Glossary of Stock Investing Terms: B
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This article is from the Glossary of Stock Investing Terms.
Glossary of Stock Investing Terms: B
- Balance sheet:
A company's financial statement that reports its assets, liabilities, and net worth at a specific time. Liabilities always equal assets, hence the name "balance sheet."
- Basis :
Also known as cost basis or tax basis. A security's basis is the purchase price after commissions or other expenses, and is used to calculate capital gains or losses when the security is eventually sold.
- Bear:
An investor who believes that a stock or the market in general will decline. A bear market is an extended period of falling prices in the overall market.
- Beta:
Beta is a mathematical measure of a stock's risk in relation to the overall market (usually as measured by the Standard & Poor's 500 index). A beta of less than 1.0 means that the stock's price is likely to move less than the market in general; a beta greater than 1.0 means the stock is likely to move more than the market. High-beta stocks are great to own in a bull market, but not so fun to hold in a bear market.
- Bid:
The price a buyer is willing to pay for a particular stock.
- Breakout:
A technical analysis term, used to indicate a rise in a stock's price above its resistance level (such as its previous high price) or drop below its support level (commonly the last lowest price.) The assumption is that the stock will continue to move in the same direction following the breakout, which generates a buy or sell signal.
- Block trade:
A trade so large (usually 10,000 shares of stock or more) that the market cannot absorb it in a reasonable time at a reasonable price.
- Blue chip stock:
Stock in a well-established, financially-sound and stable company that has a very good record of paying dividends.
- Blue-sky laws:
In the early 1900's, a Kansas Supreme Court Justice wanted to protect investors from speculative ventures, those with no more basis than "so many feet of blue sky." Today the term refers to state regulations regarding the securities industry.
- Board of directors:
A corporation's Board is elected by stockholders to oversee the management of a company.
- Bond:
A bond is a promise made by the government or a coporation to repay funds loaned by investors at a specific rate by a specific date.
- Book value:
Usually Book Value Per Share. Calculated by dividing the Net Worth of a Company (common stock plus retained earnings) by the number of shares outstanding. This is the accounting value of a share of stock, the value of the company's assets a shareholder would theoretically receive if a company were liquidated.
- Broker:
An individual or company that charges a fee or commission for buying and selling securities. Brokers must register with the Securities and Exchange Commission as well as with states in which they do business.
- Broker-dealer:
A Broker-Dealer is a person or company in the business of both buying and selling securities. Also called an Agent when buying securities and a Principal when selling them, a may act as wither but not in the same transaction. Broker-Dealers must register with the Securities and Exchange Commission as well as with states in which they do business.
- Bull:
An investor who thinks the market or a specific security or industry will rise. A bull market is an extended period in which the market consistently rises.
- Business cycle:
The cycle of economic growth and decline. There are four stages in the business cycle: expansion, growth, contraction and recession.
- Buy and hold:
A long-term investing strategy in which an investor's stock portfolio is fully invested in the market all the time.
- Buyout :
The purchase of a company or a controlling interest of a corporation's shares. A leveraged buyout is accomplished with borrowed money.
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