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.
A subset of the 500 index. Options based on this index (OEX) are very popular.
This value is calculated by averaging all the closing values of the S&P 500 for the last 200 days. You can use this and the following measures to create market timing alerts.
The S&P 500 index comprises 500 companies that account for 85% of the dollar value of all NYSE stocks. It is a broader and more representative average than the DOW but both move in tandem most of the time. The S&P 500 index does not include dividends. It is capitalization weighted, meaning that stocks with the highest value (number of shares outstanding multiplied by the price per share) have the greatest affect on the index. The S&P 500 index measures (also defined in the glossary) can be used to gauge the health or direction of the stock market.
The latest S&P 500 value divided by the last 4 quarters earnings per share. Reading above 24 and below 8 are considered sell and buy signals respectively by many analysts.
The sum of dividends of all stocks in the S&P 500, divided by the latest value of the S&P 500. Reading below 3 and above 6 are considered sell and buy signals respectively.
An index comprised of 400 mid-sized corporations.
The computerized ranking system for stocks based on the last 10 years of dividend and earnings data of each company listed: A+ = Highest; C = Lowest; D = Company undergoing reorganization; LIQ = Company in liquidation, NR = No ranking due to insufficient data.
The total sales or revenues for the indicated year for a given security.
The unweighted average of the growth rate for sales or revenues over the last 3 years for a given corporation.
The percent of your investment capital that is subtracted immediately to cover sales and promotion costs when purchasing mutual funds. For example, if you invest $10,000 in a fund with an 8% sales charge, a sales fee of $800 is subtracted and your initial investment principal is $9,200. Also called Front Load and Initial Load.
Equities purchased from companies belonging to a specific sector within an industry, such as airline or electronic stocks.
An investment that is represented by a negotiable document issued by a corporation or governmental entity for the purpose of raising capital. A listed security is one that is approved for trading on an exchange. A delisted security is one that is removed because of financial insufficiency or breaking of exchange rule. Two main categories: equity (claims against the earnings of a company by shareholders - includes stocks and mutual funds) and debt (claims against the assets of a company or government - includes bonds, notes, bills, and commercial paper). Some securities have hybrid characteristics such as preferred and convertible bonds. Securities are also classified by whether they are taxable, or tax-exempt. Most securities can be identified by unique ID numbers called CUSIP numbers or by symbols. Note: The term investment is more generic than security.
A Transaction Type for the selling of a security. A sell creates a closed lot since it is the closing transaction for an open lot.
This will direct your order to us for review. If approved, it will be immediately directed to the appropriate exchange for execution.
U.S. Government savings bond issued from 1941 to 1979.
U.S. Government savings bond with a 10-year maturity and face value of $50 to $10,000. It has properties of a zero coupon bond since it is purchased at a discount to face value.
U.S. Government savings bond available in denominations of $500 to $10,000 in exchange for Series E or EE bonds.
Date by which an executed order must be settled. Buyers pay for securities with cash, and sellers deliver certificates of sold securities.
Total proceeds from all short open lots minus all net amounts paid for covered trades in a given account.
The latest value of all short investments (or short open lots) in a given account.
Type of pension plan into which both employer and employee contribute. It is easier to set up than a 401(k) or KEOGH and allows greater annual contributions than an IRA.
An index measuring a basket of small-capitalization stocks (companies whose revenues are typically under $500 million) which are thought to be representative of changes in the stock prices of small companies as a whole.
A form of margin transaction in which a client can obtain advantageous credit to acquire a margin security through the exercise of a right or warrant.
The year a given mutual fund began operation.
Power of attorney form by which ownership of a security can be transferred from the registered owner to another party.
A change in the number of shares outstanding (in circulation). The number of shares are adjusted by the split ratio, e.g. 2 to 1. In this case, 1000 shares splits to 2000 but the opening price and current price are cut in half. The overall effect is to maintain the same cost and current value of an investment while increasing the number of shares and lowering the per share price. Reverse splits reduce the number of shares. Splits are done to reduce the cost per share to make it easier for small investors to own the stock in round lots.
An order to sell if and when the market price falls to a specified price. A stop order becomes a market order when the stop price is hit and the order will be executed at any market price at, above or below stop price. A variation of this, the stop-limit order, will only be executed at the limit price. If the market falls quickly: a stop order might be executed at a price much lower than the stop price and a stop-limit order might not get executed at all. Some investors prefer to set Mental Stops. When a stop order is executed an investor is said to be Stopped Out.
The strike, or exercise, price of an option is the specified share price at which the shares of stock can be bought or sold by the buyer if he exercises the right to buy (in the case of a call) or sell (in the case of a put). A strike price is the actual numeric value of the option. For example, a May option may have strike prices of 45, 50 and 55. Strike prices are determined when the underlying reaches a certain numeric value and trades consistently at or above that value. If, for example, XYZ stock was trading at 49, hit a price of 50 and traded consistently at this level, the next highest strike may be added. See Call Option.
The official trading symbol used in actual transactions for stocks, options, mutual funds, or indices. A symbol uses letters, numbers, or a combination of the two. If the symbol contains any numbers, it means that it is a mutual fund that has not been assigned an actual trading symbol by NASDAQ and there is no quote service on that fund. For any stock traded on the NYSE, AMEX, or OTC, the symbol is the official trading symbol used in actual transactions. Preferred stock has a dash followed by the preferred stock class. For example, Company B Class A is displayed as BBB-A. Indices have their own symbols, which are shown in the Add Index screen.