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A B C D E F G H I J K L M N O P Q R S T U V W X Y Z #

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Baby Bond - Bond with a face value of less than $1,000.
Back-End Load - A fee charged by a mutual fund when you sell your shares.
Back Office - Those departments of a broker-dealer that are not directly involved in sales or trading. Some back office functions include cashiering, accounting, and the record keeping of clients' cash or margin accounts.
Balanced Funds - Mutual funds that invest in both stocks and bonds in an attempt to provide investors with growth and income.
Balance Sheet - An accounting statement reflecting the firm’s financial condition in terms of assets, liabilities, and net worth (ownership). In a balance sheet, Assets = Liabilities + Net Worth
Banker's Acceptance - A short-term credit investment created by a non-financial firm and guaranteed by a bank as to payment. Acceptances are traded at discounts from face value in the secondary market. These instruments have been a popular investment for money market funds.
Bankruptcy - The financial state of being unable to pay debts. Federal bankruptcy laws provide for either the reorganization or liquidation of corporate business and assets to pay some creditors.
Basis - The total cost an investor pays to acquire a security or asset. For tax purposes it is used to determine capital gains or losses when the asset is sold.
Basis Points - A relationship between a bond’s price and a yield subdivided into hundredths. One hundred basis points equals 1 percent interest yield.
Basis Price - A method of pricing municipal bonds, T bills, and certain other instruments. It is an expression of yield to maturity.
BD Form - Document that broker-dealers must file and keep current with the SEC. It provides details about the firm's principals and officers, net capital compliance, and financial statements.
Bear - Investor who believes an individual security, an industry segment, or the overall market will decline.
Bearer Bond - Security issued with small detachable certificates entitling the holder to the interest due. Also known as Coupon Bond.
Bearer Stocks/Shares - Securities for which no register of ownership is kept by the company. A bearer certificate has an intrinsic value. Dividends are not received automatically from the company but must be claimed by removing and returning "coupons" attached to the certificate.
Bear Market - A market in which prices are generally declining.
Bear Raid - A situation in which traders sell short a security with the intention of driving the prices down.
Benchmark - A predetermined set of securities based on published indices or customized to suit an investment strategy to be used for performance comparison.
Beneficial Owner - The owner of a security who is entitled to all the benefits associated with ownership. Customers’ securities are often registered not in the name of the customer but rather in the name of the brokerage firm or central depository. Even so, the customer remains the real or beneficial owner.
Beta - This is a coefficient measuring a security's relative volatility. The beta is the covariance of a stock in relation to the rest of the stock market. For example, the Standard & Poors' (S&P) 500 Stock Index has a coefficient of 1. Any stock with a Beta greater than 1 is more likely to rise and fall with more volatility than the general market, and a Beta of less than 1 is more likely to rise and fall with less volatility than the general market.
Beta Coefficient - Analysis of a stock's price movement in relation to the rest of the stock market.
Beta Equation (Mutual Funds) - The beta of a fund is determined as follows: [(n) (sum of (xy)) ] - [ (sum of x) (sum of y)] [(n) (sum of (xx)) ] - [ (sum of x) (sum of x)], where: n = # of observations (36 months), x = rate of return for the S&P 500 Index, y = rate of return for the fund.
Beta Equation (Stocks) - The beta of a stock is determined as follows: [(n) (sum of (xy))] - [(sum of x) (sum of y)] [(n) (sum of (xx))] - [(sum of x) (sum of x)], where: n = # of observations (24-60 months), x = rate of return for the S&P 500 Index, y = rate of return for the stock.
Bid - The highest price anyone has declared that they want to pay for a security at a given time.
Block Trade - Usually, a trade of 10,000 shares or more. For bonds, a $200,000 face amount or more. Block trades are often executed through a special section of a brokerage firm called the Block Desk. Using the Block Desk may result in a better price.
Blotter - A log in which daily activities are recorded. Such daily activities include orders placed and executed and, securities received or delivered.
Blow-Off Top - A steep and rapid increase in price followed by a steep and rapid drop in price. This is an indicator seen in charts and used in technical analysis of stock price and market trends.
Blue Chip - A term used to describe the common stocks of corporations with the strongest of reputations. (In poker, the blue chip is usually assigned the highest money value.)
Blue Sky Laws - State regulations governing the sale of securities in the individual 50 states. They set forth securities registration requirements and generally are designed to protect the state's investors against securities fraud.
Board of Directors/Trustees - Responsible for the overall management and supervision of business organizations, including investment companies.
Bond - A debt instrument; a security that represents the debt of a corporation, a municipality of the federal government, or any other entity. A bond is usually long-term in nature (10 to 30 years).
Bond Fund - Type of mutual fund that invests in bond and preferred stocks with the idea of providing a stable income with a minimum of risk.
Bond Yield Curve - This is a graphical representation of the current relative structure of interest rates payable on similar securities of different maturities.
Bond Yield Spreads - Municipal bonds normally carry the lowest market rates because of the tax-exempt feature of the obligations. Historically, their yields have traded at about 75–80% of Treasuries. In the taxable sector, treasuries have the lowest yields (because of the underlying government guarantee) followed by other government and agency paper, and then corporate bonds. For those issues that normally carry agency ratings (such as municipalities or corporates), generally the lower the agency rating, the higher the yield.
Book Entry - Electronic record of ownership of Treasury and agency securities as opposed to receipt of a security’s certificate.
Book Entry Securities - Securities that are registered to an owner without the issuance of a physical certificate. Ownership is reflected by an entry in the issuer's books. This method of registering securities has grown in popularity because investors need not worry about the location of their certificates and it requires less paperwork for a brokerage firm.
Book/Share - The current fiscal year book value (or net equity for the corporation) per share of common stock.
Book Value - A value computed by subtracting the total liabilities from the value of all assets on the balance sheet, then dividing by the number of common shares. This is an accounting term that has no relation to the securities market value.
Bottom-Up Approach to Investing - An investment approach whereby an investor will search for individual stocks that are performing well. This approach assumes that individual corporations can do well even though its industry is not doing well.
Breadth of the Market - A measurement of the number of issues that advance or decline on a particular trading day.
Breakout - A rise in a security's price above a resistance level (commonly its previous high price) or drop below a level of support (commonly the former lowest price.) A breakout is taken to signify a continuing move in the same direction. Breakout can be used by technical analysts as a buy or sell indication.
Breakpoint - A purchase of shares in an open-end investment company mutual fund that is large enough to entitle the buyer to a lower sales charge. A series of breakpoints is established by the fund, at each of which the charge is reduced.
Broker - (1) An individual who buys or sells securities for customers (a stockbroker). (2) On an exchange, one who executes public orders on an agency basis (a floor broker or commission house broker). (3) As a slang term, a firm that executes orders for others (a brokerage firm).
Brokerage Firm - A partnership or corporation that is in business to provide security services for a general marketplace.
Broker Call Rate - Interest rate at which brokerage firms borrow from banks to finance their clients' security positions.
Brokered CD - Certificate of Deposit (CD) that is issued by a bank and bought in bulk by brokerage firms who resell them to their customers. Brokered CD's may pay as much as 1% more than those sold directly by banks, carry federal deposit insurance up to $100,000, are liquid on a secondary market made by the broker, and investors are not charged a commission.
Broker Loan Rate - Interest rate charged to brokers when borrowing funds from banks to cover their clients' security positions. The rate is usually approximately a point above short-term interest rates such as the federal funds rate. Broker loans are callable on 24-hour notice. Hence, the broker loan rate is sometimes called the "call loan rate."
Bull - Investor who believes an individual security, an industry segment, or the overall market will rise.
Bullish - Term used to describe rising security prices.
Bull Market - A market in which prices are generally rising.
Business Day - A day on which the exchanges are open for business. In determining settlement dates for regular way securities transactions--trade date plus 3 business days--weekends and legal holidays are not counted.
Buy - Purchase of a security.
Buy And Hold Strategy - Strategy whereby an investor acquires shares of a corporation over many years.
Buy-In - When the seller of a security fails to deliver the security, the buyer purchases the security on the open market and charges any loss to the seller’s account.
Buying On Margin - Buying securities on credit in an established margin account at a brokerage firm.
Buying Power - Value of margin eligible securities that may be purchased in a margin account. Determined by doubling the sum of the cash held in the brokerage account and the loan value of margined securities.
Buyout - The purchase of a controlling interest (or percent of shares) of a company's stock.
Buy Stop Order - Buy order for a listed security that stipulates that it be held until the security's market price rises to the stop price. Once the stop price is reached, the order is considered to be a market order to buy at the best available price.
Buy/Write - An advanced option order that combines the purchase of an equity and the sale of a call option on the same underlying security.