Trading can often seem complicated, but Mib700 are with you
as you grow. To better understand the market we strongly suggest you follow the
trading news that we provide, as well as other reputable financial news sites.
To understand the trading news you’ll need to start learning the lingo, so
we’ve put together the most commonly used words.
The interest that is accumulated on a security since the
Order that require that none of the orders to be executed
unless at a specified price.
American Stock Exchange. The main securities exchange located
in New York.
A steady reduction of a debt by payments that balance interest
The periodic charges in interest received on bonds that
offset premium prices.
Taking advantage of a market inefficiency and simultaneously
buying and selling an asset in multiple markets
to take advantage of price variances.
The valuation placed on the property
for the purpose of taxation. In some areas, the property is assessed below 100
percent of the market value.
The ratio of the assessed value of property to the full or
actual property value. Full value is the fair market value at the bid side of
the market, less an allowance for sales and other expenses. The normal standard
in California is of full value.
A trading term for an order that is to be executed at the opening
of the market or not at all. Auction Coverage The ratio of the total bids
offered in an auction to the number of accepted bids. This ratio is used to
evaluate general interest in any given auction.
The total amount of stock that a company is permitted to
issue under its charter.
The average holding period of a mortgage-backed security. Average Life is mathematically calculated
by measuring the investment time against the outstanding amount of principal
returning each month.
The practice of purchasing the same security at various
prices to arrive at a higher or lower average cost.
A book of mathematical tables used to convert
yield-to-maturity to the equivalent dollar prices at different rates of
One-hundredth of 1 percent. One hundred basis points equals
Price expressed in yield to maturity or the annual rate of
return on the investment.
A period of generally pessimistic attitudes and declining
market prices. Compare Bull Market.
The price at which an owner offers to sell (asked or offer)
and the price at which a prospective buyer offers to buy (bid). It is often
referred to as a quotation or a quote. The difference between the two is called
A unit measure for a
large number of securities.
Stocks of major companies
known for high earnings and price stability.
A daily trade publication that shows bond offerings by banks
An interest-bearing security issued by a corporation or government
that usually has a maturity greater than one year.
Short-term notes that will be later financed by the sale of
The reduced price difference between a bond's face value and
a selling price.
A legal contract authorizing a bond issue that details bondholder’s
rights and issuer’s obligations.
Securities that are maintained in computerized records of
The original price of the security plus or minus
amortization and accretion.
An option to buy an asset at a set price within a certain
period of time.
A date prior to maturity when a bond can be redeemed at the
option of the issuer.
The amount made or lost, depending on the sale price and the
The market in which individuals, corporations, banks, and governments
trade debts and equities.
A transaction requiring delivery and payment of the security
on the same day as the transaction.
Funds within the New York Clearing House Interbank Payments
Property or security used to balance against an outstanding loan.
A promissory note specifying the collateral offered by the borrower
as security against the repayment of a
Short-term, unsecured, negotiable promissory notes issued by
A debt in which all of the separate entities of an
organization are equally responsible for repayment of the debt.
Buying enough securities to gain control over the market
A bank that acts as a
depository for other banks.
An issuer’s pledge to act in the best interests of a
The ratio of income available to pay a specific obligation
versus the total amount obligated. This is a measure of a firm's financial
The amount of time left until an agreement comes to maturity.
The Committee on Uniform Security Identification Procedures,
created to develop a uniform method of identifying municipals and corporate
A one-day loan given for the purpose of purchasing
The buying or selling of securities on a specified day expires at the end of that trading session
if not used.
A bond secured only by the general credit of the issuer
rather than by a specific lien on the property,
as with a mortgage bond. Agency bonds are frequently called debentures.
A book of tables used to determine the rate of return on a
bond at a discounted.
A securities transaction by a broker acting on behalf of a
Selling large units of an asset without regard for marketplace
Securities that are exempt from the Securities and Exchange
A condition where a security is not entitled to any rights
to purchase a new issue.
Unusual circumstance for redemption occurring such as
The displayed value of a security appearing on the face of
An individual or group that acts a third party to hold in
trust an asset or property.
A flexible accounting
or tax period of 12-month period.
An asset with a fluctuating interest rate,
adjusted periodically in relation to specific market indicators.
A total amount of securities available for immediate
The unconditional guarantee of the United States government to
back the debt repayment.
General Obligation Bonds are secured in
full faith and have unlimited taxing power.
An order for securities that may be limited in terms of
price but not in terms of time. See Open Order.
The percentage of return on a security, determined by
dividing the dollar price into the annual interest payment and calculating the
return to maturity. Also, the return on an investment before deduction of
used by traders that works similarly to
insurance. Hedging can minimize losses that sometimes occur with unexpected price
fluctuations in the market. Hedging acts as a counterbalance to offset losses.
An agreement that acts as security on a loan lacking title transfer.
Describes the purchase and sale of the same security within
a short period of time to take advantage of price fluctuations.
Bonds on which an interest payment is due when the issuer
has attained sufficient income.
A written agreement used in connection with a security
issue. The document sets the maturity date, interest rate, security, and other
terms for the issue holder, the issuer, and (when appropriate) the trustee.
A collection of securities held by a bank, individual,
institution, or government agency for investment purposes.
Securities purchased for an investment portfolio, as opposed
to those purchased for resale to customers.
The price of a group of newly issued securities is put on
A guarantee to a holder of a security where liability for a
bond is enforced against all parties individually or jointly.
A list of securities where insurance companies or banks may
invest with protection afforded to the liability
and holders depositors.
An order to buy or sell a set amount of securities at a minimum price within a specified
period of time.
A condition when security can be bought or converted to cash
A securities market in where the bid price and asked price
are the same.
The London Interbank Offered Rate. An interest rate on
deposits traded between banks that depends on the maturity of the deposit and
which bank gives the rate.
A financial specialist permitted to act as a dealer in the
capacity of a block positioner, willing to buy and sell a security on a regular
or continuous basis.
The difference between a pledged collateral to secure a loan
and the amount of the actual loan.
An order to buy or sell a security at the market asking
The period of time between an issue date and a due date when
the principal becomes due and payable.
Short-term securities that hold a market price closely tied to current interest rates, as opposed
to a company's standing.
Moral Obligation bond comprises a structure that is subject to legislative
appropriation and describes a promise to make up any shortfalls in a debt.
Securities issued by an agency
or a state where the interest is exempt from federal income tax, state tax, and
local income tax.
Municipal Securities Rulemaking Board. Registered under the
Maloney Act in 1975, MSRB is designed to create rules and regulations for
municipal bond trading among brokers, dealers, and banks.
National Association of Securities Dealers. A
self-regulatory organization that regulates the over-the-counter market.
Negative carry is a circumstance that occurs when the cost
of a loan for financing security holdings is in excess of the income on those
Net Interest Cost. The average interest rate over the life
of a bond that an issuer must pay in order to borrow.
The market for new issues of securities, as opposed to the
secondary market, in which securities that have already been issued are sold.
A corporation operated by a board of directors responsible
for observing member activities, supervising the exchange in its entirety, setting
policy, listing securities, and judging new applicants intending to hold specialist
A statement issued by an attorney that no legal suits are
pending against the issuer, nor any threat of litigation that might affect the
validity of the bonds.
Securities that do not conform to a state's legal list of
Describes a security that has a none-transferable title or
The price at which a new issuer
will offer securities to investors.
The buying or selling of a security to counterbalance the purchase
or sale of a similar security.
An order to buy or sell a security at a specified price within
a certain time limit.
The right to trade a security during a specified period of
A right to retire or drop an issue prior to the stated
A municipal bond treated as tax-exempt income rather than
capital gain that qualifies for special treatment under federal tax law.
a security or a market that has suffered a sharp rise or
fall due to volatile buying or selling, or oversold creating inflated or
An amount that will likely not be collected, but included in
the general property tax to cover abatements and taxes.
A securities market in which dealers negotiate directly, instead
of through an organized securities exchange auction.
Unrealized capital gain or loss on a security, based in comparison
with market price and the original cost of the security that appreciates or
depreciates when sold.
The value of a security displayed at a specific amount
marked on the amount of money due at the maturity date.
The reduction of debt when the amount of a new issue is less
than the maturing issue.
A commercial entity or bank that dispenses the principal and
interest payable on a maturing issue.
Securities owned by a Bank
that is pledged as collateral for deposits by a government, specified by law.
A condition where the yield of a security is larger than the
cost of borrowing funds.
The price paid for a security that exceeds par value and
must be paid to call or refund an issue before maturity.
An unscheduled payment on a security that acts as collateral
against a mortgage-backed security.
The recognized demand for any and all first issues of
A financial statement that is based on assumptions made on previous
account relationships that can indicate a possible change in the future
pertaining to financial development.
An official document issued by a registered company prior to
the sale or sales of a new issue of securities which gives a detailed information
package about a company, their offering,
and prospects, and includes possible risks, as per the requirements of the
Securities and Exchange Commission.
A long-standing common-law rule that requires a trustee such
as an investor who is acting on behalf of another party to behave prudently with
reasonable discretion to preserve of capital.
The Public Securities Association prepayment is a model
commonly used in the mortgage-backed securities market to measure prepayment
speeds. A 100% PSA model indicates that a new mortgage will prepay at a specified
annualized rate in the first month and increase in percentage point each month
until the 30th month.
A sharp rise in the price of a security or a rapid recovery
in the market.
The returning yield that is attained on a security, based on
its purchase price or its current market price, the rate of return being the
amortized yield to maturity or current return. Also
refers to income earned on an investment, expressed as a percentage of the cost
of the investment.
Liquidating debt that occurs when an outstanding obligation
is dropped or retired, which often occurs at maturity but commonly occurs at
the issuer's preference when an asset is
retired in advance of the maturity date.
A fund that is created for the specific purpose of retiring
a “callable” obligation that is maturing in stages and will only later become
The price at which a bond is redeemed at the issuer's option
prior to maturity.
A bond that has a principal or interest payable only to a
person or an organization that is registered with the issuer, and can be
transferred when endorsed by the owner.
A state bond or local bond secured by revenues deriving from
the operations of public enterprises that act like a bridge, and are not
generally backed by the issuer unless specified in the bond indenture.
To immediately reinvest in a new issue of a similar security
after receiving funds from a matured security.
A measuring term that describes a normal minimum unit of trading for
a specific issue or type of security.
The act of holding securities in a bank vault for security
and protection, commonly provided by service banks to customers for without
A market in which previously issued securities are commonly traded, purchase, or sold as a special offering or through
regular channels of trading.
A loan that is known to be secured by a marketable valuable
The Securities and Exchange Commission is an agency created
by Congress and is tasked with the responsibility to regulate securities and
trading and enforce various securities acts intended to protect investors.
Someone such as an individual or a firm that buys and sells
securities for their own trading account, and acts as principal by taking the title
of the securities until they are able to be sold to someone else.
A debt that has certain requirements pertaining to the
support of taxes that have been designated for repayment and cannot be used for
any other purpose.
A security that is being quoted at a price level less than what
has been quoted for similar securities.
Bonds serialized as a single issue that has different maturities dates over a long
period of time which allows the issuer the opportunity to retire the issue in
small amounts with some flexibility.
Buying back certain securities that were previously sold, to
make delivery of a short sale.
The selling of securities that are not actually owned by the
seller, who is operating on the expectation that the security can and will be borrowed
or bought from a broker in time to be delivered to the buyer.
A reserve fund isolated or set aside for a period of time
for the specific purpose of liquidation or retirement.
A commission of sorts that is calculated by the difference
between two figures or percentages, such as bid price and ask price of a quote,
or between the amounts paid when a security is bought and the amount received
The bottom price that the US. Treasury will accept for a new
issue of notes, bills, and bonds in a particular auction that is subject to an
agreement to purchase a certain offering for a specific price. Not binding unless
the offer is accepted by a properly authorized
representative of the issuer.
The sale or rather exchange of a block of securities with another
block of similar market value and often used establishing tax losses, extending or shortening maturity,
or upgrading credit levels.
The activities of a dealer or trader who purchases a block
of a certain asset or security for inventory purposes with the intention of reselling
at a profit.
Tax and Revenue Anticipation Notes are short-term notes
issued by municipalities or states to finance operations in anticipation of
future revenue and tax receipts that will be then used to repay the debt.
Tax Anticipation Notes are Short-term notes that are issued
by municipalities or states to finance active operations that are used to repay
debts in anticipation of future tax collections.
A depressed market in which trading volumes are low, with
very few offers to sell or bids to buy.
Treasury Bills are an obligation of the U.S. government which
commonly have a maturity of one or less
years and are sold at a discount but bear
Treasury bonds and
notes have maturities of up to ten years and have and have obligations to the
U.S. government to bear interest.
A trustee is responsible for enforcing a bondholders'
contract with an issuer and is commonly a bank designated as the custodian of the funds acts as an official representative
A financial institution or bank that arranges the sale and
distribution of securities and then assumes the responsibility of paying the
net purchase price, while dealing with the issuing entity. In addition, the underwriter
guarantees the sale securities by purchasing the entire issue from a company
and then sells it to the public.
Unlimited Tax Bonds are municipal bond secured by a pledge
of taxes that are not limited by amount or rate.
Over-the-counter securities that are traded in the
unregulated markets rather than through a recognized exchange.
A legal proceeding that requires courts to decide on the
validity of proposed bond issues.
When-Issued Basis describes certain securities that are
traded before being issued, with the stipulation that said transactions are
null and void if the security is not issued.
The successful bid for a particular issue being sold on the
market. Generally, it produces the lowest net interest cost for a municipal borrower
and offers the highest premium.
Expressed in percentage it is an investment’s annual rate of
return. The income yield is obtained by dividing the current income by the
current market price for the security and is the current income yield above par
premium with an adjustment spread over a period from the date of purchase to
the date of maturity.
The average annual yield of a security held to maturity and equal
to the rate at which all interest payments are be discounted to produce a
present value equal to the purchase price of the bond.
The Zero Coupon Bonds do not pay periodic coupon payments
and are instead are sold at a discount from face value.