Glossary of Financial Terms

Glossary of Financial Terms: A

Alpha A measure of selection risk (also known as residual risk) of a mutual fund in relation to the market. A positive alpha is the extra return awarded to the ...

Glossary of Financial Terms: B

Back office Brokerage house clerical operations that support, but do not include, the trading of stocks and other securities. Includes all written confirmation and ...

Glossary of Financial Terms: C

Call option An option contract that gives the holder of the option the right (but not the obligation) to purchase, and obligates the writer to sell, a specified ...

Glossary of Financial Terms: D

Day order An order to buy or sell stock that automatically expires if it can't be executed on the day it is entered. Debt/equity ratio ...

Glossary of Financial Terms: E

Earnings Net income for the company during the period. Earnings per share (eps) Also referred to as Primary Earnings Per Share. Net ...

Glossary of Financial Terms: F-G

Fund family The management company that runs and/or sells shares of the fund. Fund families often offer several funds with different investment objectives. ...

Glossary of Financial Terms: H

Head shoulders In technical analysis, a chart formation in which a stock price reaches a peak and declines, rises above its former peak and again declines and ...

Glossary of Financial Terms: I

Indicated dividend Total amount of dividends that would be paid on a share of stock over the next 12 months if each dividend were the same amount as the most recent ...

Glossary of Financial Terms: L

Last split After a stock split, the number of shares distributed for each share held and the date of the distribution. Limit order An ...

Glossary of Financial Terms: M

Management/closely held shares Percentage of shares held by persons closely related to a company, as defined by the Securities and Exchange Commission. Part of these ...

Glossary of Financial Terms: N

Net asset value (NAV) The value of a fund's investments. For a mutual fund, the net asset value per share usually represents the fund's market price, subject to a ...

Glossary of Financial Terms: O

Objective (Mutual Funds) The fund's investment strategy category as stated in the prospectus. There are more than 20 standardized categories. ...

Glossary of Financial Terms: P

Payment date Date on which a declared stock dividend or a bond interest payment is scheduled to be made. Phone switching In mutual ...

Glossary of Financial Terms: Q-R

Quick ratio Indicator of a company's financial strength (or weakness). Calculated by taking current assets less inventories, divided by current liabilities. Also ...

Glossary of Financial Terms: S

Sales charge The fee charged by a mutual fund when purchasing shares, usually payable as a commission to amarketing agent, such as a financial advisor, who is thus ...

Glossary of Financial Terms: T

10-K Annual report required by the SEC each year. Provides a comprehensive overview of a company's state of business. Must be filed within 90 days after fiscal year ...

Glossary of Financial Terms: U-V

Uncovered call A short call option position in which the writer does not own shares of underlying stock represented by his option contracts. Also called a naked ...

Glossary of Financial Terms: W

Wallflower Stock that has fallen out of favor with investors; tends to have a low P/E. Wanted For Cash A statement displayed on market ...

Glossary of Financial Terms: Y

Yield The percentage rate of return paid on a stock in the form of dividends, or the rate of interest paid on a bond or note. Yield to ...