Stock Market Help
Here is a list of common financial terms. Click on the letter that corresponds with the first letter of the financial term to get the definition.
Warrants
Similar to long term options, they give the holder the right to convert the warrant at a set price, into a set number of shares of the associated stock. They are often issued as bonuses along with newly issued common stock or bonds, and in combination these are called units. When sold ex-warrant, it is too late to get the warrant that was attached to the stock.
Wash Sale
When an investor buys substantially identical securities as those he sold within the last or next 30 days, the sale of these securities can not be used as a realized loss for income tax purposes. For example, you sell your 100 AAA shares on October 1 for a loss of $1000. Then you buy 100 new shares of AAA on October 10. You sell these new shares on December 12 for a $2000 realized gain. On your tax return, you must show a net realized gain of $2000. The wash sale ($1000 loss) is disallowed as an offset against the gain for income tax purposes.
When Issued
A symbol next to the price in a newspaper stock or bond listing which indicates that the price shown is for a security that has been authorized but is not yet trading. Frequently used to show after split price before a split has occurred.
Whipsaw
A volatile market that can punish a trader who buys just before prices fall and then sells first before prices recover.
Writer
An investor who sells short put or call options, hoping to retain the income derived from the short sale. A covered writer owns the underlying stock and is hedged.