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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 #

D

DA - 1) Deposit Account; 2) Documents against Acceptance.
Dated Date - The first day that interest starts to accrue on newly issued bonds.
Date of Record - 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.
Day Order - An order that, if not executed on the day it is entered, expires at the close of that day’s trading.
Day Trade - The buying and selling of the same security on the same day.
D & B (Dun and Bradstreet) - Company that provides subscribers with a ratings directory and credit reports of corporations. It also publishes financial composite ratios and offers an accounts receivable collection service. Moody's Investors Service, which rates bonds and commercial paper, is a subsidiary of D & B.
DBO - See Delivery Balance Order.
DEA (Designated Examining Authority) - A self-regulatory body that has surveillance responsibility for specific broker-dealers. As some firms have memberships on several exchanges, and in the NASD and MSRB, one regulator is designated to a firm.
Dealer - A firm that functions as a market maker and that, as such, positions the security to buy and sell versus the public and/or brokerage community.
Dealing Day - A day on which the Net Asset Value per Share is determined on the basis of the last available prices on the Luxembourg Business Day preceding the Valuation Date.
Debenture Bond - A debt that is issued by a corporation and that is backed or secured by the good name of the issuing company.
Debit Balance - The amount of loan in a margin account.
Debt/Equity Ratio - Long-tern 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.
Debt Obligation - Bond, note or money market instrument issued to borrow funds for both long- and short-term financing with a defined repayment obligation.
Decile Rank - Performance over time, usually rated on a scale of 1 to 10. One indicates that a mutual fund's return was in the top 10% of funds being compared, while 3 means the return was in the top 30%.
Declaration Date - The date on which a firm's directors meet and announce the date and amount of the next dividend.
Deductible - The amount an individual must pay out of pocket before an insurance company's coverage kicks in. Typically, insurance policies with low deductibles have higher payments, while higher deductibles usually mean lower payments.
Deed of Trust - The trust agreement drawn up when a corporation plans to issue bonds or other debt securities. It includes such items as assets, interest payments, maturity dates, etc. Also, see indenture.
Default - An issuer’s failure to pay interest.
Defensive Stocks - Stocks whose prices stay stable when the market declines and are issued by industries that naturally do well during recessions. Food and utility companies are defensive stocks.
Defensive Investment strategy - A method of portfolio allocation and management aimed at minimizing the risk of losing principal. Defensive investors place a high percentage of their investable assets in bonds, cash equivalents, and stocks that are less volatile than average.
Deferred Annuity - An annuity plan in which payments are to be made at some set date in the future.
Deferred Equity Securities - Warrants and convertible securities are issued to enable stockholders to buy a specific number of shares of common stock at a specified price within a certain time period (as in the case of warrants), or to exchange them for a certain number of shares of common stock (as in the case of convertibles). The firm ends up with more equity in its capital structure and the number of shares outstanding increases.
Deferred (Income) Taxes - A non-cash expense that provides a source of free cash flow. An amount allocated during the period to cover tax liabilities that have not yet been paid.
Defined Benefit Plan - A company retirement plan in which you expect to receive a fixed amount on a regular basis from your employer, i.e. a pension. The employer is responsible for investing.
Defined Contribution Plan - A Company retirement plan that provides employees the opportunity to set aside before-tax income to save for retirement. These plans include 403(b) plans and 401(k) plans. Defined contribution plans do not guarantee a retirement benefit. The company may match a portion of the employee's contributions, but the ultimate benefit of these plans depends on employee contributions.
Delayed Opening - The postponement of the start of trading in a stock beyond the normal opening of a day's trading because exchange officials judge that market conditions justify such a delay. Such market conditions may be caused by a great influx (or an extreme imbalance) in buy and sell orders, or pending corporate news that requires time for dissemination.
Delivery - The physical exchange of money and securities on the brokerage transaction's settlement date. Industry standards stipulate what is an acceptable condition for the securities being delivered--otherwise known as being in "good deliverable form."
Delivery Balance Order (DBO) - An order issued by the clearing corporation to any firm that, after the day's trades are netted, has delivery or sale position remaining. The order defines what is to be delivered to whom.
Delivery Versus Payment (DVP) - Settlement of security transactions used by institutional customers. Certificates are delivered to a bank designated by the customer whereupon the bank makes payment on delivery.
Dependent - Anyone who depends on another individual for their financial livelihood, such as children and relatives without significant incomes of their own.
Depository - A central location for keeping securities on deposit.
Depository Trust Company (DTC) - A central securities certificate repository that is a member of the Federal Reserve System and is industry-owned. The New York Stock Exchange is the majority owner. DTC members deliver securities to each other via computerized debit and credit entries. This reduces the need to actually move paper certificates.
Depreciation - 1) A non-cash expense that provides a source of free cash flow. 2) The amount allocated during the period to amortize the cost of acquiring long-term assets over the useful life of the assets.
Deregulation: The process of allowing utility companies to engage in open competition to offer customers new and expanded services, as ushered in by revised state legislation.
Derivative Instrument - Financial instrument whose price is based on an underlying security--for example, an option's value can be derived either from its underlying stock, stock index, or future (dependent upon the type of option).
Derivatives - A derivative security is an equity, debt, or futures instrument stemmed from specific underlying securities or commodities. It also is defined as a financial instrument that is traded separately and has value determined by another security.
Derivative Security - A financial security, such as an option or a future, whose value is derived in part from the value and characteristics of another security, the underlying security.
Derivatives Risk - A small investment in derivatives could have a potentially large impact on a fund's performance. The use of derivatives involves risks different from, or possibly greater than, the risks associated with investing directly in the underlying assets. Derivatives can be highly volatile, illiquid and difficult to value, and there is the risk that changes in the value of a derivative held by the fund will not correlate with a fund's other investments.
Derivative Zeros - Zero coupon bonds created by stripping coupon and principal payments from a U.S. Treasury Security.
Designated Order Turnaround (DOT) - An order routing and execution reporting system of the NYSE.
Detrend - To remove the general drift, tendency or bent of a set of statistical data as related to time.
Diagonal Spread - A spread of the same class of options but with different exercise prices and different expiration dates.
Difference From S&P - A mutual fund's return minus the change in the Standard & Poor's 500 Index for the same time period.
Differential - The fraction of a point added to the purchase price or subtracted from the sale price of odd lot orders. The charge represents compensation to the dealer/specialist for executing the odd lot order.
Dilution - Diminution in the proportion of income to which each share is entitled.
Director - A corporate board member elected by stockholders.
Direct Investment - Investment forwarded by a client directly to the processing bank, instead of a dealer, and is applied to the account to purchase shares. Price is determined by receipt date.
Direct Rollover - Process by which an eligible rollover distribution is paid directly to an IRA or IRA Rollover Account from the employer-sponsored retirement plan, avoiding the 20% income tax withholding requirement.
Disclosure - All information provided to investors that might bear on an investment decision or otherwise define a security offering. Federal rules and regulations govern required disclosures pertaining to various kinds of securities offerings.
Disclosure Statement - Statement sent to all clients with Individual Retirement Accounts (IRA) describing the income tax consequences associated with this plan.
Discount - When the market price of a newly issued security is lower than the issue price.
Discount Rate - 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.
Discretionary Account - A client account in which the account executive is permitted to buy and sell securities for the client without the client’s prior permission. The opening of such an account requires the special permission of the firm’s management.
Discretionary Income - The amount of money left after meeting necessary expenses.
Disposable Income - Money available after taxes have been deducted. Disposable income is the total amount available for both regular expenses and investment opportunities.
Distribution Option - Code that indicates whether dividends and capital gains are paid in cash or reinvested in additional shares.
Distributions - 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.
Distributing Fund - These funds tend to distribute the net income to the client each year e.g. gross income, net income, realized gains.
Distribution Yield - The most recent month's dividends annualized and divided by the period ending NAV. By comparison, the 12-month yield is the sum of the last 52 weeks of dividends divided by the period ending NAV.
District Business Conduct Committee (DBCC) - Part of the NASD that investigates, reviews, and renders a verdict on customer complaints or other industry improprieties.
Divergence - When two or more averages or indices fail to show confirming trends.
Diversification - Diversification is the concept of spreading your money across different types of investments and/or issuers to potentially moderate your investment.
Diversified Investment Company - Open- or closed-end fund or unit trust that under the Investment Company Act of 1940, is managed not having more than 5% of its assets in the securities of any one issuer or commodity and may not own more than 10% of the voting shares of any one issuer, with 75% of the fund's total assets cash, cash equivalents or securities.
Dividend Reinvestment  - Dividends that are reinvested in the security that generated them.
Dividends - Mutual fund dividends are paid out of income from the fund's investments. The tax on such dividends depends on whether the distributions resulted from interest income, or dividends received by the fund.
Dividends Per Share - Dividends paid for the past 12 months divided by the number of common shares outstanding, as reported by a company. The number of shares often is determined by a weighted-average of shares outstanding over the reporting term.
Dividend Yield (Funds) - Indicated yield represents return on a share of a mutual fund held over a specified period, usually 12 months.
Dividend Yield (Stocks) - Indicated yield represents annual dividends divided by current stock price.
DK (Don't Know Notice) - Brokerage lingo used when dealers, or dealer to custodian, compare a transaction and the trade is unknown by one side. When a dealer receives a comparison for a trade that it does not recognize, the dealer will send the other party a DK notice.
DNR (Do Not Reduce) - An instruction that informs the order handling personnel not to reduce the price of the order by the amount of dividends, if and when paid by the corporation. DNR is placed on buy limit, sell stop and sell stop limit GTC orders.
Dollar-Cost-Averaging - With dollar-cost-averaging, you invest a fixed amount on a regular basis - regardless of the current market trends. The investor buys more shares when the price is low and fewer shares when the price is high; the overall cost is lower than it would be if a constant number of shares were bought at set intervals. Dollar-cost-averaging does not assure a profit or protect against a loss in a declining market. You must continue to purchase shares both in market ups and downs. The goal of dollar-cost-averaging is to attain a lower average cost per share.
Dollar-Denominated - Foreign securities that pay interest and principal in U.S. dollars.
Domicile - Region where a person has established permanent residence.
Double Taxation - Corporations pay taxes on revenue before paying dividends. The dividends, in the hands of the stockholder, are taxed again as ordinary income. Hence "double" taxation.
Dow Jones Industrial Average (DJIA) - Average of the prices of 30 well-known, predominantly blue-chip, industrial stocks. 
Downgrade - A negative change in ratings for a stock and/ or other rated security.
Downstairs Trader - A trader who operates on the floor of an exchange and who "trades" positions against the public market. See also Upstairs Trader.
Downtick - A listed equity trade whose price is lower than that of the last different sale.
Due Diligence Meeting - The last meeting between corporate officials and underwriters prior to the issuance of the security. At the meeting, the content of the prospectus is discussed, and relevant parts of the underwriting are put into place.
Duration - A measure of the price volatility of fixed-income securities, duration is the weighted average of the present values of all the cash flows associated with a fixed income security, expressed in years.