| Glossary of Term: A |
| aftermarket |
|
Trading activity in a security immediately following its initial offering to the public. |
| agency order |
|
An order that a broker/dealer executes for the account of a customer with another professional or retail investor and for which a commission is typically charged. (See principal orders) |
| American Depositary Receipt (ADR) |
|
A U.S. security that is a repackaged foreign security. A U.S. bank creates an ADR based on evidence of ownership of a specified number of shares in the foreign security, while the underlying shares are held in a depositary in the issuing company's home country. U.S. investors may buy shares in the foreign company in the form of an ADR. The certificate, transfer, and settlement practices for ADRs are identical to those for U.S. securities. |
| AMEX |
|
American Stock Exchange. |
| analysts |
|
See securities analyst |
| annual report (10 K) |
|
Public companies are required to file an annual report with the Securities and Exchange Commission detailing the preceding year's financial results and plans for the upcoming year. Its regulatory version is called "Form 10 K." The report contains financial information concerning a company's assets, liabilities, earnings, profits, and other year-end statistics. The annual report is also the most widely-read shareholder communication. (See management's discussion and analysis) |
| arbitrage |
|
Arbitrage involves the simultaneous purchase of a security in one market and the sale of it or a derivative product in another market to profit from price differentials between the two markets. (See derivative) |
| ask price (offer price) |
|
The price at which a Market Maker is willing to sell a security. (See Market Maker, best ask) |
| auction market |
|
Stock exchanges, like the New York Stock Exchange and the American Stock Exchange, are auction markets where buyers and sellers meet through a specialist. (See dealer market, Market Maker, specialist) |
| |
| Glossary of Term: B |
| bear and bull markets |
|
A bear market is one in which prices are low or declining; a bull market is one in which prices are high or rising. |
| beneficial owner |
|
A person who benefits from ownership of a security or mutual fund. Shares or title may be held by a bank or broker for safety and convenience, or in "street name" to expedite transactions, but the real owner is the beneficial owner. |
| best ask |
|
The lowest quoted offer of all competing Market Makers to sell a particular stock at any given time. |
| best bid |
|
The highest quoted bid of all competing Market Makers to buy a particular stock at any given time. |
| best-execution requirement |
|
The obligation of Market Makers, broker/dealers, and others to execute customer orders at the best price available at the time the trade is entered. (See Market Maker.) |
| beta |
|
A statistical measure of a stock's volatility compared with the overall market. A beta of less than 1 indicates lower risk than the market; a beta of more than 1 indicates higher risk than the market. (See volatility.) |
| bid price (buy price) |
|
The quoted bid at which a Market Maker is willing to buy a stock. (See Market Maker, best bid.) |
| bid/ask spread |
|
The difference between the price at which a Market Maker is willing to buy a security (bid), and the price at which the firm is willing to sell it (ask). The spread narrows or widens according to the supply and demand for the security being traded. (See inside quote, spread.) |
| block trade |
|
A purchase or sale of a large quantity of stock, generally 10,000 shares or more. |
| bond |
|
A long-term promissory note in which the issuer agrees to pay the owner the amount of the face value on a future date and to pay interest at a specified rate at regular intervals. |
| |
| Glossary of Term: C |
| call |
|
Options: The right to buy a specific number of shares at a specified price by a fixed date. |
| Chinese Wall |
|
A term used to describe procedures enforced within a securities firm that separate the firm's departments to restrict access to non-public, material information. The procedures help NASD members avoid the illegal use "inside" information. |
| churning |
|
Excessive trading to generate commissions |
| circuit breaker |
|
A procedure that temporarily halts trading on all U.S. stock markets for one hour when the Dow Jones Industrial Average falls 250 points or more within a trading day. The pause is designed to allow time for the markets to absorb the news that precipitated the decline. Should the average fall another 150 points within the same day, trading would again be halted, this time for two hours. |
| commission |
|
Fees paid to a broker for executing a trade based on the number of shares traded or the dollar amount of the trade. |
| Committee on Uniform Security Identification Procedures (CUSIP) number |
|
A unique nine-character alpha/numeric code appearing on the face of each stock certificate that is assigned to a security by Standard & Poor's Corporation. The number is used to expedite clearance and settlement. |
| common stock |
|
A class of securities representing ownership and control in a corporation and that may pay dividends as well as appreciate in value. |
| confirmation |
|
Formal memorandum from a broker to a client giving details of securities transaction. When a broker acts as a dealer, the confirmation must disclose that fact to a customer. |
| convertible bond |
|
A bond that can be exchanged at the option of the holder into preferred or common stock at a preset ratio. (See common stock, preferred stock) |
| corporate governance standards |
|
The non-quantitative qualification standards for companies whose securities are traded on Nasdaq. |
| |
| Glossary of Term: D |
| debenture |
|
An unsecured bond backed solely by the general credit of a company. |
| depositary bank |
|
When a company decides to issue American Depositary Receipts, it appoints an authorized depositary, normally part of a large U.S. banking institution or trust company. (See American Depositary Receipts) |
| derivative |
|
A generic term often applied to a wide variety of financial instruments that derive their cash flows, and therefore their value, by reference to an underlying asset, reference rate, or index. |
| dividend |
|
Distributions to stockholders of cash or stock declared by the company's board of directors. |
| due diligence |
|
A thorough investigation of a company that is preparing to go public, undertaken by the company's underwriter and accounting firm. |
| |
| Glossary of Term: E |
| EDGAR |
|
Electronic Data Gathering, Analysis, and Retrieval (EDGAR)--An electronic system developed by the Securities and Exchange Commission. EDGAR permits companies to file electronically with the SEC all documents required for securities offerings and ongoing disclosure obligations. EDGAR became fully operational mid-1995. (See Securities and Exchange Commission) |
| electronic communication network (ECN) |
|
Any electronic system that widely disseminates to third parties orders entered by an exchange Market Maker or OTC Market Maker, and permits such orders to be executed against in whole or in part. (See Market Maker) |
| equity |
|
The ownership interest of stockholders in a company. Also, the excess of the market value of securities over debit balances in a margin account. (See credit and debit balance, margin) |
| excessive trading |
|
A broker excessively trades an account for the purpose of increasing his or her commissions, rather than to further the customer's investment goals. |
| |
| Glossary of Term: F |
| Federal Reserve System |
|
A federal government institution created by Congress to administer the nation's credit and monetary policies. Among other things, the Board of Governors of the Federal Reserve System sets the initial amount of credit that broker/dealers (as well as other lenders) may extend to customers to purchase securities. |
| foreign |
|
A non-U.S. company with securities trading on a U.S. Stock Market. |
| Form 10 K |
|
See annual report |
| Form 20-F |
|
A Securities and Exchange Commission 1934 Act registration statement and annual report form typically used by foreign issuers. |
| Form 6-K |
|
The Securities and Exchange Commission form for non-U.S. issuers to make periodic reports. |
| Form F-1 |
|
The Securities and Exchange Commission 1933 Act form registering the securities of a non-U.S. company to be issued as part of a public offering. |
| |
| Glossary of Term: G |
| Generally Accepted Accounting Principles (GAAP) |
|
Rules, conventions, standards, and procedures that are widely accepted among financial accountants. Since 1973, GAAP doctrine has been established by the Financial Accounting Standards Board (FASB), an independent, self-regulating organization. |
| going-concern value |
|
The value of a company as an operating business to another company or individual. |
| goodwill |
|
The going-concern value of a company in excess of its asset value; goodwill is considered an intangible asset. Generally, it is the value of the business' good name, its customer relations, high employee morale, and other factors that might translate into earning power. Nasdaq's calculation of net tangible asset value excludes goodwill. (See going-concern value) |
| |
| Glossary of Term: H |
| held |
|
A situation where a security is temporarily not available for trading. Market Makers are not allowed to display quotes of held securities. |
| house |
|
A person or company doing business as a broker or dealer in securities, investment banking, or related services. |
| house spread |
|
Among Market Maker firms, the house spread is the difference between the highest price bid for a security, and the highest price asked the difference between best bid and best ask |
| hypothecation |
|
Pledging of securities or other assets as collateral to secure a loan, such as a debit balance in a margin account. |
| |
| Glossary of Term: I |
| individual investor |
|
A person who buys or sells securities for his or her own account. The individual investor is also called a retail investor or retail shareholder. |
| initial public offering (IPO) |
|
A company's first sale of stock to the public. Companies making an IPO are seeking outside equity capital and a public market for their stock. (See syndicate, underwriter) |
| institutional investor |
|
A bank, mutual fund, pension fund, or other corporate entity that trades securities in large volumes. (See also buy-side trader, fourth market, qualified institutional investor) |
| Investment Company Institute (ICI) |
|
The U.S. trade association for the mutual fund industry. Investment companies create and maintain mutual funds and investment trusts. |
| investment banking, securities business |
|
The business carried on by a broker or dealer; a business that deals in government or municipal securities; a business that underwrites or distributes securities issues; a business that buys or sells securities for itself or on the account of others. The definition does not include banks or bank departments. |
| investor |
|
A person who buys or sells securities for his or her own account or the account of others. |
| IPO |
|
See initial public offering |
| issuer |
|
A corporation that has distributed to the public securities registered with the Securities and Exchange Commission. |
| |
| Glossary of Term: L |
| last-sale service |
|
A service that allow real-time access to last-sale information reported by Market Makers. |
| last-sale reporting |
|
The electronic notification by a Market Maker to The Nasdaq Stock Market of the price and the number of shares involved in a transaction in a Nasdaq security. The notification must be made within 90 seconds of the execution of an order. |
| letter of intent |
|
A letter that formalizes the relationship between an underwriter and a company preparing to go public. The letter of intent outlines the underwriter fees, ranges for stock prices, and other terms of the underwriter's agreement. |
| limit order |
|
An order to buy or sell a security at a customer-specified price; a customer order to buy or sell a specified number of shares of a security at a specific price. (See stop-loss order) |
| liquidity |
|
The liquidity of a stock is the ease with which the market can absorb volume buying or selling, without dramatic fluctuation in price. |
| liquidity ratio |
|
A measure of the trading volume of a security associated with a 1 percent change in its price. The higher the ratio, the more shares that can be traded with little change in price. |
| |
| Glossary of Term: M |
| margin |
|
An account in which a customer purchases securities on credit extended by a broker/dealer. Rules of the Federal Reserve Board and NASD govern margin accounts. |
| markdown and markup |
|
A markdown is a charge subtracted from the selling price of a security that a customer is selling to a dealer/ broker for the broker's/dealer own account. The broker/dealer adds a markup to the price when it sells a security to a customer from its own account. The markdown or markup are the equivalent of a commission on the sale. |
| market capitalization |
|
The price of a stock multiplied by the total number of shares outstanding. Also, the market's total valuation of a public company. |
| Market Maker |
|
A firm that maintains a firm bid and offer price in a given security by standing ready to buy or sell at publicly-quoted prices. The Nasdaq Stock Market is a decentralized network of competitive Market Makers. Market Makers process orders for their own customers, and for other NASD broker/dealers; all NASD securities are traded through Market Maker firms. Market Makers also will buy securities from issuers for resale to customers or other broker/dealers. About 10 percent of NASD firms are Market Makers; a broker/dealer may become a Market Maker if the firm meets capitalization standards set down by NASD. |
| Market Maker spread |
|
The difference between the price at which a Market Maker is willing to buy a security and the price at which the firm is willing to sell it. (See inside market) |
| market order |
|
An order to buy or sell a stated amount of a security at the best possible price at the time the order is received in the marketplace. |
| market value |
|
The market value of a security is the last-sale price multiplied by total shares outstanding. It is calculated throughout the trading day, and is related to the total value of the index. |
| material news |
|
News released by a public company that might reasonably be expected to affect the value of a company's securities or influence investors' decisions. Material news includes information regarding corporate events of an unusual and non-recurring nature, news of tender offers, unusually good or bad earnings reports, and a stock split or stock dividend. |
| Municipal bonds |
|
Bonds issued by states, cities, counties, and towns to fund public capital projects like roads, schools, sanitation facilities, bridges, as well as operating budgets. These bonds are exempt from federal taxation and from state and local taxes for the investors who reside in the state where the bond is issued. |
| |
| Glossary of Term: N |
| NASD |
|
See National Association of Securities Dealers, Inc. |
| NASD Rules |
|
The numbered rules set forth in the NASD Manual beginning with the Rule 0100 Series. |
| Nasdaq |
|
The National Association of Securities Dealers Automated Quotation system. |
| Nasdaq CompositeSM Index |
|
A statistical measure that indicates changes in The Nasdaq Stock Market. The Nasdaq Composite Index measures all Nasdaq domestic and foreign common stocks. It is market-value weighted: each company's security affects the index in proportion to its market value. Securities in the Nasdaq Composite Index generally are assigned to subindexes based on their Standard Industrial Classification (SIC) codes. (See market value, subindex, Standard Industrial Classification codes) |
| net change |
|
The difference between today's last trade and the previous day's last trade. |
| net tangible assets |
|
An accounting term defined as stockholders' equity minus goodwill. |
| new account information form |
|
Document filled out by a broker that details vital facts about a new client's financial circumstances and investment objectives. |
| new issue |
|
Securities being offered to the public for the first time; subject to the rules of the Securities and Exchange Commission. |
| newspaper listings |
|
The stock price coverage given to securities in newspapers, dependent upon in which market the company trades, the size of the company, and the level of trading activity in the company's stock. |
| NYSE |
|
New York Stock Exchange |
| |
| Glossary of Term: O |
| offer price |
|
See ask or offer price |
| open order |
|
An order to buy or sell a security that remains in effect until it is either canceled by the customer or executed. |
| operations |
|
The back office of a brokerage firm where all clerical functions having to do with clearance, settlement, and execution of trades are handled. |
| 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. A call option allows the buyer to purchase the underlying stock at any time up to the expiration date of the contract. A put option allows the buyer to sell the underlying stock at any time up to the expiration date of the contract. |
| order flow |
|
aggregated small orders to purchase or sell securities that brokers send to dealers often in return for cash payments. |
| order matching |
|
The Market Maker practice of pairing buy and sell orders for like amounts of securities at identical prices. |
| over-the-counter (OTC) securities |
|
Securities that are not listed and traded on an organized exchange. |
| |
| Glossary of Term: P |
| pink sheets |
|
Daily printed listings containing quotations for thousands of over-the-counter stocks that are not listed on any of the major stock markets. These quotations are entered by dealers acting as Market Makers in the individual securities. The pink sheets are printed by the National Quotation Bureau. |
| portfolio |
|
The combined holding of more than one stock, bond, commodity, real estate investment, or other asset by an individual or institutional investor. |
| preferred stock |
|
A security that usually pays a fixed dividend and that gives the holder a claim on corporate earnings and assets that is superior to that of holders of common stock. (See common stock.) |
| previous day's close |
|
The previous trading day's last reported trade. |
| price/earnings ratio |
|
The price of a share of a stock divided by earnings per share, usually calculated using the latest year's earnings. The p/e ratio is also called the multiple. |
| prospectus |
|
A formal written offer to sell securities that sets forth the plan for a proposed business enterprise, or the facts concerning an existing one that an investor needs to make an informed decision. |
| proxy |
|
Written power of attorney given by a shareholder of a corporation, authorizing someone to vote on his or her behalf at corporate meetings. |
| proxy statement |
|
Material information required by the Securities and Exchange Commission to be given to a corporation's stockholders as a prerequisite to solicitation of votes. It is required for any issuer subject to the provisions of the Securities Exchange Act of 1934. |
| public float |
|
The portion of a company's outstanding shares that is in the hands of public investors; shares not held by company officers, directors, or investors who hold a controlling interest in the company. |
| put |
|
a contract that grants the right to sell at a specified price a specified number of shares by a certain date. |
| |
| Glossary of Term: Q |
| qualified institutional investor |
|
An institutional investor permitted under Securities and Exchange Commission rules to trade privately-placed securities with other qualified institutional investors without registering the securities with the SEC. A qualified institutional investor must have at least $100 million under management. |
| quarterly report (Form 10 Q) |
|
A report, required by the SEC of publicly-held companies, filed quarterly, that provides unaudited financial information and other selected material. |
| |
| Glossary of Term: R |
| record date |
|
The date on which a company's records are closed to determine which stockholders are to be sent dividends, proxies, rights, etc. |
| red herring prospectus |
|
Industry jargon for a preliminary prospectus issued by underwriters or issuers to gauge interest in a prospective offering. It receives its name from the warning, printed in red, that information in the document is incomplete or subject to change before the issue. (See prospectus, underwriters) |
| registered representative |
|
The employee of an NASD member firm who gives advice on which securities to buy and sell, and who collects a percentage of the commission income he or she generates. |
| right |
|
A privilege allowing existing shareholders in a company to buy shares of a new issue of common stock before it is offered to the public. |
| road show |
|
A series of meetings with potential investors in key cities, designed and performed by a company and its investment banker as the company prepares to go public. |
| Rule 10b-21 |
|
Securities and Exchange Commission rule that prohibits covering a short position in a security with stock purchased out of a new offering of the security, if the short position was established between the filing of the registration statement and the beginning of the distribution of the offering. |
| Rule 10b-6 |
|
Securities and Exchange Commission rule that prohibits persons engaged in a distribution of securities from bidding for or purchasing those or similar securities until they have completed their participation in the distribution. |
| Rule 10b-6A |
|
Securities and Exchange Commission rule that permits broker/dealers engaged in the distribution of a security to engage in "passive" market making transactions in the security being distributed without being in violation of the provisions of SEC Rule 10b-6. |
| Rule 13d |
|
The Securities and Exchange Commission rule requiring disclosures by anyone acquiring a beneficial ownership of 5 percent or more in any equity security registered with the SEC. |
| Rule 15c3-1 |
|
Securities and Exchange Commission rule that requires broker/dealers maintain sufficient liquid assets to satisfy its net capital requirement. |
| Rule 15c3-3 |
|
Securities and Exchange Commission rule that ensures that the broker/dealer has possession or control of customers' securities, and properly segregates these securities from securities the firm owns. The rule also requires that the broker/dealer deposits customers' funds in a Special Reserve Bank Account. |
| Rule 17a-3 |
|
Securities and Exchange Commission rule that specifies the books and records related to the securities business that brokers and dealers have to make and keep current. |
| Rule 17a-4 |
|
Securities and Exchange Commission rule that specifies the time period that broker/dealers must preserve Rule 17a-3 records and other documents pertaining to the business. |
| Rule 19b-4 |
|
Securities and Exchange Commission rule that provides procedures that self-regulatory organizations (SROs) follow to propose rule changes to the SEC |
| |
| Glossary of Term: S |
| safe harbor |
|
The "Safe Harbor for Forward-Looking Information" allows company management to discuss in good faith a company's prospects and financial projections with analysts and investors without fearing litigation. (From the Private Securities Litigation Reform Act of 1995.) |
| secondary market |
|
Markets where securities are bought and sold subsequent to original issuance. |
| secondary offering |
|
A registered offering of a large block of a security that has been previously issued to the public. The blocks being offered may have been held by large investors or institutions, and proceeds of the sale go to those holders, not the issuing company. Also called secondary distribution. |
| Securities Act of 1933 |
|
The "disclosure statute" requires companies to register stock offerings to the public, and disclose important facts through a prospectus, and additional information filed with the Securities and Exchange Commission. |
| Securities Acts Amendments of 1975 |
|
considered the most significant securities legislation since the 1934 Act, this act ended fixed commission rates, initiated action toward development of a national market system, and granted the Securities and Exchange Commission final say in the adoption of rules by any of the self-regulatory organizations. |
| Securities Exchange Act of 1934 |
|
This law created the Securities and Exchange Commission to regulate the securities industry. The law outlawed manipulative and abusive practices in the issuance of securities; it required registration of stock exchanges, brokers and dealers, and registration of exchange-listed securities; it also required disclosure of certain financial information and insider activity. The law gave the SEC surveillance authority over exchanges and brokers, and the authority to regulate margin requirements. The law also authorized the SEC to enforce the Securities Act of 1933. In 1938, the law was amended to allow regulation of over-the-counter markets through self-regulated organizations. |
| securities analyst |
|
An individual who does investment research and makes recommendations to buy, sell, or hold. Most analysts specialize in a single industry or business sector. |
| 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. |
| securities exchange |
|
A physical facility in which buyers and sellers of securities, or their agents, meet to effect transactions. |
| sell-side trader |
|
An employee of a retail broker, institutional broker and trader, or research department who engages in securities transactions. (See buy-side trader) |
| settlement |
|
The conclusion of a securities transaction; a broker/dealer buying securities pays for them; a selling broker delivers the securities to the buyer's broker. |
| settlement date |
|
The date specified for delivery of securities between securities firms, usually three business days after the execution of an order. |
| (T+3) |
| shareholder of record |
|
The name of an individual or entity that an issuer carries on its books as the registered holder (not necessarily the beneficial owner) of the issuer's securities. |
| short sale |
|
The sale of shares of a security that the seller does not own. Such sales are made in anticipation of a decline in the price of the security to enable the seller to cover the sale with a purchase at a later date, at a lower price, and thus at a profit. Securities and Exchange Commission rules allow investors to sell short only when a stock price is moving upward. This prevents "pool operators" from driving down a stock price through heavy short-selling, then buying the shares for a large profit. |
| 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. |
| soft dollars |
|
Payment for brokerage services, such as research, through commissions or directed underwriting rather than fees. |
| specialist |
|
A member of a stock exchange through which all trades in a given security pass. |
| split |
|
The division of outstanding shares of a corporation into a larger number of shares. For example: in a 3-for-1 split, each holder of 100 shares before would have 300 shares, although the proportionate equity in the company would remain the same. A reverse split occurs when the company reduces the total number of outstanding shares, but each share is worth more. |
| spread |
|
The difference between the bid price at which a Market Maker will buy a security, and the ask price at which a Market maker will sell a security. |
| stock |
|
An instrument that signifies an ownership position in a corporation. |
| stock symbol |
|
A unique four- or five-letter symbol assigned to a security that is used for identifying it on stock tickers, in newspapers, on on-line services, and in automated information retrieval systems. If a fifth letter appears, it identifies the issue as other than a single issue of common or capital stock. |
| stop-loss order |
|
A customer order to a broker that sets the sell price of a stock below the current market price, therefore protecting profits that have already been made or preventing further losses if the stock drops. |
| syndicate |
|
A group of investment banking firms formed to conduct an underwriting of a new security issue. (See underwriter) |
| |
| Glossary of Term: T |
| third market |
|
Over-the-counter trading of exchange-listed securities among institutional investors and broker/dealers for their own accounts (not as agents for buyers and sellers). Stock exchange members or non-members may trade large blocks of stock off the floor to avoid the transaction's unsettling effect on the market, or avoid paying a commission on the sale. |
| Nasdaq Stock MarketSM |
|
The Nasdaq Stock Market is a major national and international stock market that uses computers and telecommunications for the trading and surveillance of thousands of securities. The Nasdaq Stock Market is built on a unique system of competing Market Maker firms that list specific prices for the sale or purchase of securities. The Nasdaq Stock Market also is unique in its use of a flexible computer-screen trading system that enables people to trade by computer from wherever they are located. |
| trading halt |
|
The suspension of trading in a Nasdaq security while material news from the issuer is being disseminated. A trading halt generally lasts 30 minutes and gives all investors equal opportunity to evaluate news and make buy, sell, or hold decisions on that basis. |
| transfer agent |
|
An agent who maintains records of stock and bond owners to cancel and issue certificates, and resolve problems arising from lost, destroyed, or stolen certificates. |
| transparent market |
|
The degree to which trade and quotation information is available to the public on a current basis. |
| two-sided market |
|
The NASD regulation that Market Makers quote both a bid and ask price for each security in which they make a market and to execute orders at those prices. |
| |
| Glossary of Term: U |
| unauthorized trading |
|
The purchase, sale or trade of securities in an investor's account without the investor's prior authorization. |
| underwriter |
|
An investment banker who assumes the risk of bringing a new securities issue to market. The underwriter will buy the issue from the issuer and guarantee sale of a certain number of shares to investors; this is firm-commitment underwriting. To spread the risk of purchasing the issue, the underwriter often will form a syndicate (underwriting group, purchase group) among other investment firms. If the investment firm is unwilling to buy the issue outright, other underwriting forms may be used. |
| underwriting spread |
|
The difference between what an underwriter pays for a securities issue, and the price at which he offers it to the public |
| unit |
|
A merger of two or more classes of securities into a single securities product. |
| |
| Glossary of Term: V |
| volatility |
|
The degree of price fluctuation for a given asset, rate, or index. Usually expressed as a variance or standard deviation. (See beta) |
| volume |
|
Amount of trading activity, expressed in shares or dollars, experienced by a single security or the entire market within a specified period, usually daily, monthly, or annually. |
| |
| Glossary of Term: W |
| warrant |
|
A certificate issued by a company giving the holder the right to purchase securities at a stipulated price within specific time limits or with no expiration date (perpetual warrant). A warrant is sometimes offered by a company as an inducement to buy. |
| wire house |
|
A firm whose branch offices are linked by a communications system that permits the rapid dissemination of prices, information, and research relating to financial markets and individual securities. |
| wrap fee |
|
Charge for an investment program that bundles or "wraps" a number of services (brokerage, advisory, research, consulting, management, etc.) together and covers them with a single fee based on the value of assets under management. |
