Term used by SEC in Regulation D of private placements. Concept: although 35 is the upper limit of persons who may purchase a private placement, accredited investors are not included in this number. General definition of accredited investors: institutional type accounts and persons of wealth (persons with a net worth of $1 Million or more, persons with annual income of $200,000 or more, persons who purchase $150,000 or more of the offering and this does not represent more than 20% of their net worth).
Interest that has been earned since the last interest payment date ie: When a bond trades, the buyer pays the seller the accrued interest.
Buying more shares of a security without causing the price to increase considerably. A stock may start to base and trade sideways for an extended period. While this base builds, traders and investors may seek to establish or increase existing positions.
Momentum indicator that relates price changes with volume. It relates the closing price to the range of prices (high - low). The closer the close is to the high, the more volume is added to the cumulative total.
Widely used indicator to measure the breadth of a stock market advance or decline. The AD line tracks the net difference between advancing and declining issues. It is usually compared to a market average where divergence from that average would be an early indication of a possible trend reversal.
The ratio of advancing issues over declining issues. Taking the moving average of the AD ratio will smooth it so it can be used as an overbought and oversold indicator.
Stage the market or of a stock that is characterized by an uptrend, making higher highs and higher lows.
Market momentum indicator using the advancing issues and the declining issues. It subtracts the declining issues from the advancing ones and is usually smoothed to make it a good overbought or oversold indicator.
Trading activity before 9:30am EST and/or after 4:00pm EST. Market hours are from 9:30am EST to 4:00pm EST.
Type of order issued to a broker by a buyer or seller to fill the order in its entirety or not at all. There would be no partial transactions.
Alpha measures the portion of an investment's return that is not related to the performance of the overall market; it is the difference between an investment’s actual return (over a period of time) and its market return as measured by beta. Alpha is most commonly used with stock funds and is one way to measure the value that a portfolio manager adds to (or detracts from) a fund's return.
Measure of the residual risk that an investor takes for investing in a fund rather than a market index. It represents the difference between a mutual fund's actual performance and the performance that would be expected based on the level of risk taken by the fund's manager. If a fund produced the expected return for the level of risk assumed, the fund would have an Alpha of zero. A positive Alpha indicates the manager produced a return greater than expected for the risk taken. Conversely a negative Alpha indicates the manager has not adequately rewarded investors for the risks taken.
Securities issued by commercial banks that represent the shares of a foreign company. ADRs trade just like normal stocks on various US stock exchanges. Their performance usually parallels that of the parent company on its domestic exchange.
Acronym used for the American Stock Exchange.
Weighted index of the stocks listed on the American Stock Exchange. The market capitalization of each company is used to construct the index.
Person who evaluates financial instruments, performs investment research, and makes recommendations to institutional and retail investors to buy, sell, or hold financial instruments.
Date on which a company first publicly announces an impending stock split.
Translation of periods of less than a year into an annual rate for comparative purposes. To annualize quarterly figures, you would multiply them by four.
Term for the yearly report made by a company to its stockholders. Federal law requires all registered corporations to make such reports. They usually contain a balance sheet, an income statement, a list of changes in retained earnings, and how income of the corporation was used.
Contract between an individual and an insurance company in which the individual pays money into an account in exchange for a guaranteed payment at or during retirement. Annuities offer tax-deferred growth potential. There are two types of annuities: fixed and variable.
Simultaneous buying and selling of securities to take advantage of price discrepancies. Arbitrage opportunities usually surface after a takeover offer.
Known as the "offer", it is the price that the market maker guarantees to fill a buy order. A buy order placed at the market will usually be filled at the current asking (offer) price.
A process of dividing investments in your portfolio among different kinds of assets, such as stocks, bonds, futures, forex, real estate, and cash, to try to meet a specific objective.
Any possessions that have value in an exchange.
An option whose strike price is equal to the price of the underlying security.
Part of the Directional Movement Indicator system, the ADX line is based on the spread between the +DI and -DI lines from that same system.
Indicator that measures a security's volatility. High ATR values indicate high volatility and may be an indication of panic selling or panic buying. Low ATR readings indicate sideways movement by the stock.
Sales fee charged when you sell or redeem shares of a mutual fund.
System that uses historical data in order to demonstrate what if scenarios, Back Testing have the benefit of hindsight.
Graphical display of price information. Horizontal axis represents the passage of time with the most recent time periods on the right side, the vertical axis represents the price.
Time period where a stock or the market is trending sideways, characterized by a flat trading range without any noticeable up or down trend.
Actual cost of an investment, which usually include commission and/or other fees to acquire the investment.
Perspective that prices will decline. Bear markets occur when the majority of all stocks decline over an extended period of time.
Situation when price records a higher high and the indicator forms a lower high. The indicator does not confirm the higher high which could precede a reversal.
Time period when stock prices are generally declining. Often measured by a decline of more than 20 percent.
Price breaking below a level which generates a sell signal, price then reverses trend which negates the sell signal, trapping the bears that shorted on the signal.
A market index used by individual investors, portfolio managers, and market researchers to determine how a particular market or market sector performs.
Entity who receives proceed(s) of a trust, retirement plan, or life insurance policy.
Measure of a security's market risk. Most stocks move in in the same direction as the stock market, the level of the beta indicates the degree of correlation between a security and the market. The market is the benchmark and has a beta of 1.0
The price at which the market maker guarantees to fill a sell order. A sell order placed at the market will usually be filled at the current bid price. Bid price is usually less than the Ask price.
Purchase or sale of a large number of shares or dollar value of bonds. The term is relative albeit, 10,000 or more shares is generally considered a block.
An investment vehicle representing a loan to a corporation, government, or municipality. Generally, bonds pay a fixed interest rate and return the principal investment at maturity. Bonds issued by the U.S. government are guaranteed as to the timely payment of principal and interest if held to maturity; other bonds are not guaranteed and carry varying degrees of financial risk.
Mutual funds that invest in bonds issued by municipalities, corporations, and the U.S. government and its agencies. Bond mutual funds do not mature and are not guaranteed, although some of the individual bonds they invest in may be.
Comparison of the number of issues traded with the number of issues listed for trading. Measurement of the number of issues advancing versus the number of issues declining on a given day or as a moving average.
Price gap that forms on the completion of a significant price pattern. Breakaway gap generally signals the beginning of significant price movement.
Security price emerging from a previous trading pattern. The new price "breaks out" above the high or below the low trading pattern lines that enclose all other prices for that security in the preceding period.
Perspective that prices will increase. Bull markets occur when the majority of all stocks increase over an extended period of time.
Investor's Intelligence market sentiment indicator which shows the relationship between bullish and bearish advisors. This is a contrarian indicator, when it reflects extreme bullishness, the market is may be at a top.
Situation when price records a lower low and the indicator forms a higher low. The indicator does not confirm the lower low which could precede a reversal.
Extended period of time when prices in the market are generally increasing.
Price breaking above a level which generates a buy signal, price then reverses trend which negates the buy signal, trapping the bulls that bought (went long) on the signal.
Company repurchasing shares of its own stock.
Sudden upward movement in the market value of a security characterized by a gap in the prices between one trading session and the next.
Investor borrows money from a broker to make an investment.
Purchasing a stock with the intent of selling it at a higher price (buy low, sell high). Some investors “Short Sell” meaning they sell a stock with the intent of buying it back at a price lower than their purchase price (sell high, buy low).
Indicator to buy a stock. Conditions of the signal will be determined by the indicator.
A bondholder’s risk that a bond issuer may redeem or “call” a bond prior to its maturity date, often due to falling interest rates.
Displays the stock open, close, high, and low prices for a given time period ie: 5 min chart, daily chart.
Difference between what you paid for shares, stocks, and certain other investments and what you realize when you sell them. (Buy low, Sell high).
Profit derived from the selling price exceeding its initial purchase price. A realized capital gain is an investment that has been sold at a profit. An unrealized capital gain is an investment that hasn't been sold yet but would result in a profit if sold. Capital gain is often used to mean realized capital gain.
Profits distributed to shareholders resulting from the sale of securities held in a mutual fund's portfolio.
The loss incurred when a capital asset, such as real estate or stock, decreases in value from its purchase price. A capital loss is not "realized" until the asset is sold.
Oscillator that signals whether a stock is undergoing accumulation or distribution. CMF is different than a momentum oscillator in that it is not influenced by the daily price change. CMF focuses on the location of the close relative to the range for the time period.
Price trending between parallel trendlines.
A trust that allows you to leave assets to a charity and receive income and tax benefits at the same time. You can receive income from the trust for a specified period of time, after which all remaining assets are transferred to the charity.
The term used for the short-term IOUs (generally three to nine months in duration) of large, creditworthy corporations.
Earnings on an investment's earnings. Over time, compounding can produce significant growth in the value of an investment.
The most commonly used measure of inflation, the CPI tracks the average change in the prices of a fixed "market basket" of goods and services, including energy, food, health care, clothing, and entertainment.
The named individual or entity who will receive a benefit from an insurance policy, pension plan, trust, or will if he, she, or it is predeceased by the named primary beneficiary. Also referred to as the secondary beneficiary.
Investment style based on sentiment. Contrarians are typically bullish when sentiment is bearish and bearish when sentiment is bullish.
After an advance, a decline of 10% or less and/or that does not penetrate the low from which the advance began is known as a correction.
The degree to which the movements of two or more variables (such as investment returns) are related.
The measure of a bond issuer's ability to make regular interest payments and pay the face value of the bond at maturity.
A measure of a bond issuer's ability to repay its principal and interest as promised; An individual consumer's creditworthiness, as reported on a credit rating.
Point on a graph where two lines intersect. Crossovers may indicate a buy or sell signal.
Price (high or low) that repeats itself at the same interval over time.
Companies that are sensitive to economic performance. Cyclical stocks tend to perform well when the economy is growing and not so well when the economy contracts.
Style of trading where all positions are closed before the end of the trading day.
When the shorter moving average moves below the longer moving average.
Stock characterized by a downtrend by making subsequently lower highs and lower lows.
An employer-sponsored retirement program, funded by the employer and in which the participant receives a fixed amount of money each year in retirement. The precise amount of this pension is based on salary and length of time on the job. This contrasts with a defined contribution plan, in which the level of income available in retirement will depend on employee contributions and investment performance.
An employer-sponsored retirement program in which the participant sets aside a portion of their salary in an investment account on a tax-deferred basis. Contributions may be deductible from current income, and employers may augment savings with matching contributions. The actual value of assets available to fund retirement will depend on investment performance. Profit-sharing, employee stock ownership, 401(k), 403(b), and 457 programs are all defined contribution plans.
Price oscillator used to identify cycles in a price plot. DPO is based on the difference in price and a displaced moving average.
Indicator that plots a positive +DI line measuring buying pressure and a negative -DI line measuring selling pressure. DMI pattern is bullish as long as the +DI line is above the -DI line.
Systematic selling of a security.
Situation that occurs when two lines on a price chart move in vertically opposite directions. Positive divergence occurs when the indicator moves higher and the stock is declining. Negative divergence occurs when the indicator moves lower and the stock is rising.
Investing in several different types of funds and/or securities.
Percentage of a company's profits paid to its shareholders.
Candlestick formed when the open and close prices are the same.
Entity who gives property or assets through a trust or as an outright gift.
An index that follows the returns of 30 well-established American companies, the Dow is the most often quoted measure of U.S. stock market performance.
Price-weighted average of 30 Blue Chip Stocks published by Dow Jones & Co. DJIA stocks with the highest prices will have the more influence and those with the lowest prices.
Dow Theory buy signal is given when the Dow Industrial and Dow Transportation averages close above a prior rally peak. Sell signal is given when both averages close below a prior reaction low.
A measurement of the price volatility of a bond, representing the approximate change in price per 1% change in yield. Therefore, a bond with duration of 2 would change in price by 2% for each 1% change in yield. A higher duration indicates a higher risk of price fluctuations. Long-term bonds tend to have the greatest durations. Durations are accurate only for small changes in yields.
That which a business keep or that which a business owes after all expenditures have occurred.
Preparing for the orderly administration, management, and distribution of a person's assets and liabilities during one's lifetime and upon death. In addition to a will, an estate plan may include trusts, insurance, and other elements intended to carry out the wishes of the estate owner and improve the estate's after-tax value.
This is the approximate amount your estate will pay in estate taxes. Keep in mind that your estate may also incur state and local transfer taxes and possible generation-skipping transfer taxes. Estate planning is a very complex topic with many governing laws, so you should consult a qualified tax or legal professional for advice.
Bearish reversal chart pattern that continues an uptrend with a long candle body followed by a gapped up small candle body, then a down close with the close below the midpoint of the first candle.
First day of the ex-dividend period. If an investor does not own the stock before the ex-dividend date, they will not be eligible for the dividend payout.
Price gap that occurs at the end of a trend, signaling that the trend is concluding.