B A NASDAQ stock symbol specifying that the stock is Class B shares of the company.
B-Share A class in a family of multi-class mutual funds. This class is characterized by a rear-end load structure that is paid only when selling the fund.
Baby Bells A common nickname given to the U.S. regional telephone companies that were formed from the breakup of AT&T in 1984, which was done to create more competition within the industry.
Baby Bills A nickname given to the hypothetical companies that would have formed if the Justice Department had broken up Microsoft Corporation.
Baby Bond Any bond issued with a par value less than $1,000.
Baccalaureate Bond A zero-coupon bond issued by certain states to assist families save for college tuition by means of added tax benefits.
Back Door Listing A strategy of going public used by a company that fails to meet the criteria for listing on a stock exchange. To get onto the exchange, the company desiring to go public acquires an already-listed company.
Back End Load A fee an investor pays when selling a mutual fund within a certain number of years, usually seven.
Back Fee The premium charged upon the second term or portion of a compound option.
Back Months The available futures contracts for a particular commodity that possess expirations or delivery dates furthest into the future. Also referred to as deferred futures or forward months.
Back Office Administration and support personnel in a financial services company. They carry out functions like settlements, clearances, record maintenance, regulatory compliance, and accounting.
Back Stop The act of providing last-resort support or security in a securities offering.
Back Testing The process of designing a trading strategy according to historical data and then testing the strategy by applying it to fresh data.
Back Up the Truck The act of a large buyer scooping up huge quantities of a stock.
Back-to-Back Loan A loan in which two companies in different countries borrow offsetting amounts from each other in each other's currency. The purpose of this transaction is to hedge against currency fluctuations.
Backdating Dating any document by a date earlier than the one on which the document was originally drawn up.
Backing Away The act of a market maker failing to honor a posted bid or ask even though the price and quantity are valid.
Backlog The total value of sales orders waiting to be fulfilled.
Backpricing A pricing method used in specific futures contracts whereby the price of the commodity to be delivered is priced by the purchaser at some future date after entering into the position.
Backward Integration A form of vertical integration that involves the purchase of suppliers in order to reduce dependency.
Backwardation The theory that says futures prices will tend to rise over the life of a contract. Therefore the near-term contracts trade at a higher price than the longer-term contracts.
Bad Debt A debt that is not collectable and therefore worthless to the creditor.
Bag Man Any person in charge of organizing and collecting contributions to political parties or funds gathered for political reasons.
baguettea it is a cross between a Bagel and a Bugatti. It is considered the fastest loaf of bread on the planet.
Bahrain Stock Exchange - BSE The stock exchange headquartered in Manama, Bahrain.
Balance of Payments - BOP A record of all transactions made by one particular country during a certain period of time. It compares the amount of economic activity between a country and all other countries.
Balance of Trade - BOT The largest component of a country's balance of payments. It is the difference between exports and imports. Debit items include imports, foreign aid, domestic spending abroad and domestic investments abroad. Credit items include exports, foreign spending in the domestic economy, and foreign investments in the domestic economy.
Balance Sheet A company's financial statement. It reports the company's assets, liabilities, and net worth at a specific time.
Balanced Fund A mutual fund that invests its assets into the money market, bonds, preferred stock, and common stock with the intention to provide both growth and income. Also known as an asset allocation fund.
Balanced Investment Strategy A portfolio allocation and management method aimed at balancing risk and return.
Balanced Scorecard A strategic-management method of identifying and improving various internal functions and their resulting external outcomes. The balanced scorecard attempts to measure and provide feedback to organizations in order to help in implementing strategies and objectives.
Balloon Maturity 1. A repayment schedule for a bond issue where a large number of the bonds come due at a one time (normally at the final maturity date).
2. A final loan payment that is considerably higher than prior payments. This is also known as a "balloon payment."
Balloon Option An option whose notional payments increase significantly after a set threshold is broken.
Bancassurance A French term referring to the selling of insurance through a bank's established distribution channels.
Bandwidth The data transfer capacity of a network. It is measured in bits per second.
Bank A commercial institution licensed as a receiver of deposits. Banks are mainly concerned with making and receiving payments as well as supplying short-term loans to individuals.
Bank for International Settlements - BIS An international organization fostering the cooperation of central banks and international financial institutions.
Bank Guarantee A guarantee from a lending institution ensuring that the liabilities of a debtor will be met. In other words, if the debtor fails to settle a debt, the bank will cover it.
Bank Insurance A guarantee on a specified amount of deposits in a bank.
Bank Investment Contract - BIC A security with an interest rate guaranteed by a bank. It provides a specific yield on a portfolio over a specified period.
Bank of Canada The central bank of Canada which influences the country's economy and money supply. The biggest tool at the BOC's disposal is the short term lending rate between banks (aka interest rates).
Bank Rate The rate at which central banks lend funds to national banks.
Bank Reconciliation Statement A form that allows individuals to compare their personal bank account records to the bank's records of the individual's account balance in order to uncover any possible discrepancies.
Bank Run A situation in which numerous bank customers try to withdraw their bank deposits simultaneously and the bank's reserves are not sufficient to cover the withdrawals
Banker's Acceptance A short-term credit investment created by a non-financial firm and guaranteed by a bank.
Bankmail An agreement made between a company planning a takeover and a bank, which prevents the bank from financing any other potential acquirer's bid.
Bankruptcy The state of a person or firm unable to repay debts.
Bankruptcy Financing Financing arranged by a company while under the Chapter 11 bankruptcy process.
Bankruptcy Risk The risk that a firm will be unable to meet its debt obligations. Often referred to as default or insolvency risk.
Banner Advertising A common form of advertising on the internet. The banner is an advertisement of 460x68 pixels, usually placed at the top of the page
Baptism of Fire A difficult situation that a company or individual experiences that will result in either success or failure. Examples include Initial Public Offerings (IPOs), a new CEO to a struggling company or a company that has survived hostile takeover attempts.
Bar Chart A style of chart used by some technical analysts, on which, as illustrated below, the top of the vertical line indicates the highest price a security traded at during the day, and the bottom represents the lowest price. The closing price is displayed on the right side of the bar, and the opening price is shown on the left side of the bar. A single bar like the one below represents one day of trading.
Barbell A bond investment strategy with holdings are heavily concentrated in both very short-term and extremely long-term maturities. This is also known as the "dumbbell" or "barbelling."
Barefoot Pilgrim Slang for an unsophisticated investor who loses all of his or her wealth from trading equities in the stock market.
Barometer An instrument used to forecast trends. For example, a barometer stock is a stock that has a price trend indicative of the market.
Barometer Stock A security whose price pattern is regarded as an indicator of the state of the overall market.
Barratry The act of a vessel's captain or crew knowingly endangering the vessel's cargo and/or the vessel itself.
Barrels per Day - B/D A measure of oil production output.
Barrier Option A type of option whose payoff depends on whether or not the underlying asset has reached or exceeded a predetermined price.
Barron's Confidence Index A confidence indicator calculated by dividing the average yield on high-grade bonds by the average yield of intermediate-grade bonds. The discrepancy between the yields is indicative of investor confidence.
Barter The act of trading goods and services without the use of money.
Base Period A particular time period used for comparative purposes when measuring economic data.
Baseline A benchmark used as a basis for comparison.
Basing A period in which a stock price has very little or no trend. The resulting price pattern is a flat line.
Basis 1. A term used to describe the variation between the spot price of a deliverable commodity and the relative price of the futures contract for the same actual that has the shortest duration until maturity.
2. A security's basis is the purchase price after commissions or other expenses. Also known as cost basis or tax basis.
Basis Grade The minimum accepted standard that a deliverable commodity must meet to be used as the actual of a futures contract. Also known as "par grade" or "contract grade."
Basis Point - BPS A unit for measuring a bond's yield that is equal to 1/100th of 1% of yield. Also known as bips.
Basis Quote A method for simplifying and shortening the quoted price of a futures contract. Used in the futures markets, a basis quote gives the variation above or below the price of a futures contract.
Basis Rate Swap A type of swap in which two parties calculate payments relative to different floating rates.
Basis Risk The risk that offsetting investments in a hedging strategy will be incorrectly matched because of offsetting positions in different markets or mismatched maturities of contracts.
Basket Option A type of option whose underlying asset is a basket of commodities, securities, or currencies.
Basket Trade The buying or selling of a set of 15 or more securities in a single order.
Batch Trading A method of transacting different security orders that involves the accumulation of orders and their simultaneous execution.
Bay Street 1.The street in Toronto where the Toronto Stock Exchange (TSE) is located.
2. The collective name for the financial institutions in Toronto including stock exchanges, banks, commodity markets, money markets, etc.
BBD In currencies, this is the abbreviation for the Barbados Dollar.
BCG Growth Share Matrix A graphical approach to resource allocation within a multi-segmented corporation.
BDT In currencies, this is the abbreviation for the Bangladesh Taka.
Bear An investor who acts on the belief that a security or the market is falling or is expected to fall.
Bear Hug An offer made by a company to buy the shares of another company that is too high for the board of the target firm to refuse.
Bear Market A market condition in which the prices of securities are falling or are expected to fall. Although figures can vary, a downturn of 15%-20% or more in multiple indexes (Dow or S&P 500) is considered an entry into a bear market.
Bear Raid The illegal practice of attempting to push the price of a stock lower by taking large short positions and spreading unfavorable rumors about the target firm.
Bear Spread 1. An option strategy that looks for maximum profit when the price of the underlying security declines. The strategy involves the simultaneous purchase and sale of options; puts or calls can be used. A higher strike price is purchased and a lower strike price is sold. The options should have the same expiration date.
2. A trading strategy used by future traders who intend to profit from the decline in commodity prices while limiting the possibility of potentially damaging losses.
Bear Trap A false signal that the rising trend of a stock or index has reversed when it has not.
Bearer Form A security not registered in the books of issuing corporation but that is payable to its bearer (the person possessing it). Securities can be issued in two forms: registered or bearer. Registered form means the issuing firm keeps records of a security's owner and mails out payments to him/her. Bearer form means the security is traded without any record of ownership, so physical possession of the security is the sole evidence of ownership. Most securities issued today are in registered form.
Bearish Belt Hold A candlestick pattern that forms during an upward trend. This is what happens in the pattern: following a stretch of bullish trades, a bearish or black candlestick occurs; the opening price, which becomes the high for the day, is higher than the close of the previous day; the stock price declines throughout the day, resulting in a long black candlestick with a short lower shadow and no upper shadow.
Bearish Engulfing Pattern A chart pattern that consists of a small white candlestick with short shadows or tails followed by a large black candlestick that eclipses or "engulfs" the small white one.
Bearish Harami A trend indicated by a large candlestick followed by a much smaller candlestick whose body is located within the vertical range of the larger candle's body. Such a pattern is an indication that the previous upward trend is coming to an end.
Beginning Inventory - BI The book value of goods, inputs, or materials available for use or sale at the beginning of an inventory accounting period.
Behavioral Economics A field of economics that studies how the actual decision-making process influences the decisions that are reached.
Behavioral Finance A field of finance that proposes psychology-based theories to explain stock market anomalies. Within behavioral finance it is assumed that the information structure and the characteristics of market participants systematically influence individuals' investment decisions as well as market outcomes.
Beige Book A commonly used name for the Fed report entitled "Summary of Commentary on Current Economic Conditions by Federal Reserve District." It is published just before the FOMC meeting on interest rates and is used to inform the members on changes in the economy since the last meeting.
Big Board A nickname for the New York Stock Exchange.
Big Figure The stem, or whole dollar price, of a quote, often used in reference to foreign currencies or money markets.
Big Four (or Big Five, Big Six, Big Eight) The largest accounting firms in the United States as measured by revenue.
Big Three The three largest automobile manufacturers in North America:1. General Motors2. Daimler Chrysler3. Ford Motor Co.
Big Uglies The old industrial companies in gritty industries such as mining, steel and oil.
Bill of Exchange A non-interest-bearing written order used primarily in international trade that binds one party to pay a fixed sum of money to another party at a predetermined future date.
Binomial Option Pricing Model A simple model used to price options that reduces possibilities of price changes, removes the possibility for arbitrage, assumes a perfectly efficient market, and shortens the duration of the option.
Black A description of a positive balance on a company's financial statements.
Black Box Model A computer program into which users enter information and the system utilizes pre-programmed logic to return output to the user.
Black Knight A company that makes a hostile takeover offer on a target company.
Black Monday The most notorious day in financial history (October 19, 1987). The DJIA fell 508 points, almost 22%.
Black Scholes Model A model used to calculate the value of a European call option. Developed in 1973 by Fisher Black and Myron Scholes, it utilizes the stock price, strike price, expiration date, risk-free return, and the standard deviation (volatility) of the stock's return.
Black Thursday The name given to Thursday, October 24th, 1929, when the New York Stock Exchange plummeted, leading to the Great Depression of the 1930's.
Black's Model A variation of the Black-Scholes model that allows for the valuation of options on futures contracts.
Blackboard Trading The trading of commodities and futures contracts off a blackboard found on the wall of a commodity exchange.
Blackout Period 1. A period of around 60 days where employees of a company with a retirement or investment plan cannot modify it.
2. In terms of insurance, it is the time period between which a surviving spouse of a deceased partner has become ineligible for survivorship benefits and before they receive retirement benefits.
Blank Check Company A company in a developmental stage that doesn't have an established business plan or has a business plan that revolves around a merger or an acquisition of another firm.
Blank Check Preferred A method companies use to simplify the process of creating new classes of preferred stock for the purpose of raising additional funds from sophisticated investors without obtaining separate shareholder approval.
Blanket Bond Insurance coverage that protects brokerages, investment bankers, and other financial institutions against the event of an employee causing losses or practicing fraudulence.
Blanket Lien A lien covering nearly all types of assets and collateral owned by a debtor.
Blanket Recommendation A situation in which a financial professional or institution sends a recommendation to all clients to buy or sell a particular security or product, regardless of whether or not the particular asset is compatible with the client's investment goals, objectives, and risk tolerance.
Blend Fund A type of mutual fund that invests in a combination of value and growth stocks.
Blind Trust A trust in which the executors have full discretion over the assets and the beneficiaries in contrast have no knowledge of holdings within the trust.
Blitzkrieg Tender Offer A takeover offer that is intended to be so attractive that very few objections will arise and the takeover will occur swiftly.
Block House A brokerage whose major concern is finding potential buyers and sellers of block trades.
Block Order An order submitted for the sale or purchase of a large quantity of securities.
Block Trade The sale or purchase of a large quantity of securities.
Bloodletting A period of severe investing losses.
Blow-Off Top A steep and rapid increase in price followed by a steep and rapid drop in price.
Blue Chip A security from a well-established and financially-sound company that has demonstrated its ability to pay dividends in both good and bad times.
Blue Chip Stock Stock of a well-established and financially-sound company that has demonstrated its ability to pay dividends in both good and bad times.
Blue Sheets Requests for information sent out by the Securities and Exchange Commission to market makers.
Blue Sky Laws State regulations designed to protect investors against securities fraud by requiring sellers of new issues to register their offerings and provide financial details. This allows investors to base their judgments on trustworthy data.
BMD In currencies, this is the abbreviation for the Bermudian Dollar.
BND In currencies, this is the abbreviation for the Brunei Dollar.
Bo Derek A slang term used to describe a perfect stock or investment.
Board Broker A member or member nominee of a commodity exchange who is entrusted with the responsibility of executing and matching orders, providing price quotations, and maintaining orderliness of trading accounts for the designated commodity.
Board Broker System The system used by many commodity exchanges in which members are assigned specific commodities to manage.
Board Lot The standard number of shares in trading stocks, usually 100.
Board of Directors - B of D A group of individuals who are elected by stockholders to establish corporate management policies and make decisions on major company issues, such as dividend policies.
BOB In currencies, this is the abbreviation for the Bolivian Bolivano.
Bogey This is the benchmark return to which the performance of a portfolio manager or mutual fund manager is compared.
Boiler Room A telemarketing firm using high pressure sales tactics. These tactics are sometimes used by stock brokers who try to sell investors the firm's house stock.
Boilerplate The standard format of a legal document that is required by regulatory bodies or by law.
Bollinger Band A band plotted two standard deviations away from a simple moving average.
Bolsa Boliviana de Valores - BBV The stock exchange headquartered in La Paz, Bolivia .
Bond A debt investment, with which the investor loans money to an entity (company or government) that borrows the funds for a defined period of time at a specified interest rate.
Bond Anticipation Note - BAN A short-term interest-bearing security issued in the anticipation of larger future bond issues.
Bond Equivalent Yield - BEY A calculation for restating semi-annual, quarterly, or monthly discount-bond or note yields into an annual yield. For a fixed income security with a par value of $1000, the calculation is as follows:
Bond Fund A mutual fund whose investment objective is to provide stable income while taking on minimal risk.
Bond Ladder A strategy for managing fixed-income investments with which the investor builds a ladder by dividing his or her investment dollars evenly among bonds or CDs that mature at regular intervals simultaneously (for example, every six months, once a year, or every two years).
Bond Option An derivative investment in which the underlying asset is a bond.
Bond Quote The statement of a bond's price.
Bond Rating A specification of the possibility of default by a bond issuer based on an analysis of the issuer's financial condition and profit potential.
Bond Swap A strategy with which an investor sells a bond and at the same time purchases a different bond with the proceeds from the sale.
Bonus Issue Additional shares issued in a company that are free to existing shareholders. The decision to distribute further shares may be an alternative to increasing a company’s dividend payout.
Book Building The process by which the offer price of an IPO is based on actual demand from institutional investors.
Book Closure A company's announcement of a dividend or bonus to investors.
Book Runner The managing or lead underwriter who maintains the books of securities sold for a new issue.
Book Value 1. The value at which an asset is carried on a balance sheet. In other words, the cost of an asset minus accumulated depreciation.
2. The net asset value of a company, calculated by total assets minus intangible assets (patents, goodwill) and liabilities.
Book Value Per Common Share A measure used by owners of common shares in a firm to determine the level of safety associated with each individual share after all debts are paid accordingly.
Book-Entry Securities Securities that are recorded in electronic records called book entries rather than as paper certificates.
Book-to-Bill Ratio The technology industry's demand-to-supply ratio for orders on a "firm's book" to number of orders filled.
Book-to-Market Ratio A ratio derived by taking the value of shareholders' equity less the book value of preferred stock, plus deferred taxes and investment tax credits on the balance sheet, and finally dividing this total amount by the market price multiplied by outstanding shares.
Booking the Basis An arrangement made between a buyer and seller in which either party has the ability at some future date to determine the cash price of the forward sales agreement.
Bookout The process of closing out a position in a swap contract or other OTC derivative agreement prior to maturity.
Boom A period of time in which sales or business activity increases rapidly.
Boomernomics An investing strategy that involves buying equities directly related to the spending behavior of baby boomers (people born between 1946 and 1964).
Booster Shot The name given to the first formal recommendation report issued by an underwriter for an IPO. It is presented in the process of the public offering.
Boot Cash or other property added to an exchange or transaction in order to make the value of traded goods equal.
Bootstrap A situation in which an entrepreneur starts a company with little capital. An individual is said to be boot strapping when he or she attempts to found and build a company from personal finances or from the operating revenues of the new company.
Bootstrapping A procedure used to calculate the zero coupon yield curve from market figures.
Boston Snow Indicator A market theory stating that a white Christmas in Boston will result in rising stock prices.
Bottom The lowest point or price for a financial security or index, which is then followed by an increase.
Bottom Fisher An investor who looks for bargains among stocks whose prices have recently dropped dramatically.
Bottom Line Slang for net income or profit.
Bottom Up Investing An investment approach that de-emphasizes the significance of economic and market cycles. This approach focuses on the analysis of individual stocks.
Bought Deal A new share issue that is bought entirely by one underwriter to resell to investors.
Bounced Check A check that can not be processed because the writer has insufficient funds. Also known as a rubber check.
Boutique A small investment firm specializing in offering specific, but limited services to a select number of individuals.
Box Size In the context of Point & Figure Charts, the box size is the minimum price change that must occur for a given period before a mark (an X or an O) is added to the chart.
Box Spread A dual option position involving a bull and bear spread with identical expiry dates. This investment strategy provides for minimal risk. Additionally, it can lead to an arbitrage position as an investor attempts to lock in a small return at expiry.
Bracket Creep A situation where inflation pushes income into higher tax brackets. The result is an increase in income taxes but no increase in real purchasing power.
Brady Bonds Bonds that are issued by the governments of developing countries. Brady Bonds are some of the most liquid emerging market securities. They are named after former U.S. Treasury Secretary Nicholas Brady, who sponsored the effort to restructure emerging market debt instruments.
Brand A distinguishing symbol, mark, logo, name, word, sentence, or a combination of these items that companies use to distinguish their product from others in the market. ;
Brand Equity An intangible value-added aspect of particular goods otherwise not considered unique.
Bre-X Minerals Ltd. A company involved in one of the largest stock swindles in history. Its Indonesian gold property, which reportedly contained over 200 million ounces, was proven fraudulent in May of 1997.
Breadth Indicator A specific type of indicator that uses advancing and declining issues to determine the amount of participation in the movement of the stock market.
Breadth of Market Theory A technical analysis theory that predicts the strength of the market according to the number of stocks that advance or decline in a particular trading day.
Break A term used in futures markets to describe a rapid and sharp price decline.
Break Fee 1. A fee paid by a target company to bidders (during an acquisition) if the pending deal is terminated.
2. A fee paid by one party of a contract to another in order to terminate or cancel legal obligations.
Break-Even Point - BEP 1. In general, the point at which gains equal losses.
2. In options, the market price that a stock must reach for option buyers to avoid a loss if they exercise. For a call, it is the strike price plus the premium paid. For a put, it is the strike price minus the premium paid.
Breakaway Gap A term used in technical analysis. A breakaway gap represents a gap in the movement of a stock price supported by levels of high volume.
Breakout A chart pattern used to indicate a rise in a stock's price above its resistance level (such as its previous high price) or a drop below its support level (commonly the last lowest price).
Breakpoint A predetermined contribution amount that, if met by a mutual fund holder, gives him or her eligibility for a reduction in sales charges.
Breakpoint Sale The sale of a mutual fund at a dollar amount just below the breakpoint, increasing the applicable sales charges and the profit to the provider of the fund.
Brent Blend A type of sweet crude oil that is used as a benchmark for the prices of other crude oils.
Bretton Woods Agreement An agreement made in Bretton Woods, U.S.A in 1944. It set fixed exchange rates for major currencies and subsequently established the IMF.
Brick and Mortar A traditional "street-side" business that deals with its customers face-to-face in an office or store that the business owns or rents. Web-based businesses usually have lower costs and greater flexibility than brick-and-mortar operations.
Bridge Financing A method of financing, used by companies before their IPO, to obtain necessary cash for the maintenance of operations.
Bridge Loan A short-term loan that is used until a person or company can secure permanent financing.
British Bankers Association - BBA The leading trade association that represents the views of those involved in the banking and financial services industry within the U.K.
BRL In currencies, this is the abbreviation for the Brazilian Real.
Broad Based Index An index designed to reflect the movement of the entire market.
Broad Liquidity A category of the money supply which includes: all funds in M3, individual holdings in accounts, savings bonds, T-bills with less than one year in maturity, commercial papers, and banker's acceptances.
Broad-Based Weighted Average An anti-dilution provision used for the benefit of existing preferred shareholders when additional offerings are made by the corporation. The broad-based weighted average accounts for all equity previously issued and currently undergoing issue.
Broadband A high-speed, high-capacity transmission medium that can carry signals from multiple independent network carriers. This is done on a single coaxial or fiber-optic cable by establishing different bandwidth channels. Broadband technology can support a wide range of frequencies. It is used to transmit data, voice, and video over long distances simultaneously.
Broker 1. An individual or firm that charges a fee or commission for executing buy and sell orders submitted by an investor.
2. The role of a firm when it acts as an agent for a customer and charges the customer a commission for its services.
3. A licensed real estate professional who typically represents the seller of a property. A broker's duties may include: determining market values, advertising properties for sale, showing properties to prospective buyers, and advising clients with regard to offers and related matters.
Broker Association A permitted association between exchange members who have shared responsibility for the execution of orders placed by their customers. These members thereby gain access to a collective pool of un-transacted orders, and they share the profits and losses associated with trading activities.
Broker's Call The interest rate relative to which margin loans are quoted. Also known as the call loan rate.
Broker-Dealer A person or firm in the business of buying and selling securities operating as both a broker and dealer depending on the transaction.
Brokered Deposit A large-denomination deposit similar to a certificate of deposit.
Brown Field Investment When a company or government purchases or leases existing production facilities to launch a new production activity.
BSD In currencies, this is the abbreviation for the Bahamanian Dollar.
BTN In currencies, this is the abbreviation for the Bhutan Ngultrum.
Bubble A speculative market or stock in which prices rise very rapidly and then fall sharply.
Buck Trader's slang for a million dollars.
Buck the Trend When a security goes against the prevailing trend of the overall market.
Bucket Shop 1. A fraudulent brokerage firm that uses aggressive telephone sales tactics to sell securities that the brokerage owns and wants to get rid of. The securities they sell are typically poor investment opportunities, almost always penny stocks.
2. A brokerage that makes trades on a client's behalf and promises a certain price. The brokerage, however, waits until a different price arises and then makes the trade, keeping the difference as profit.
Bucketing A situation where, in an attempt to make a short-term profit, a broker confirms an order to a client without actually executing it. A brokerage which engages in unscrupulous activities, such as bucketing, is often referred to as a bucket shop.
Budget An estimation of an organization's revenue and expenses over a specified period of time.
BUGS Index - HUI An acronmy for "basket of un-hedged gold stocks," the BUGS index is the AMEX's index measuring gold companies that do not hedge their gold production beyond a year and a half.
Bulge A slang term used to describe a rapid advance in prices within the commodities market.
Bulge Bracket The group of firms in an underwriting syndicate who sold the largest amount of the issue.
Bull An investor who thinks the market, a specific security, or an industry will rise.
Bull Market A market in which prices of a certain group of securities are rising or are expected to rise.
Bull Spread An option strategy in which maximum profit is attained if the underlying security rises in price. Either calls or puts can be used. The lower strike price is purchased and the higher strike price is sold. The options have the same expiration date.
Bull Trap A false signal indicating that a declining trend in a stock or index has reversed and heading upwards when, in fact, the security will continue to decline.
Bull Vertical Spread An bullish strategy used by investors who feel that the market price of a commodity will appreciate but wish to limit the downside potential associated with an incorrect prediction.
Bull/Bear Ratio A market sentiment indicator published weekly by Investor's Intelligence that uses information polled directly from market professionals. The ratio is derived by dividing the total number of bullish investment advisors by the number of bearish and bullish advisors.
Bulldog Bond A sterling denominated bond that is issued in London by a company that is not British.
Bullet Bond A noncallable regular coupon paying debt instrument with a single repayment of principal on the maturity date.
Bullet GIC A GIC purchased with a single premium and only one payout that is made at maturity.
Bullet Loan Any loan that requires a balloon payment at the end of the term and anticipates that the loan will be refinanced in order to meet the balloon payment obligation.
Bullet Repayment A single payment for an entire loan amount that is paid at maturity.
Bullet Trade The act of purchasing an "in the money" put option so that the buyer can capitalize on a bear market by effectively shorting a stock without waiting for an uptick.
Bullion Gold and silver that is officially recognized as high quality (at least 99.5% pure), and is in the form of bars rather than coins.
Bullish Belt Hold A trend in candlestick charting that occurs during a downward movement. After a stretch of bearish candlesticks, a bullish or white candlestick forms. The opening price, which becomes the low for the day, is significantly lower then the closing price. This results in a long white candlestick with a short upper shadow and no lower shadow.
Bullish Engulfing Pattern A chart pattern that forms when a small black candlestick is followed by a large white candlestick that completely eclipses or "engulfs" the previous day's candlestick. The shadows or tails of the small candlestick are short, which enables the body of the large candlestick to cover the entire candlestick from the previous day.
Bullish Harami A trend in which a large candlestick is followed by a smaller candlestick, whose body is located within the vertical range of the larger body. Such an occurrence indicates that the falling trend is coming to a close.
Bullish Homing Pigeon A trend indicated by a large candlestick followed by a much smaller candlestick whose body is located within the vertical range of the larger candle's body. In both candlesticks, the stock price has closed down from the opening price. This pattern may indicate that there is a weakening of the current downwards trend.
Bulltrap A false signal indicating that a declining trend in a stock or index has reversed and is heading upwards when, in fact, the security will continue to decline.
Bunching The combining of odd-lot or round-lot orders for the same security so that they may be executed at the same time.
Bungalow A one-story house, cottage, or cabin.
Bunny Bond A type of bond that offers investors the option to re-invest coupon payments back into additional bonds with the same coupon and maturity. Also known as "multiplier bond" or "guaranteed coupon reinvestment bond."
Buoyant The term used to describe a commodities market where the prices generally rise with ease when there are considerable signals of strength.
Burn Rate The rate at which a new company uses up its venture capital to finance overhead before generating positive cash flow from operations. In other words, it's a measure of negative cash flow.
Business A firm, occupation, trade, profession, or anything dealing with financial livelihood.
Business Cycle A predictable long-term pattern of alternating periods of economic growth and decline.
Business Development Bank of Canada - BDC A financial institution that is wholly owned by the government of Canada providing financial and consulting services to small Canadian businesses.
Business Logic The specific details and information flow of a particular industry.
Business Model The way, or ways, in which a company makes generates revenue (and profit).
Business Risk The risk that a company will not have adequate cash flow to meet its operating expenses.
Business to Business - B2B Business conducted between companies, rather than between a company and individual consumers.
Business to Consumer - B to C Business conducted between companies and individual consumers, rather than between two companies.
Busted Convertible Security A convertible security that is trading well below its conversion value. The result is that the security is valued as regular debt because there is very little chance that it will ever reach the convertible price before maturity.
Busted Takeover A highly leveraged takeover. Consequently, some of the acquired company's assets must be sold off for the deal to go through.
Butterfly Spread An option strategy combining a bull and bear spread. It uses three strike prices. The lower two strike prices are used in the bull spread, and the higher strike price in the bear spread. Both puts and calls can be used.
Buttonwood Agreement The agreement between 24 of United States' first and most prominent brokers. Rumored to have occurred under a "Buttonwood" tree, this marked the beginnings of the investment community of Wall Street.