Trade Programs Definition

(1) Trade based on signals from a computer program, usually entered directly from the trader's computer to the market's computer system and executed automatically.

(2) An order requiring the execution of trades in a large number of different stocks at or near the same time. Also called a basket trade.

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Profit Taking Glossary Definition

The act of selling stock, convertible securities, and/or bonds which have appreciated in value to translate a paper profit into a realized gain. Often used to explain the reason for a market decline after a noticeable run-up in prices.

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Popular Offering Price

Popular Offering Price Definition

Popular Offering Price. The lowest price at which any investor or dealer has declared that he/she will sell a given security or commodity.

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The Trading Pit

The Trading Pit Definition

A specific area of the trading floor that is designed for the trading of an individual futures or options contract.

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Common Stock Par Value

Common Stock Par Value Definition

(1) For bonds, the amount that the issuer agrees to pay at the maturity date. Also called the maturity value or face value of a bond.

(2) For common stocks, an arbitrary dollar amount assigned to each share by the company's charter.

Par value has little or no impact on the actual market value of a security. However, it is important in the case of preferred stocks and bonds, since the preferred dividend and interest are often based on the par value assigned to each issue. For example, an 8% bond is a promise to pay that percentage of the bond's par (100% of face value) value annually.

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Paper Profits | What does it mean to have a Paper Profit?

Paper Profits

Paper Profits Definition

A profit still existing in the security on paper, which has not yet been sold and therefore realized.

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Investment Opportunity Cost

Investment Opportunity Cost Definition

The difference in the performance of an actual investment and a desired investment adjusted for fixed costs and execution costs. The performance differential is a consequence of not being able to implement all desired trades.

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Brokerage Operations

Brokerage Operations Definition

(1) In an investment management business, the collection of processes and procedures associated with account set-up, portfolio accounting, record keeping, portfolio rebalancing, trading, and related systems support.

(2) A business unit that offers clients assistance with operations related issues, such as investment account set-up, portfolio adjustments, systems support, and trading. Also called simply "Ops."

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The Opening Bell

The Opening

The Opening Bell Definition

The period at the beginning of a trading session officially designated by the exchange during which all transactions are considered made "at the opening."

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Opening Price

Opening Price Glossary Definition

The range of prices at which the first bids and offers were made or first transactions were completed.

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Net Price Change

Net Price Change Definition

The difference between a day's last trade and the previous day's last trade.

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Fund Net Asset Value NAV

Fund Net Asset Value NAV Definition

Net Asset Value.

(1) The net value of one share of a fund's investments.

(2) For example with a mutual fund, the net asset value per share usually represents the fund's market price, subject to a possible sales or redemption charge. For a closed end fund, the market price may vary significantly from the net asset value.

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Negotiable Security

Negotiable Security Definition

A stock or bond certificate or other evidence of debt, the title to which is freely transferable at delivery, e.g., coupon bonds, bankers acceptances.

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National Association of Securities Dealers NASD

National Association of Securities Dealers

National Association of Securities Dealers NASD

National Association of Securities Dealers. An association of brokers and dealers in the over-the-counter securities business organized to "adopt, administer, and enforce rules of fair practice and rules to prevent fraudulent and manipulative acts and practices, and in general to promote just and equitable principles of the trade for the protection of investors."

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Stock Market Share Price

Stock Market Share Price Definition

Also known as Market Value.

(1) For securities, the last reported price at which a stock or bond sold.

(2) The highest price which a buyer, willing but not compelled to buy, would pay, and the lowest a seller, willing but not compelled to sell, would accept.

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Investing Long

Investing Long Definition

(1) An ownership position in securities with the actual certificate held by the investor and/or his/her custodian.

(2) One who has bought a contract to establish a market position and who has not yet closed out this position through an offsetting sale; the opposite of short.

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Stock Liquidation Liquidity

Stock Liquidation & Liquidity Definition

Any transaction that offsets or closes out a long or short position. Liquidity and liquidation are very important factors to consider while analyzing investments made by hedge funds.

Often hedge funds have lock-up periods or minimum commitments which only allows for investor redemption of capital after a 3, 6 or 12 month period of time. This is because many types of assets which hedge funds sometimes invest in are not very liquid, they can be very hard to sell and large losses can be incurred if you must sell at the wrong time when there is no market for the sell order.

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Floor Trader

Floor Trader Glossary Definition

A member who generally trades only for his/her own account, for an account controlled by him/her, or who has such a trade made for him/her. Also referred to as a local.

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Trading Floor

Trading Floor Glossary Definition

The trading area where stocks and bonds are bought and sold on an exchange.

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Fill or Kill Order

Fill or Kill Order Definition

A trading order that is canceled, unless executed within a designated time period.

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Execute an Order

To fulfill an order to buy or sell. When an execution is referred to as "good," it generally means that both the broker and the customer are satisfied that the price obtained is fair.

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Ex Dividend Date

Ex-Dividend Date Definition

(1) In the US stock market, the first day of trading when the seller, rather than the buyer, of a stock will be entitled to the most recently announced dividend payment. This date set by the NYSE (and generally followed on other US exchanges) is currently two business days before the record date. A stock that has gone ex-dividend is marked with an "x" in newspaper listings on that date.

(2) When used in reference to mutual funds, the ex-dividend date is the date on which declared distributions (dividends or capital gains) are deducted from the fund's assets before it calculates its net asset value (NAV). The NAV per share will drop by the amount of the distribution per share.

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Ex-dividend

Ex-dividend Glossary Definition

A synonym for "without dividend." The buyer of a stock sold as ex-dividend is not entitled to receive any recently declared (but not yet paid) dividends.

Normally every dividend is payable on a fixed date to all shareholders recorded on the books of the company as of a previous date of record.

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Security Downgrade

Security Downgrade Definition

A negative change in ratings for a stock, bond, or other rated security.

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Stock Dividend Yield

Stock Dividend Yield Definition

(1) For a stock, the annual dividends divided by the current market price of the stock. Expressed as a percent.

(2) For a mutual fund, the return on a share of the fund held over the past 12 months. The dividend yield reflects the effect of sales charges (at current rates), but not redemption charges.

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Discretionary Account

Discretionary Account Glossary Definition

Accounts over which an individual or organization, other than the person in whose name the account is carried, exercises trading authority or control.

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Discount Stock Price

Discount Stock Price Definition

(1) The difference between the original offering price of a security and the price to which it may fall in the "after offering" market.

(2) The amount by which a security sells below its face value (par value). A $1,000 par value bond selling at 95 (worth $950) would be selling at a $5 or 5% discount. The opposite of premium.

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Securities Dealers

Securities Dealers Definition

(1) An individual or firm in the securities business acting as a principal rather than an agent. Typically, a dealer buys for his/her own account and sells to a customer from his/her own inventory.

(2) An entity that stands ready and willing to buy a security for its own account (at its bid price) or sell from its own account (at its ask price).

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Stock Day Trading - Overview

Stock Day Trading

Stock Day Trading Definition

Refers to establishing and liquidating the same position or positions within one day's trading. A highly popular tactic during the technology bull run in the mid 2000's many funds take an institutional risk adjusted approach to day trading by focusing on momentum and technical factors to enter and close out positions within just minutes.

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