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.
Date on which a shareholder must own shares to be entitled to a dividend payment. From the following day, until the day the dividend is actually paid, the stock trades ex-dividend.
A bond issued by a corporation which is secured by the general credit or promise to pay of the issuer. It is not backed by collateral such as tangible assets.
Money owed by the client to the broker.
Securities representing money borrowed by an issuer that must be paid back at a specific date. The security pays interest or is purchased at a discount to face value.
Cash required by a corporation or municipality to cover all interest and principal payments due in a given year, including sinking fund payments.
Long-term debt plus current liabilities divided by the last fiscal year net equity per share of common stock for a given corporation. A ratio above 2:1 or 200% may be excessive and a sign of strained corporate finances.
The lending rate that the Federal Reserve Bank charges on loans made to other banks and financial institutions. Changes in this rate tend to have large ripple effects on the rates banks in turn charge their customers. The bond market and sometimes the stock market react sharply to changes in this rate. You can create market timing alerts with it.
Capital gains (long or short term), interest, or dividends paid to bond holders and shareholders. These can be received as cash or stock and they are treated as closed lots for tax purposes. Return of capital is also a type of distribution, but it is usually tax exempt. Distributions from mutual fund shares are easily reinvested into more shares and the compounding of reinvested shares can add substantially to the cumulative return of a fund.
The periodic, usually quarterly, payment made by a corporation to its shareholders, generally expressed as dividend per share. Dividends represent earnings that are not reinvested by the corporation. Some stocks pay no dividends and others, such as utility companies pay substantial ones that represent a large portion of the total return a shareholder will get from his investment. Dividends are a type of distribution and are usually taxable in year received.
Shows how often a given mutual fund pays a dividend distribution.
The unweighted average annual growth rate of annual fiscal year dividends for the last three fiscal years for a given security.
The year in which a given corporation started paying dividends to stockholders.
Indicates the annual dividend payment for the next 12 months for a given security. Most companies pay dividends quarterly.
This value is calculated by averaging all the closing values of the DJIA for the last 200 days. You can use this and the following measures to create market timing alerts.
The latest DJIA value divided by the estimated current year earnings per share (EPS), with the index multiplier taken into account. Readings above 24 and below 8 are considered sell and buy signals respectively by many analysts.
The latest value of the DJIA divided by the book value for all DJIA stocks, adjusted by the multiplier. Readings above 2.5 may be a sell signal.
The sum of all dividends of all stocks in the DJIA divided by the latest value of the DJIA, adjusted by the multiplier. Readings below 3 and above 6 are considered sell and buy signals respectively.
The most commonly followed index of the U.S. stock market. It is comprised of 30 corporations spanning many different industries. It is price weighted, meaning that a $2 change in a $100 per share stock will have a greater affect than a $2 change in a $20 per share stock. The Dow Jones Industrial Average measures (also defined in the glossary) can be used to gauge the health and direction of the stock market; see DJIA 200-Day Moving Average, DJIA Price/Earnings, DJIA Yield, DJIA Price/Book.
A index of 20 corporations in the transportation sector, including air, rail, and truck.
An index of 15 major utility corporations.
In brokerage, when trading stocks or options, it designates whether a limit trade is valid for Good Until Canceled or Day Only. Market orders all have a duration of Day Only by definition, since they are executed as soon as possible at the market price. It is possible that a market order could arrive after the market close, in which case, it may remain valid at the next market opening.
If you have not taken special steps to establish a DVP/RVP account with us, you must not select this account type. DVP/RVP accounts relate mainly to institutional trading accounts.