Category Archives: A -G

403 (b)

A 403(b) is an alternative retirement plan to a 401(k) plan offered by non-profit organizations, rather than corporations.

Advance/Decline Index (AD Line)

Advance/Decline Index is a technical analysis tool that represents the total difference between the number of advancing and declining security prices. This index is considered one of the best indicators of market movements as a whole.

All-or-None Order

An all-or-none order is an order type that only executes when the full amount of the shares in the order can be executed.

AMEX

AMEX is the third largest Stock Exchange in the US by trading volume.

Arbitrage

Arbitrage is the simultaneous purchase of a security on one stock market and the sale of the same security on another stock market at prices which yield a profit.

Arms Index

The Arms Index is a technical analysis indicator that compares advancing and declining stock issues and trading volume as an indicator of overall market sentiment.

Asset

An asset is anything that has monetary value and can be sold. Assets can be anything from a pencil (though it is not worth much) to a skyscraper to things like Stocks and ETFs.

Bear Market

A Bear Market is a long period where the stock market value falls along with a sense of pessimism for the public. Read this article to learn more!

Bear Spread

A bear spread is a strategy where you simultaneously buy a call option at Strike Price 1 (some amount higher than the current market rate), and sell a call option at Strike Price 2 (some amount lower than the current market right). This is used if the trader thinks the price of the stock will go down, but not by much. It limits both the risk and reward.

Beta

Beta measures a stock’s volatility versus the market’s volatility. Read this article to learn more and see an example of Beta.

Block Trades

Block trades are greater than or equal to 10,000 shares in size and greater than or equal to $100,000 in value!

Blue Chip Stocks

Blue Chip Stocks are from leading and nationally known companies that offer a record of continuous dividend payments and other strong investment qualities.

Box Spreads

A box spread is an option strategy that is created by combining the components of the bull spread and the bear spread. In theory, a box spread should always have a zero profit and zero loss, but some investors use them if they see that current options prices aren’t fully “priced in”. In many cases, the commissions charged for the trades needed for this spread will be greater than the profit.

Bull and Bear ETFs

Bear ETFs short stocks to achieve their goals. Bear ETFs show gains when the underlying stocks loose value. Bull ETFs use long positions and show gains when the underlying stocks show gains.

Bull Market

The tendency of the stock market to trend higher over time. It can be used to describe either the market as a whole or specific sectors and securities.

Bull Spreads

A bull spread is a strategy where you simultaneously buy a long call at Strike Price 1, and sell a call for Strike Price 2 (some higher amount). Use this strategy if you think that a stock’s price will go up above your Point 1, but not as high as your Point 2.

Buy and Hold Strategy

The buy and hold strategy is essentially just what it sounds like: Purchase stocks and then hold them for an extended period of time. The underlying assumption for the buy and hold strategy is that stocks tend to go up in price over extended periods of time.

Buy Sell Agreement

Buy-Sell Agreement is an agreement between shareholders or business partners where both parties agree to purchase or sell a stock.

Buy Side Firms

Buy-Side Firms are institutions that provide advice on buying securities and assets within their own organizations.

Call Option

A Call Option gives the holder the right, but not the need to purchase a fixed quantity of a particular stock at a specific price inside a particular time. Call Options are bought by investors who anticipate a price increase.

Candlesticks

A point on a candle stick chart representing a specific time period (a day, an hour, a minute, etc) in which the underlying stock price has moved. Candlesticks will have a body and usually two wicks – one on each end.

Cap

A cap is an options protection strategy where you simultaneously have a short position on a stock and a long call for the same underlying asset. Adding a long call to your open position means that you have the right to cover your short at the strike price.

Capital Funding

Capital funding is the provision of monetary resources or capital for productive uses. Capital provided by investors or other parties is used by various entities such as governments, companies, organizations, and individuals in order to fund their functions and operations.

Capital Gain or Loss

Profit or loss resulting from the sale of certain assets classified under the federal income tax legislation as capital assets. This includes stocks and other investments such as investment property.

Capital Gains Distribution

By law, every year, mutual funds must distribute that year’s net investment income (the total of dividends and interest received, less fund expenses) and net realized gain (gains less losses on securities sales) to its shareholders.

Cash Conversion Cycle

Cash Conversion Cycle is defined as the length of time (in days) needed to transform inventory purchases into actual cash receipts. It takes into consideration the company’s time commitment towards collecting receivables and paying its suppliers, and is an important measure of a company’s internal liquidity.

Certificates of Deposit (CDs)

A CD or Certificate of Deposit is one of the safest and liquid forms of investment available. Insured by the FDIC (Federal Deposit Insurance Corporation), CDs are a type of interest earning deposit account.