoulders: In technical analysis, a chart formation in which a stock price reaches a peak and declines, rises above its former peak and again declines and rises again but not to the second peak and then again declines. The first and third peaks are shoulders, while the second peak is the formation's head. Technical analysts generally consider a head & shoulders formation to be a very bearish indication.
  • Head Fake: Stock Price heading up or down contrary to ones opinion.
  • Hedge: The buying or selling of offsetting positions in order to provide protection against an adverse change in price. A hedge may involve having positions in the cash market, the futures market and/or options. A conservative strategy used to limit investment loss by effecting a transaction which offsets an existing position.
  • Hedged Portfolio: A portfolio consisting of the long position in the stock and the short position in the call option, so as to be riskless and produce a return that equals the risk-free interest rate.
  • Hedging: A strategy designed to reduce investment risk using call options, put options, short selling, or futures contracts. A hedge can help lock in existing profits. Its purpose is to reduce the volatility of a portfolio, by reducing the risk of loss.
  • Holder: The purchaser of an option.
  • HTH: Hope this helps, or Hope that helps.

I

  • IMHO: In My Honest Opinion, In My Humble Opinion.
  • IMO: In My Opinion.
  • Income After Taxes: Also known as After Tax Income for the most recent quarter, this is the money remaining after all expenses and taxes have been paid, but before any adjustments have been made.
  • Income Before Taxes: Also known as Pretax Income and Earnings Before Taxes, this is Total Revenue minus Total Expenses plus Non-operating Income (Expenses).
  • Income for Primary/Basic EPS (Earnings Per Share): This is the dollar amount accruing to common shareholders for dividends and retained earnings. Income Available to Common Shareholders is calculated as Income After Taxes plus Minority Interest and Equity in Affiliates plus Preferred Dividends, General Partner Distributions and US GAAP Adjustments.
  • Indicated Annual Dividend ($): This value is the total of the expected dividend payments over the next twelve months. It is generally the most recent cash dividend paid or declared multiplied by the dividend payment frequency, plus any recurring extra dividend.
  • Initial Public Offering (IPO): An IPO is stock in a company that is being traded on an exchange for the first time. Investors first read a prospectus that describes the potential of the company and the risks of investing in it.
  • Insiders: These are directors and senior officers of a corporation -- in effect those who have access to inside information about a company. An insider also is someone who owns more than 10 percent of the voting shares of a company.
  • Interest Expense: This is the Total Operating and Non-Operating Interest Expense.
  • In-The-Money: A call option is in-the-money if the strike price is less than the market price of the underlying security. A put option is in-the-money if the strike price is greater than the market price of the underlying security. For example, if the March COMEX silver futures contract is trading at $6 an ounce, a March call with a strike price of $5.50 would be considered in-the-money by $0.50 an ounce.
  • Intrinsic Value: The amount by which an option is in-the- money (see above definition). An option which is not in-the- money has no intrinsic value.
  • Inventories: This consists of direct materials, work-in-process, and finished goods ready for sale.
  • Inventory Turnover, TTM(Trailing Twelve Months): This value measures how quickly the Inventory is sold. It is defined as Cost of Goods Sold for the trailing twelve months divided by Average Inventory. Average Inventory is calculated by adding the inventory for the 5 most recent quarters and dividing by 5.
  • IOW: In Other Words.
  • IPO: Initial Public Offering.
  • IRC: Internet Relay Chat (Network for live chat).
  • IRL: In Real Life.
  • Issue: A particular financial asset.

J

  • Junk Bond: A bond with a speculative credit rating of BB or lower is a junk bond. Such bonds offer investors higher yields than bonds of financially sound companies. Two agencies, Standard & Poors and Moody's Investor Services, provide the rating systems for companies' credit.

L

  • Lagged, Lagg: Long delay between sending and receiving data over the Internet.
  • LEAPSŪ: Long-term Equity Anticipation Securities, or LEAPSŪ, are long-term stock or index options. LEAPSŪ, like all options, are available in two types, calls and puts, with expiration dates up to three years in the future.
  • Limit Order: Investors can place an order to buy or sell securities at a set price. The trade can take place only at that price or a better one.
  • LOL: Laugh out loud or Laughing out loud.
  • Long: One who has bought a contract(s) to establish a market position and who has not yet closed out this position through an offsetting sale; the opposite of short. Also an investor that owns the security is said to be long the stock.
  • Long Position: A position wherein an investor's interest in a particular series of options is as a net holder (i.e., the number of contracts bought exceeds the number of contracts sold). Also an investor that owns the security is said to be long the stock.
  • Long Term Gain: A gain on the sale of a capital asset where the holding period was twelve months or more and the profit was subject to the long term capital gains tax.

M

  • Margin: The sum of the money which must be deposited, and maintained, in order to provide protection to both parties to a trade. The Exchange establishes minimum margin amounts. Brokerage firms often require margin deposits that exceed Exchange minimums. In turn, they post and maintain customer margin with the Clearing Corporation. Buyers of options do not have to post margin since their risk is limited to the option premium. This allows investors to buy securities by borrowing money from a broker. The margin is the difference between the market value of a stock and the loan a broker makes.
  • Margin Calls: Additional funds which the investor may be called upon to deposit if there is an adverse price change or if margin requirements are increased. Buyers of options are not subject to margin calls.
  • Margin Requirement (for Options): The amount an uncovered (naked) option writer is required to deposit and maintain to cover a position. The margin requirement is calculated daily.
  • Market Capitalization (MCAP): Price per share multiplied by the total number of shares outstanding; also the market's total valuation of a public company.
  • Market Makers or MM: The NASD member firms that use their own capital, research, retail and/or systems resources to represent a stock and compete with each other to buy and sell the stocks they represent. There are over 500 member firms that act as Nasdaq Market Makers. One of the major differences between The Nasdaq Stock Market and other major markets in the U.S. is Nasdaq's structure of competing Market Makers. Each Market Maker competes for customer order flow by displaying buy and sell quotations for a guaranteed number of shares. Once an order is received, the Market Maker will immediately purchase for or sell from its own inventory, or seek the other side of the trade until it is executed, often in a matter of seconds.
  • Market Order: A Market Order is an order to buy or sell a stock at the market's current best displayed price.
  • Market Value: The market price; the price at which buyers and sellers trade similar items in an open marketplace. The current market price of a security as indicated by the latest trade recorded.
  • Maturity Date: The date on which the principal amount of a bond is to be paid in full.
  • MB: Message Board.
  • Mean: The mathematical average of a range of numbers (calculated by dividing the sum total of all the items in the range by the total number of items in the range).
  • Median: The middle number in a defined distribution; when looking at estimates, median refers to the estimate above and below which lie an equal number of estimates for the period indicated.
  • MIRC: Internet Chat Program.
  • MOMO: Momentum stock, lots of interest and buyers for hours, days or weeks.
  • Money Market Fund: Open-ended mutual fund that invests in commercial paper, banker's acceptances, repurchase agreements, government securities, certificates of deposit, and other highly liquid and safe securities, and pays money market rates of interest. The fund's net asset value remains a constant $1 a share, only the interest rate goes up or down.
  • Moving Average: Moving Average is a technique to filter out noise and to uncover trends. The average is calculated by adding a set of data, then dividing the sum by the period. The result is a smoothed version of a trend. A reversal in trend is identified when the price crosses the Moving Average line (a crossover). The longer the Moving Average time span, the more significant the crossover signal. A price line that penetrates a 20 day MA is not as significant as one that penetrates a 200 day MA. To confirm a valid crossover many traders wait for the penetration to reach a predetermined percentage of price, or number of days. Although many different time periods are commonly used, 20 days is appropriate for short-term trading, 50 days for intermediate term trading and 200 days for long term trading.
  • Municipal Bond: State or local government offer muni bonds, as they are called, to pay for special projects such as highways or sewers. The interest that investors receive is exempt from some income taxes.
  • Mutual Fund: Fund operated by an investment company that raises money from shareholders and invests it in stocks, bonds, options, commodities or money market securities.

N

  • Naked Option Strategies: An unhedged strategy making exclusive use of one of the following: Long call strategy (buying call options ), short call strategy (selling or writing call options), Long put strategy (buying put options ), and short put strategy (selling or writing put options). By themselves, these positions are called naked strategies because they do not involve an offsetting or risk-reducing position in another option or the underlying security.
  • Naked Strategies: When you write an option without owning the underlying asset. You are naked because often you agreed to sell something that you do not own.
  • Naked Writer: Writing a call or a put on a security in which the writer has no opposite cash or security position. This is also known as uncovered writing.
  • Nasdaq: The Natinal Association of Securities Dealers Automated Quotation. A system designed to give automatic quotes on stocks normally via a computer.
  • Nasdaq Composite Index - Listed Companies in this Index: The Nasdaq Composite Index measures all Nasdaq domestic and non-U.S. based common stocks listed on The Nasdaq Stock Market. The Index is market-value weighted. This means that each company's security affects the Index in proportion to it's market value. The market value, the last sale price multiplied by total shares outstanding, is calculated throughout the trading day, and is related to the total value of the Index.
  • Nasdaq National Market Securities (NMS): The Nasdaq National Market consists of over 3,000 companies that have a national or international shareholder base, have applied for listing, meet stringent financial requirements and agree to specific corporate governance standards. To list initially, companies are required to have significant net tangible assets or operating income, a minimum public float of 500,000 shares, at least 400 shareholders, and a bid price of at least $5. The Nasdaq National Market operates from 9:30 A.M. to 4:00 P.M. EST, with extended trading in SelectNet from 8:00 A.M. to 9:30 A.M. EST and from 4:00 P.M. and 5:15 P.M. EST.
  • Nasdaq SmallCap Market Securities: The Nasdaq SmallCap Market comprises of over 1,400 companies that want the sponsorship of Market Makers, have applied for listing and meet specific and financial requirements. Once a company is approved and listed on this market, Market Makers are able to quote and trade the company's securities through a sophisticated electronic trading and surveillance system. The Nasdaq SmallCap Market operates from 9:30 A.M. to 4:00 P.M. EST., with extended trading in SelectNet from 8:00 A.M. to 9:30 A.M. EST and from between 4:00 P.M. and 5:15 P.M. EST.
  • Nasdaq-100 Index - List Companies in this Index: The Nasdaq-100 Index includes 100 of the largest non-financial domestic companies listed on the Nasdaq National Market tier of The Nasdaq Stock Market. Launched in January 1985, each security in the Index is proportionately represented by its market capitalization in relation to the total market value of the Index. The Index reflects Nasdaq's largest growth companies across major industry groups. All index components have a minimum market capitalization of $500 million, and an average daily trading volume of at least 100,000 shares.
  • National Association of Securities Dealers, Inc. NASD: The self-regulatory organization of the securities industry responsible for the regulation of The Nasdaq Stock Market and the over-the-counter markets. The NASD operates under the authority granted it by the 1938 Maloney Act Amendment to the Securities Exchange Act of 1934.
  • Net Asset Value (NAV): The market value of a fund share, synonymous with a bid price. In the case of no-load funds, the NAV, market price, and offering price are all the same figure, which the public pays to buy shares; load fund market or offer prices are quoted after adding the sales charge to the net asset value. NAV is calculated by most funds after the close of the exchanges each day by taking the closing market value of all securities owned plus all other assets such as cash, subtracting all liabilities, then dividing the result (total net assets) by the total number of shares outstanding. The number of shares outstanding can vary each day depending on the number of purchases and redemptions.
  • Net Change: The difference between today's last trade and the previous day's last trade. The difference between today's closing Net Asset Value (NAV) and the previous day's closing Net Asset Value (NAV).
  • Net Income: Income after all expenses and taxes have been deducted, and used in calculating a variety of profitability and stock performance measures.
  • Net Profit Margin, TTM(Trailing Twelve Months) (%): Also known as Return on Sales, this value is the Income After Taxes for the trailing twelve months divided by Total Revenue for the same period and is expressed as a percentage.
  • Net Revenue: This is the sum of all revenue (sales) reported for all operating divisions.
  • NEWBEE: New user of Internet and/or computer.
  • NYSE: New York Stock Exchange
  • NYSE Composite Index - NYSE: The NYSE Composite Index - (NYSE) is a market value-weighted index which relates all NYSE stocks to an aggregate market value as of Dec. 31, 1965, adjusted for capitalization changes. The base value of the index is $50 and point changes are expressed in dollars and cents.
  • NICK: Name used by people (Individual) on the Internet.
  • No Load Fund: Mutual Fund offered by an open end investment company that imposes no sales charge (load) on its shareholders. Investors buy shares in no-load funds directly from the fund companies, rather than through a broker as is done in load funds. Many no-load fund families allow switching of assets between stock, bond, and money market funds. The listing of the price of a no-load fund in the newspaper is accompanied by the designation NL. The net asset value, market price and offer prices of this type of fund are exactly the same, since there is no sales charge.
  • NUKE: "Denial of Service Attack" that will crash your computer forcing you to reboot.

O

  • OFFER: Current price a stock may be readily bought for.
  • OT: Off Topic, used on message boards when the post is not on the threads subject.
  • Open-End Mutual Fund: A fund that sells its shares at net asset value is an open-end fund. It creates shares as investors demand them. Investors buy the shares at their market price. Most mutual funds are open-end funds. Those that aren't are closed-end funds that sell a fixed number of shares to investors.
  • Opening Purchase: A transaction in which the purchaser's intention is to create or increase a long position in a given series of options.
  • Opening Sale: A transaction in which the seller's intention is to create or increase a short position in a given series of options.
  • Open Interest: The number of outstanding option contracts in the exchange market or in a particular class or series.
  • Open Order: An order to buy or sell a security that remains in effect until it is either canceled by the customer or executed.
  • Option: An instrument that gives the owner the right to buy or sell a specified number of shares of a specified stock at a specified price within a specified period of time. Gives the buyer the right, but not the obligation, to buy or sell an asset at a set price on or before a given date. Investors, not companies, issue options. Buyers of put options bet the stock's price will go down below the price set by the option. An option is part of a class of securities called derivatives, so named because these securities derive their value from the worth of an underlying investment.
  • Option Adjusted Spread (OAS): (1) The spread over an issuer's spot rate curve, developed as a measure of the yield spread that can be used to convert dollar differences between theoretical value and market price. (2) The cost of the implied call embedded in a MBS, defined as additional basis-yield spread. When added to the base yield spread of an MBS without an operative call produces the option-adjusted spread.
  • Option Clearing Corporation (OCC): The issuer of standardized options traded on exchanges. OCC is owned by the options markets.
  • Option Contract: A contract that, in exchange for the option price, gives the option buyer the right, but not the obligation, to buy (or sell) a financial asset at the exercise price from (or to) the option seller within a specified time period, or on a specified date (expiration date).
  • Option Contract Multiple: A constant, set at $100, which when multiplied by the cash index value gives the dollar value of the stock index underlying an option. That is, dollar value of the underlying stock index = cash index value x $100 (the options contract multiple).
  • Option Elasticity: The percentage increase in an option's value given a 1% change in the value of the underlying security.
  • Option Not To Deliver: In the mortgage pipeline, an additional hedge placed in tandem with the forward or substitute sale.
  • Option On Physicals: Interest rate options written on fixed- income securities, as opposed to those written on interest rate futures contracts.
  • Option Premium: The option price over the "in the money" total. If not in the money the entire option cost is the premium.
  • Option Price: The price paid by the buyer of the options contract for the right to buy or sell a security at a specified price in the future. Includes any "in-the-money" plus the writers charge (premium).
  • Option Prices Reporting Authority (OPRA) : A joint industry plan that disseminates inside quotations and last sale data for options.
  • Option Seller: Also called the option writer, the party who grants a right to trade a security at a given price in the future.
  • OEM: Original Equipment Manufacturer.
  • Out-Of-The-Money: A call option is out-of-the-money if the strike price is greater than the market price of the underlying security. A put option is out-of-the-money if the strike price is less than the market price of the underlying security.
  • Over-The-Counter : The O-T-C market is for securities not carried on a listed stock exchange.

P

  • PPL: People.
  • PIC: Picture.
  • Pivot: Price level established as being significant by market's failure to penetrate or as being significant when a sudden increase in volume accompanies the move through the price level.
  • POINT: Dollar or Stick.
  • Preferred Shares: Preferred shares give investors a fixed dividend from the company's earnings. And more importantly: preferred shareholders get paid before common shareholders in the event of a bankrupcy or liquidation of assets.
  • Premium: Is the amount the seller is charging you for the option over and above any "in-the-money" value. The price of an option, the sum of money arrived at in the competitive market, which the option buyer pays and the option writer receives for the rights granted by the option.
  • P/B Ratio (Price/Book Ratio): A stock analysis statistic in which the price of a stock is divided by the reported book value (as of the date specified).
  • P/C Ratio (Price/Cash Flow Ratio): A financial ratio that compares stock price with cash flow from operations per outstanding shares.
  • P/E Ratio (Price/Earnings Ratio): A stock analysis statistic in which the current price of a stock is divided by the reported actual (or sometimes projected, which would be forecast) earnings per share of the issuing firm; it is also called the "multiple".
  • P/S Ratio (Price/Sales Ratio): A financial ratio that compares stock price with sales per share (or market value with total revenue).
  • Prime Rate: The interest rate banks charge, determined by market forces affecting a bank's cost of funds and the rates the borrowers will accept. This rate tends to become standard for the banking industry when a major bank raises or lowers its rate.
  • PRN: PRNewswire (news service).
  • PM: Private message.
  • PD: Pump and Dump. Front running, people own the stock then promote it while selling.
  • Put: An option granting the right to sell the underlying futures contract. Opposite of a call.
  • Put An Option: To exercise a put option.
  • Put Option: A put option is what you buy if you think the stock is going down in price. An option which gives the option buyer the right to sell (go short) the underlying security at the stike price on or before the expiration date.
  • Put Price: The price at which the asset will be sold if a put option is exercised. Also called the strike or exercise price of a put option.
  • Put Provision: Gives the holder of a floating-rate bond the right to redeem his note at par on the coupon payment date.
  • Put Swaption: A financial tool in which the buyer has the right, or option, to enter into a swap as a floating-rate payer. The writer of the swaption therefore becomes the floating-rate receiver/fixed-rate payer.

Q

  • Quarterly Report (10 Q): A report, which public companies are required to file quarterly with the SEC, that provides unaudited financial information and other selected material.
  • Quick Ratio (MRQ(Most Recent Quarter): Also known as the Acid Test Ratio, this ratio is defined as Cash plus Short Term Investments plus Accounts Receivable for the most recent fiscal quarter divided by the Total Current Liabilities for the same period.

R

  • Real-time Trade Reporting: A requirement imposed on Market Makers (and in some instances, non-Market Makers) to report each trade immediately after completion of the transaction. Stocks traded on The Nasdaq Stock Market are subject to real-time trade reporting within 90 seconds of execution.
  • Receivable Turnover, TTM(Trailing Twelve Months): This is the ratio of Total Revenue for the trailing twelve months divided by Average Accounts Receivables. Average Receivables is calculated by adding the Accounts Receivables for the 5 most recent quarters and dividing by 5.
  • Receivables: This represents money owed to the company by customers for goods sold or services rendered, but not yet collected. This includes the trade receivables, finance receivables, and sales receivables.
  • Relative Strength: By graphing the stock price divided by the S&P 500, you can see the performance of the stock compared to the general market. A rising RS line means the security is outperforming the market, and the opposite is true of a declining RS line. Relative strength typically peaks before price. Therefore it is a good indicator of trend reversals. When both price and RS reach new highs in concert it is a sign of unusual strength.
  • Reloading: To buy again or to enter in the order for a buy or sell in the browser window but not yet hitting the send button so as to be prepared for news or movement.
  • Retained Earnings: Net profits kept to accumulate in a business after dividends are paid.
  • Retracement: A price movement in the opposite direction of the previous trend.
  • Return of Capital: A distribution of cash resulting from depreciation tax savings, the sale of a capital asset or of securities in a portfolio, or any other transaction unrelated to retained earnings.
  • Return on Equity: (net income divided by shareholders' equity) a measure of the net income that a firm is able to earn as a percent of stockholders' investment.
  • Return on Total Assets: (net income divided by total net assets) a measure of the net income that a firm's management is able to earn with the firm's total assets.
  • ROFL: Rolling on Floor Laughing.
  • ROFLMAO: Rolling on the floor laughing my a** off.

S

  • Sales (Revenue) Per Share, TTM(Trailing Twelve Months) ($ per share): This value is the trailing twelve month Total Revenue divided by the Average Diluted Shares Outstanding for the trailing twelve months.
  • SCALP(S): A quick trade for a 1/16 or more.
  • Secondary Market: A market that provides for the purchase or sale of previously sold or bought options through closing transactions.
  • Securities and Exchange Commission SEC: The federal agency created by the Securities Exchange Act of 1934 to administer that act and the Securities Act of 1933. The statutes administered by the SEC are designed to promote full public disclosure and protect the investing public against fraudulent and manipulative practices in the securities markets. Generally, most issues of securities offered in interstate commerce or through the mails must be registered with the SEC.
  • Seller: Also known as the option writer or grantor. The sale of an option may be in connection with either an opening transaction or a closing transaction.
  • Series: Options: All option contracts of the same class that also have the same unit of trade, expiration date, and exercise price. Stocks: shares which have common characteristics, such as rights to ownership and voting, dividends, par value, etc. In the case of many foreign shares, one series may be owned only by citizens of the country in which the stock is registered.
  • Settlement Date: The date specified for delivery of securities between securities firms, usually three business days after the execution of an order.
  • Shares Outstanding: This is the number of shares outstanding at the end of a fiscal period as reported in the Balance Sheet. This is the number of shares issued minus the shares held in Treasury.
  • Short: One who has sold a contract to establish a market position and who has not yet closed out this position through an offsetting purchase; the opposite of a long position. Also the term short means selling something not owned with the intent to purchase it at a better price at a later date.
  • Short Interest: The total number of shares of a security that have been sold short by customers and securities firms that have not been repurchased to settle short positions in the market.
  • Short Position: A position wherein a person's interest in a particular series of options is as a net writer (i.e., the number of contracts sold exceeds the number of contracts bought).
  • Short Selling: Short selling is the selling of a security that the seller does not own, or any sale that is completed by the delivery of a security borrowed by the seller. Short selling is a legitimate trading strategy. Short sellers assume the risk that they will be able to buy the stock at a more favorable price than the price at which they sold short.
  • Short Term Debt: This is debt that comes due within one year.
  • Slippage: The difference between estimated transaction costs and actual transaction costs. The difference is usually composed of a price difference and commission costs.
  • SBPO: Small business public offering.
  • SOES: Small order execution system.
  • Split: Sometimes, companies split their outstanding shares into larger number of shares. If a company with one million shares did a two-for-one split, the company would have two million shares. An investor, for example, with 100 shares before the split would hold 200 shares after the split. The investor's percentage of equity in the company remains the same.
  • Spread: (1) The gap between bid and ask prices of a stock or other security. (2) The simultaneous purchase and sale of separate futures or options contracts for the same commodity for delivery in different months. Also known as a straddle. (3) Difference between the price at which an underwriter buys an issue from a firm and the price at which the underwriter sells it to the public. (4) The price an issuer pays above a benchmark fixed-income yield to borrow money.
  • Standard and Poor’s 500 - $SPX: The S&P 500 index - ($SPX), more formally known as the S&P 500 Composite Stock Price Index, is a european-style, capitalization-weighted index (shares outstanding multiplied by stock price) of 500 stocks that are traded on the New York Stock Exchange, American Stock Exchange and Nasdaq National Market.
  • STICK: One point or dollar.
  • Straddle: A combination in which the put and the call have the same strike price and expiration.
  • Strike Price: The stated price per share for which the underlying security may be purchased (in the case of a call) or sold (in the case of a put) by the option holder upon exercise of the option contract.

T

  • Tank, Tanking: Stock thats price is falling.
  • Teenie: 1/16th.
  • Thread: A series of messages on a message board or other means that generally have the same topic.
  • TICK: Can mean the last movement in a issues price (up tick or down tick). Also a market indicator. As a market indicator quote systems keep track of the up ticks and down ticks of stocks through out the day. The tick shown will be the difference between the up ticks and down ticks for that day so far. A positive number means there have been that many more up ticks than down and a negative number means the opposite.
  • Time Value: The portion of the option premium that is attributable to the amount of time remaining until the expiration of the option contract. Time value is whatever value the option has in addition to its intrinsic value.
  • Total Assets: This is the sum of all short and long term asset categories.
  • Total Current Assets: This value is the sum of all current assets reported for the most recent time list.
  • Total Current Liabilities: This value is the sum of all current liabilities reported for the selected time period.
  • Total Debt: Total Debt is the sum of Short Term Debt, the Current Portion of Long Term Debt and Capitalized Lease Obligations, Long Debt and Capitalized Lease Obligations.
  • Total Debt To Total Equity (MRQ) (Most Recent Quarter): This ratio is Total Debt for the most recent fiscal quarter by Total Shareholder Equity for the same period.
  • Total Equity: This is the sum of all the individual equity line items on the quarterly Balance Sheet.
  • Total Liabilities: This is the sum of all current and long term liabilities reported.
  • Total Operating Expenses: This is the total of the individual operating expense line items.
  • TRIN: A market indicator used in technical analysis, calculated as follows: TRIN = (number of advancing issues divided by number of declining issues) divided by (Total up volume divided by Total down volume). A value of less than 1 is bullish, greater than 1 bearish, also called Arms Index.
  • Triple-Witching: This occurs on the third Friday of March, June, September and December when futures and stock options, based on the S&P 500 index, all expire on the same day.
  • Two Sided Market: The obligation imposed by the NASD that Nasdaq Market Makers make both firm bids and firm asks in each security in which they make a market.
  • Type: The classification of an option contract as either a put or a call.

U

  • Uncovered Call Writing: A short call option position in which the writer does not own an equivalent position in the underlying security represented by his option contracts.
  • Uncovered Put Writing: A short put option position in which the writer does not have a corresponding short position in the underlying security or has not deposited, in a cash account, cash or cash equivalents equal to the exercise value of the put.
  • Underlying: The "something" that the parties agree to exchange in a derivative contract.
  • Underlying Security: The specific security that can be bought or sold by the exercise of the option contract. For example, IBM stock is the underlying security to IBM options. Depository receipts: The class, series and number of the foreign shares represented by the depository receipt.
  • Underwriter: The investment banking firm that brought the company public. In the IPO Summary section we include both the primary Underwriter, called the Lead Manager and the Co-Manager, when available.
  • URL: Uniform Resource Locater, Internet address of a web page (http:www.sitename.)
  • UT: Up tick in the price of a stock, Price moved up.

V

  • Volatility: A measure of the fluctuation in the market price of the underlying security. Mathematically, volatility is the annualized standard deviation of returns.

W

  • Warrant: This piece of paper gives an investor the right to purchase securities at a fixed price within a fixed time span. Warrants are like call options, but with much longer time spans -- sometimes years.
  • WEBS: World Equity Benchmark Shares -- WEBS Index Shares represent a new approach to international investing, offering passive index management and facilitating targeted portfolio exposure. There's a WEBS Index Series for each of 17 countries. Each WEBS Index Series seeks to track the performance of a specific MSCI Index. Many of these indices have been used by investment professionals for more than 25 years. WEBS are listed on the American Stock Exchange and trade like any other stock.
  • Writing: The seller of an option, usually an individual, bank, or company, that issues the option and consequently has the obligation to sell the asset ( if a call) or to buy the asset (if a put) on which the option is written if the option buyer exercises the option.
  • WTF: Potty Mouth!

Y

  • Yield: In general, a return on an investor's capital investment. For bonds, the coupon rate of interest divided by the purchase price, called current yield. Also, the rate of return on a bond, taking into account the total of annual interest payments, the purchase price, the redemption value, and the amount of time remaining until maturity.

Z

  • Zero Coupon Bond : Such a debt security pays an investor no interest. It is sold at a discount to its face price and matures in one year or longer.
  • ZZZZZZ: Sleeping or Bored.