A 403(b) is an alternative retirement plan to a 401(k) plan offered by non-profit organizations, rather than corporations.
Absolute Breadth Index is a market indicator used to determine volatility levels in the market without factoring in price direction.
Account Payables Management refers to the set of policies, procedures, and practices employed by a company with respect to managing its trade credit purchases. It is an important working capital amount that can enhance a company’s short-term cash flow position.
Account Receivables Management refers to the set of policies, procedures, and practices employed by a company with respect to managing sales offered on credit. If efficient, receivables management can lead to good sales growth, healthy cash flows, profitability, and stable operating cycles.
Advance/Decline Index is a technical analysis tool that represents the total difference between the number of advancing and declining security prices. This index is considered one of the best indicators of market movements as a whole.
An Aggressive Growth Fund is a form of Mutual Fund whose main investment objective is to achieve capital gains.
An all-or-none order is an order type that only executes when the full amount of the shares in the order can be executed.
AMEX is the third largest Stock Exchange in the US by trading volume.
Arbitrage is the simultaneous purchase of a security on one stock market and the sale of the same security on another stock market at prices which yield a profit.
The Arms Index is a technical analysis indicator that compares advancing and declining stock issues and trading volume as an indicator of overall market sentiment.
An ascending flag is a continuation pattern formed by two straight upward parallel lines which are shaped like a rectangle. It is adjusted in the direction of the trend that it consolidates.
The ascending triangle is a bullish continuation pattern. This pattern is made by two converging lines. The first line is an upward slant which is the support and the other is a horizontal resistance line.
The price, aka “the ask”, is the lowest price that a seller is willing to accept for a security.
An asset is anything that has monetary value and can be sold. Assets can be anything from a pencil (though it is not worth much) to a skyscraper to things like Stocks and ETFs.
“Asset Allocation” is how you have divided up your investments across different assets. You can have all your assets in one place, or you can use diversification to spread them around to reduce risk.
Asset Turnover Ratio is the amount of sales generated for every dollar’s worth of assets.
At The Money refers to an option whose strike price equals the price of the underlying equity, index or commodity.
ADX is an indicator used in technical analysis as an objective value for the strength of trend.
The balance sheet is a financial snapshot of the firm on a specific date – specifically their assets, liabilities, and shareholder equity
A Balanced Fund is a type of Mutual Fund whose main objective is to diversify risk by holding a defined percentage of different security types.
When someone talks about banking, they generally group together Banks, Credit Unions, and Savings and Loans all in one – but their differences can have a big impact on the services you get!
A Bear Market is a long period where the stock market value falls along with a sense of pessimism for the public. Read this article to learn more!
A bear spread is a strategy where you simultaneously buy a call option at Strike Price 1 (some amount higher than the current market rate), and sell a call option at Strike Price 2 (some amount lower than the current market right). This is used if the trader thinks the price of the stock will go down, but not by much. It limits both the risk and reward.
Beta measures a stock’s volatility versus the market’s volatility. Read this article to learn more and see an example of Beta.
When you are selling your shares of a security, the bid price is what the buyer is willing to pay for your shares.
The Black-Scholes formula is the most popular ways to calculate the “true” price of an option.
Block trades are greater than or equal to 10,000 shares in size and greater than or equal to $100,000 in value!
Blue Chip Stocks are from leading and nationally known companies that offer a record of continuous dividend payments and other strong investment qualities.
Blue Sky Laws are state regulations governing the sale of securities and mutual funds.
Bonds are essentially a much more formal I.O.U (I owe you) used to borrow money. You buy the bond in return to interest over a given period of time.
A box spread is an option strategy that is created by combining the components of the bull spread and the bear spread. In theory, a box spread should always have a zero profit and zero loss, but some investors use them if they see that current options prices aren’t fully “priced in”. In many cases, the commissions charged for the trades needed for this spread will be greater than the profit.
Bear ETFs short stocks to achieve their goals. Bear ETFs show gains when the underlying stocks loose value. Bull ETFs use long positions and show gains when the underlying stocks show gains.
The tendency of the stock market to trend higher over time. It can be used to describe either the market as a whole or specific sectors and securities.
A bull spread is a strategy where you simultaneously buy a long call at Strike Price 1, and sell a call for Strike Price 2 (some higher amount). Use this strategy if you think that a stock’s price will go up above your Point 1, but not as high as your Point 2.
A butterfly is a volatility bet that the trader can implement to protect against large fluctuations, or to gain on volatility.
The buy and hold strategy is essentially just what it sounds like: Purchase stocks and then hold them for an extended period of time. The underlying assumption for the buy and hold strategy is that stocks tend to go up in price over extended periods of time.
Buying on margin is borrowing money from a broker to purchase stock.
Buy-Sell Agreement is an agreement between shareholders or business partners where both parties agree to purchase or sell a stock.
Buy-Side Firms are institutions that provide advice on buying securities and assets within their own organizations.
A Call Option gives the holder the right, but not the need to purchase a fixed quantity of a particular stock at a specific price inside a particular time. Call Options are bought by investors who anticipate a price increase.
A point on a candle stick chart representing a specific time period (a day, an hour, a minute, etc) in which the underlying stock price has moved. Candlesticks will have a body and usually two wicks – one on each end.
A cap is an options protection strategy where you simultaneously have a short position on a stock and a long call for the same underlying asset. Adding a long call to your open position means that you have the right to cover your short at the strike price.
Capital Asset Pricing Model (CAPM) is a method used by investors to prioritize what stocks to invest in, given their limited cash.
Capital funding is the provision of monetary resources or capital for productive uses. Capital provided by investors or other parties is used by various entities such as governments, companies, organizations, and individuals in order to fund their functions and operations.
Profit or loss resulting from the sale of certain assets classified under the federal income tax legislation as capital assets. This includes stocks and other investments such as investment property.
By law, every year, mutual funds must distribute that year’s net investment income (the total of dividends and interest received, less fund expenses) and net realized gain (gains less losses on securities sales) to its shareholders.
Cash Conversion Cycle is defined as the length of time (in days) needed to transform inventory purchases into actual cash receipts. It takes into consideration the company’s time commitment towards collecting receivables and paying its suppliers, and is an important measure of a company’s internal liquidity.
Cash Flow Per Share is a ratio of the cash generated divided by the number of outstanding shares.
The Cash Flow Statement is one of the four financial statements required by the SEC based on the U.S. GAAP (Generally Accepted Accounting Principles). This statement presents where the cash and its equivalents are coming from and where they are being allocated.
A CD or Certificate of Deposit is one of the safest and liquid forms of investment available. Insured by the FDIC (Federal Deposit Insurance Corporation), CDs are a type of interest earning deposit account.