C A NASDAQ stock symbol indicating the issuer has been granted a continuance in NASDAQ under an exception to the qualification standards for a limited period.
C-Share In a family of multi-class mutual funds, the class that has a constant load structure throughout the life of the fund.
Cabinet Crowd Members of the NYSE that typically trade in inactive bonds. Also known as the inactive bond crowd or book crowd.
Cabinet Security A stock or bond that is listed under a major financial exchange, but is not actively traded.
Cable In the context of investing, it refers to the exchange rate between the U.S. dollar and the British pound sterling.
CAD In currencies, this is the abbreviation for the Canadian Dollar.
Cafeteria Plan An employee benefit plan that allows employees to choose from a variety of benefits to formulate a plan that best suits their needs. Also known as 'cafeteria employee benefit plan' or 'flexible benefit plan'.
Cage A term used to describe the department of a brokerage firm that receives and distributes physical securities.
Calculation Agent An individual who calculates the value of a derivative or the amount owing from each party in a swap agreement.
Calendar Year The one year period that begins January 1 and ends December 31.
Call 1. The period of time between the opening and closing of some future markets wherein the prices are established through an auction process.
2. An option contract giving the owner the right (but not the obligation) to buy a specified amount of an underlying security at a specified price within a specified time.
Call Date The date on which a bond can be redeemed before maturity. If the issuer feels there is a benefit to refinancing the issue, the bond may be redeemed on the call date at par or at a small premium to par.
Call Loan A loan provided to a brokerage firm and used to finance margin accounts. The interest rate on a call loan is calculated daily. The resulting interest rate is referred to as the call loan rate.
Call Loan Rate The short term interest rate charged on a secured call loan, usually in margin accounts.
Call Option An agreement that gives an investor the right (but not the obligation) to buy a stock, bond, commodity, or other instrument at a specified price within a specific time period.
Call Premium 1. The dollar amount over the par value of a convertible fixed income and debt security. This amount is given to holders when the security is called by the issuer due to the soft call provision.
2. The amount the purchaser of a call option must pay to the writer.
Call Protection A protective provision of a callable security prohibiting the issuer from calling back a security in the early portion of its life.
Call Ratio Backspread A very bullish investment strategy that combines options to create a spread with limited loss potential and a mixed profit potential.
Call Rule A exchange rule whereby the official bidding price for a cash commodity is competitively established at the end of each trading day and held until the opening of the exchange the following trading day.
Call Warrant A warrant that gives the holder the right to buy the underlying share for an agreed price, on or before a specified date.
Callable Bond A bond that can be redeemed by the issuer prior to its maturity. Usually a premium is paid to the bond owner when the bond is called. Also known as a redeemable bond.
Callable Common Stock Common stock that allows the issuer to call back the stock at a specific price.
Callable Preferred Stock A type of preferred stock that carries the provision that the issuer has the right to call in the stock at a certain price and retire it. Also referred to as a redeemable preferred stock.
Called Away A term used to describe the elimination of an underlying security due to the obligation of delivery. This occurs if an option is exercised against a security holder, a redeemable bond is called by its issuer or a short position held in a security must be delivered.
Calmar Ratio A ratio used to determine return relative to drawdown (downside) risk in a hedge fund. Calculated as:
CAMELS Rating System An international bank-rating system with which bank supervisory authorities rate institutions according to six factors. The six areas examined are represented by the acronym "CAMELS."
Canada Education Savings Grant - CESG A grant from the Government of Canada paid directly into a beneficiary's Registered Education Savings Plan (RESP). It adds 20% to the first $2,000 in contributions made into an RESP on behalf of an eligible beneficiary each year.
Canada Premium Bond - CPB A financial instrument issued by the Bank of Canada that offers a higher interest rate than a Canada Savings Bond (CSB).
Canada Savings Bond - CSB A financial product issued by the Bank of Canada. It offers a competitive rate of interest and is guaranteed for several years.
Canadian Investor Protection Fund - CIPF A Canadian not-for-profit organization designed to protect investors from the bankruptcy of an investment firm.
Canadian Orginated Preferred Securities - COPrS A long-term subordinated debt instrument, issued in Canada.
Capital Appreciation A rise in the market price of an asset.
Capital Asset A long-term asset that is not bought or sold in the regular course of business.
Capital Asset Pricing Model - CAPM A model describing the relationship between risk and expected return that is used in the pricing of risky securities. CAPM says that the expected return of a security or a portfolio equals the rate on a risk-free security plus a risk premium. If this expected return does not meet or beat the required return then the investment should not be undertaken.
Capital Base 1. The capital acquired during an IPO, or the additional offerings of a company, plus any retained earnings.
2. An initial investment plus subsequent investments made by an investor into their portfolio.
Capital Budgeting The process of determining whether or not projects such as building a new plant or investing in a long-term venture are worthwhile.
Capital Cost Allowance - CCA A rate of depreciation used for income tax purposes only. This term primarily relates to Canadian taxation.
Capital Dividend Account - CDA A unique account where untaxed gains are deposited within a private company.
Capital Employed 1. The total amount of capital used for the acquisition of profits.
2. The value of all the assets employed in a business.
3. Fixed assets plus working capital.
4. Total assets less current liabilities.
Capital Expenditure - CAPEX Funds used by a company to acquire or upgrade physical assets such as property, industrial buildings, or equipment.
Capital Flight The action of investors moving their securities out of a particular country because of a fear of country-specific risks or political instability, or because of the lure of higher returns in a different country.
Capital Gain An increase in the value of a capital asset (investment or real estate) that gives it a higher worth than the purchase price. The gain is not realized until the asset is sold. A capital gain may be short-term (one year or less) or long-term (more than one year), and must be claimed on income taxes.
Capital Gains Distribution Distributions that are paid to an investment company's shareholders out of the capital gains of the company's investment portfolio.
Capital Gains Treatment Describes lump-sum distributions of qualified plan balances that accrued before 1974 may be eligible for capital gains treatment.
Capital Goods Any goods used by an organization to produce other goods.
Capital Guarantee Fund An investment vehicle, offered by certain institutions, that guarantees the investor's initial capital investment from any losses.
Capital Intensive A process or industry that requires large sums of financial resources to produce a particular good.
Capital Lease A lease considered to have the economic characteristic of asset ownership.
Capital Loss The loss incurred when a capital asset (investment or real estate) decreases in value. The loss is not realized until the asset is sold for a lower price than the purchase price.
Capital Market Line - CML The line used in the Capital Asset Pricing Model to illustrate the rates of return for efficient portfolios depending on the risk free rate of return and the level of risk (beta) for a particular portfolio.
Capital Markets The market where capital, such as stocks and bonds, are traded.
Capital Note Fixed income products issued by companies as a source of short term debt.
Capital Share The class of shares offered by a dual-purpose fund that has opportunity for capital appreciation but does not offer the holder any portion of the fixed income earned within the portfolio.
Capital Structure The means by which a firm is financed.
Capital Surplus Equity which cannot otherwise be classified as capital stock or retained earnings. It's usually created from a stock issued at a premium over par value.
Capitalism An economic system that encourages private investment and business, rather than a government controlled economy.
Capitalization 1. The sum of a corporation's stock, long-term debt, and retained earnings.
2. A company's outstanding shares multiplied by its share price, better known as market capitalization.
Capitalization Rate According to the Appraisal Institute, it is a method used to convert an estimate of a single year's income expectancy into an indication of value in one direct step, by dividing the income estimate by an appropriate rate.
Capitalize An accounting method used to delay the recognition of expenses by recording the expense as a long term asset.
Capitulation A military term. Capitulation refers to surrendering or giving up. In the stock market, capitulation is associated with "giving up" any previous gains in stock price as investors sell equities in an effort to get out of the market and into less risky investments. True capitulation involves extremely high volume and sharp declines. It usually is indicated by panic selling.
Capped Option An option with a pre-established profit cap. A capped option is automatically exercised when the underlying security closes at or above (for a call) or at or below (for a put) the Option's cap price.
Capping 1. The practice of selling large amounts of a commodity or security close to the options expiry date in order to prevent a rise in market price.
2. An attempt to keep a stock's price low or move its price lower by putting selling pressure on it.
Captive Finance Company A subsidiary whose purpose is to provide financing to customers buying the parent company's product.
Captive Fund A fund that provides investment services solely to the one firm holding ownership.
Carbon Trade An idea presented in response to the Kyoto Protocol that involves the trading of greenhouse gas (GHG) emission rights between nations.
Cardboard Box Index An index used by some investors to gauge industrial production by using the output of cardboard boxes to predict the purchases of non-durable consumer goods.
Carried Interest Used for resource companies that have a stake in a resource property. The owner of the property doesn't have to make a proportionate contribution to the expenses incurred for the project.
Carrot Equity Equity which allows for the opportunity to purchase more equity if the company reaches certain financial goals.
Carrying Broker A term used to refer to a commodities exchange member who elects to clear trades on behalf of another party.
Carrying Charge A cost associated with holding a financial instrument or storing a physical commodity over a defined period of time.
Carrying Charge Market A futures market where contracts with maturities further into the future have higher future prices.
Cash Balance Pension Plan An employee pension plan whereby an employer will credit the participant's account with a set percentage of their yearly compensation plus interest charges.
Cash Budget An estimation of the cash inflows and outflows for a business.
Cash Charge A charge off made by a company against earnings that requires an initial outlay of cash.
Cash Commodity The actual or physical commodity underlying a futures contract.
Cash Conversion Cycle The duration between the purchase of a firm's inventory and the collection of accounts receivable for the sale of that inventory. Also known as cash cycle.
Cash Cow One of the four categories (quadrants) in the BCG growth-share matrix that represents the division within a company that has a large market share within a mature industry.
Cash Dividend Money paid to stockholders, normally out of the corporation's current earnings or accumulated profits. All dividends must be declared by the board of directors, and are taxable income to the recipients.
Cash Earnings Per Share - Cash EPS A ratio derived from operating cash flow divided by diluted shares outstanding.
Cash Flow The amount of cash a company generates and uses during a period, calculated by adding noncash charges (such as depreciation) to the net income after taxes. Cash Flow can be used as an indication of a company's financial strength. It is also sometimes referred to as the "money value" of trades in a stock during a trading day.
Cash Flow After Taxes A company's cash flow after taxes is derived by taking the net income and removing charges for taxes and depreciation.
Cash Flow from Financing Activities A category on the statement of cash flow that accounts for external activities such as issuing cash dividends, adding or changing loans, or selling/issuing more stock.
Cash Flow Loan Borrowing cash typically to meet day-to-day operations or acquisitions. Reasons for needing a cash flow loan could be seasonal demand, business expansion, or changes in the business cycle.
Cash Flow per Share Cash flow from operations minus preferred stock dividends, divided by the number of common shares outstanding. This measures a firm's financial strength.
Cash Flow Return on Investment - CFROI A valuation model that assumes the stock market sets prices based on cash flow, not on corporate performance and earnings.
Cash Investment Short-term obligations, usually ninety days or less, that provide a return in the form of interest payments.
Cash Market The market for a cash commodity or actual, as opposed to the market for its futures contract.
Cash Price The price of the purchase and delivery of cash commodities.
Cash Return on Gross Investment - CROGI A measure of financial performance calculated as gross cash flow after taxes divided by gross investment.
Cash Settlement A settlement method used in certain future and option contracts whereby, upon expiry or exercise, the seller of the financial instrument does not deliver the actual but transfers the associated cash position.
Cash Surrender Value The value of the funds to be returned to an insurance policy or annuity holder in the event that their policy is terminated before its maturity or the insured event.
Cash Transaction A transaction that is settled with cash on the same day as the trade.
Cash-on-Cash Return A rate of return often used in real-estate transactions. The calculation determines the cash income on the cash invested:
Cash-on-Cash Yield A comparative measure using the total amount of distributions paid upon an income trust divided by its market value.
Cash-or-Nothing Call A type of option whose payoff is set to a specified fixed price if the final asset price is above the strike price; if not, the payoff is set to zero.
Cash-or-Nothing Put A type of option whose payoff is set to a specified fixed price if the final asset price is below the strike price; if not, the payoff is set to zero.
Cashier's Check A check drawn by a bank upon itself and thus secured by the issuing bank.
Cashless Exercise A transaction that is used when exercising employee stock options (ESO). Essentially, what you do here is borrow enough money from your broker to exercise the options. You then simultaneously sell enough shares to pay for the purchase, taxes, and broker commissions.
Casino Finance Any investment strategy that is classified as extremely high risk.
Catalyst Something that initiates or causes an important event to happen. Originally a term used in chemistry for the volatile (active) chemical in a formula.
Catastrophe Bond - CAT A high-yield debt instrument that is usually insurance linked and meant to raise money in case of a catastrophe such as a hurricane or earthquake. It has a special condition that states that if the issuer (insurance or reinsurance company) suffers a loss from a particular predefined catastrophe, then the issuer's obligation to pay interest and/or repay the principal is either deferred or completely forgiven.
Category Killer Large companies that put less efficient and highly specialized merchants out of business.
Cats and Dogs A slang term referring to speculative stocks that have short or suspicious histories for sales, earnings, dividends, etc.
Caveat Emptor Another way to say, "let the buyer beware."
CBOE NASDAQ Volatility Index - VXN A volatility index on the Chicago Board Options Exchange, known by its ticker symbol VXN. The VXN is a measure of implied volatility for the NASDAQ 100 (NDX).
Ceiling The highest level of allowance permitted for a certain good, rate, or transaction.
Central Bank A bank providing services for a country's government and major commercial banks.
Certainty Equivalent The return that would be accepted for the chance at a higher, but uncertain, amount.
Certificate Another name for stock, certificate actually refers to the physical piece of paper representing ownership in a company.
Certificate of Deposit - CD A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified interest rate, and can be issued in any denomination. CDs are generally issued by commercial banks.
Certificate of Government Receipts (COUGRs) Representing synthetic securities offered by the firm AG Becker Paribas, COUGRs were derived by stripping U.S. Treasury fixed income securities of their coupon payments and providing payment of face value.
Certificate of Indebtedness A short-term fixed income security issued by the United States Treasury that has a coupon.
Certificate of Participation - COP A type of financing where an investor purchases a share of the lease revenues of a program rather than the bond being secured by those revenues.
Certificated Stock A stock of commodity that has been inspected by qualified representatives and determined to be of basis grade.
Certificates of Accrual on Treasury Securities - CATS Issued by the U.S. Treasury and stripped by a financial intermediary, these products are sold at a significant discount from face value and pay no interest during their lifetime. However, they return full face value and cannot be called away.
Certified Check A check certified by a bank to show sufficient funds within the account meet the amount the check is drawn for.
Certified Financial Planner (TM) - CFP (TM) The CFP(TM) legal team has provided their official definition, along with trademarks: CFP(TM), Certified Financial Planner(TM), and marks are certification marks owned by the Certified Financial Planner Board of Standards, Inc. These marks are awarded to individuals who successfully complete the CFP Board's initial and ongoing certification requirements.
Certified Investment Management Consultant - CIMC CIMC's have completed extensive course work and passed NASD proctored examinations for Levels I and II of the Institute for Certified Investment Management Consultants' course. CIMCs must also meet the Institute's requirements concerning experience in consulting and managed accounts, and adhere to its Code of Ethics and continuing education requirements.
Certified Investment Management Specialist - CIMS A designation by the Institute for Investment Management Consultants to associate members who pass an exam and meet financial services work-experience requirements.
Certified Public Accountant - CPA A designation by the American Institute of Certified Public Accountants for those who pass an exam and meet work-experience requirements.
Chaikin Oscillator An oscillator created by subtracting a 10-day EMA from a 3-day EMA of the accumulation/distribution line.
Chameleon Option An option that has the ability to change its structure, should certain pre-determined terms of the contract be met.
Change 1. For an option or futures contract, the difference between the current price and the previous day's settlement price.
2. For an index or average, the difference between the current value and the previous day's market close.
3. For a stock or bond quote, the difference between the current price and the last trade of the previous day.
Changer The name given to a clearing member that is willing to assume the opposite position of a futures contract within a larger alternative exchange, of which it also is a clearing member.
Channel 1. The system of intermediaries between the producers, suppliers, consumers, etcetera, for the movement of a good or service.
2. The technical range between support and resistance levels that a stock price has traded in for a specific period of time.
Channel Check A method of independent stock analysis whereby company information is supplied by third parties.
Channel Stuffing A deceptive business practice used by a company to inflate its sales and earnings figures by deliberately sending retailers along its distribution channel more products than they are able to sell to the public.
Chaos Theory Also referred to as non-linear dynamics, chaos theory is a mathematical concept explaining that it is possible to get random results from normal equations. The main precept behind this theory is the underlying notion of small occurrences significantly affecting the outcomes of seemingly unrelated events.
Chapter 10 Named after the U.S. bankruptcy code 10, chapter 10 discusses how a company can file for court protection.
Chapter 11 Named after the U.S. bankruptcy code 11, chapter 11 is a form of bankruptcy that involves a reorganization of a debtor's business affairs and assets. It is generally filed by corporations which require time to restructure their debts. Chapter 11 gives the debtor a fresh start, subject to the debtor's fulfillment of its obligations under its plan of reorganization.
Chapter 7 A bankruptcy proceeding where a company stops all operations and goes completely out of business. A trustee is appointed to liquidate (sell) the company's assets, and the money is used to pay off debt.
Charge Off 1. A debt that is deemed uncollectible and written off. Also known as a bad debt.
2. A one time expense incurred by a company that negatively affects earnings.
Chargeback The charge a credit card merchant pays to a customer after the customer successfully disputes an item on his or her credit card statement.
Charitable Lead Trust A trust designed to reduce beneficiaries' taxable income by first donating a portion of the trust's income to charities and then, after a specified period of time, transferring the remainder of the trust to the beneficiaries.
Charitable Remainder Trust A tax-exempt irrevocable trust designed to reduce the taxable income of individuals by first dispersing income to the beneficiaries of the trust for a specified period of time and then donating the remainder of the trust to the designated charity.
Chartered Financial Analyst - CFA A professional designation given by the Association for Investment Management and Research (AIMR) that measures the competence and integrity of financial analysts. Candidates are required to pass three levels of exams covering areas such as accounting, economics, ethics, money management, and security analysis.
Chartered Investment Councelor - CIC A designation by the Investment Counsel Association to those holding CFAs and currently working as investment counselors.
Chartered Market Technician - CMT A professional designation given by the Market Technicians Association (MTA) to financial professionals who prove their proficiency in technical analysis.
Chartist Another name for technical analyst. This is a person who uses charts to identify patterns that can suggest future activity.
Chastity Bond A bond designed to prevent unwanted takeovers by maturing at par value once a takeover is complete.
Chattel Mortgage A term used when describing a mobile or manufactured home mortgage. Specifically when the home is not financed with the land.
Cheap Stock The illegal practice of issuing stock options at artificially low prices shortly before an initial public offering.
Cheapest to Deliver - CTD The least expensive underlying product that can be delivered upon expiry to satisfy the requirements of a derivative contract.
Check A written, dated, and signed instrument that contains an unconditional order from the drawer that directs a bank to pay a definite sum of money to a payee.
Check Representment A method whereby checks from accounts with insufficient funds are repeatedly deposited until funds are available.
Checking Account A deposit account for funds intended for quick turnover. Checking accounts offer very low interest on unused cash balances.
Cherry Picking 1. The act of investors choosing investments that have performed well within another portfolio in anticipation that the trend will continue.
2. Relating to bankruptcy proceedings whereby the courts uphold contracts favorable to bankrupt companies, but annul those that are unfavorable.
CHF In currencies, this is the abbreviation for the Swiss Franc.
Chicago Board of Trade - CBOT A commodity exchange that trades in both agricultural and financial contracts.
Chicago Board Options Exchange - CBOE A major marketplace exclusively for trading individual equity, index, and interest rate options.
Chicago Mercantile Exchange - CME The second largest exchange in the world for futures and options on futures, the largest in the US. Trading involves mostly futures on interest rates, currency, equities, stock indices, and a small amount on agricultural products.
Chief Executive Officer - CEO This is the senior manager who is responsible for overseeing the activities of an entire company.
Chief Financial Officer - CFO This is the senior manager who is responsible for overseeing the financial activities of an entire company. This includes signing checks, monitoring cash flow, and financial planning.
Chief Operating Officer - COO The senior manager who is responsible for managing the company's day-to-day operations and reporting them to the CEO.
Child Tax Credit A credit given to taxpayers for each dependent child that is under the age of 17 at the end of the tax year.
China Concepts Stock The stock of a company whose assets or earnings have significant activities in China.
Chinese Wall A slang term for the barrier within a brokerage firm that prevents insider information from being handed out by corporate advisers to investment traders.
Choke Price An economic term used to describe the price at which the quantity demanded of a good is equal to zero.
Chooser Option An option where the investor has the opportunity to choose whether the option is a put or call at a certain point in time during the life of the option.
Churn Rate The percentage of subscribers to a service that discontinue their subscription to that service in a given time period. In order for a company to expand its clientele, its growth rate (i.e. its number of new customers) must exceed its churn rate.
Churning 1. An unethical practice employed by some brokers to increase their commissions by excessively trading in a client's account. This practice violates the NASD Fair Practice Rules. It is also referred to as "twisting."
2. A period of heavy trading with few sustained price trends and little movement in stock market indexes.
CINS Number An acronym standing for the "CUSIP International Numbering System," which provides identification of international securities.
Circuit Breaker Refers to any of the measures used by stock exchanges during large sell-offs to avert panic selling. Sometimes called a "collar."
Circular Trading A fraudulent trading scheme where sell orders are entered by a broker who knows that offsetting buy orders, the same number of shares at the same time and at the same price, either have been or will be entered.
Circus Swap A swap with the features of both a currency swap and an interest rate swap.
CIS Compulsive Idiot Syndrome
This is when you keep buying a stock as it falls. You can't help yourself and you find you are losing more and more money. The only cure known to man is a Frontal Lobe removal or Lobotomy. Your thought process remains about the same, but you know longer know you are an Idiot.
CIS Herding CIS Herding is a person who suffers from CIS (Compulsive Idiot Syndrome) and he somehow becomes a leader in a group of idiots. When this leader idiot buys a stock this triggers idiots everywhere. This creates Drooling to occur and leads to DIS (Drooling Idiot Syndrome)
Class In the most general form, a class is a group of securities with similar features.
Class A Shares A division of common stock accompanied by more voting rights than Class B shares.
Class Action An action where an individual represents a group in a court claim. The judgment from the suit is for all the members of the group (class).
Class B Shares A division of common stock accompanied by fewer voting rights than Class A Shares.
Classical Economics Classical Economics refers to work done by a group of economists in the 18th and 19th centuries. They developed theories about the way markets and market economies work. The study was primarily concerned with the dynamics of economic growth. It stressed economic freedom and promoted ideas such as laissez-faire and free competition.
Classified Board An elected board of directors. The members serve longer terms, and elections are staggered in hopes of creating a level of continuity.
Classified Shares The separation of company equity into more than one class of common shares, usually called "Class A" and "Class B."
Clawback 1. Previously given monies or benefits that are taken back due to specially arising circumstances.
2. A retraction of stock prices or of the market in general.
Clean Balance Sheet Refers to a company whose balance sheet has very little or no debt.
Clean Price The price quoted for a bond excluding accrued interest.
Clearing The procedure by which an organization acts as an intermediary and assumes the role of a buyer and seller for transactions in order to reconcile orders between transacting parties.
Clearing Corporation An organization associated with an exchange to handle the confirmation, settlement and delivery of transactions, fulfilling the main obligation of ensuring transactions are made in a prompt and efficient manner. Also referred to as "clearing firms" or 'clearing houses."
Clearing Fee A fee charged by clearing corporations for their services provided to investment firms.
Clearing House A firm that guarantees the obligations of the parties in an exchange traded security or derivative transaction.
Clearing Member Trade Agreement - CMTA An agreement by which an investor may enter derivative trades with a limited number of different brokers and later consolidate these trades with one brokerage house for clearing.
Clearstream International A European clearing corporation, this organization supports over 2500 different companies in 80 locations worldwide.
Click Through Rates The percent of individuals viewing a Web page who click on a specific banner ad appearing on the page.
Clientele Effect The theory that a company's stock price will move according to investor demand and goals when a tax, dividend, or other policy change affects the company.
Cliff Vesting A type of vesting that occurs entirely at a specified time rather than gradually.
Climax Following a protracted period of selling or buying, a point wherein market trends are retarded or discontinued.
Clinton Bond A bond that is said to have no principal, no interest and no maturity.
Cliquet An extended option that periodically settles and resets its strike price at the level of the underlying during the time of settlement.
Clone Fund A mutual fund that replicates the performance or strategy of an existing mutual fund or index through the use of derivatives.
Close 1. The end of a trading session. The closing price is what's quoted in the newspaper.
2. The final procedure in a home sale, documents are signed and recorded. This is the time when the property ownership is transferred.
Close Period The time period between the completion of a company's balance sheet and the announcing of the results to the public.
Close Position Getting out of a position in a particular stock or security.
Closed End Investment When an investment company issues a fixed number of shares in an actively managed portfolio of securities. The shares are traded in the market just like common stock.
Closed Market Transaction An order placed by an insider, after all appropriate documentation is filed, to buy or sell restricted securities from within the company's own treasury.
Closely Held Shares A term referring to shares held by individuals closely related to a company.
Closet Indexing A portfolio strategy does not exactly replicate an index, but is fairly close.
Closing 1. The end of a trading session. The closing price is what's quoted in the newspaper.
2. The final procedure in a home sale, documents are signed and recorded. This is the time when the property ownership is transferred.
Closing Bell A bell that rings to signify the end of a trading session.
Closing Tick The number of stocks which closed higher than their previous trade minus the number of stocks whose closing prices were lower than their previous trade. A positive closing tick means that there was buying at the close and indicates strength, the opposite is true for a down closing tick.
CLP In currencies, this is the abbreviation for the Chili Peso.
Collateral Properties or assets that are offered to secure a loan or other credit. Collateral becomes subject to seizure on default.
Collateral Trust Bond A bond that is secured by the securities of the companies that are controlled by the issuing company.
Collateralized Bond Obligation - CBO An investment-grade bond backed by a pool of junk bonds. Junk bonds are typically not investment grade, but because they pool several types of credit quality bonds together, they offer enough diversification to be "investment grade."
Collateralized Debt Obligation - CDO An investment-grade security backed by a pool of bonds, loans, and other assets. CDOs do not specialize in one type of debt.
Collateralized Loan Obligation - CLO A special purpose vehicle (SPV) with securitization payments in the form of different tranches. Financial institutions back this security with receivables from loans.
Collateralized Mortgage Obligation - CMO A type of mortgage backed security that creates separate pools of pass-through rates for different classes of bondholders with varying maturities, called tranches. The repayments from the pool of pass-through securities are used to retire the bonds in the order specified by the bonds prospectus.
Collective Fund An investment vehicle that combines tax exempt assets of various individuals and organizations in order to create a well diversified portfolio.
Com-Dev Company Short form for "Commercial Development Company." These companies build and sell/lease commercial real-estate, software, or applications for wide-scale commercial use.
Combat Zone An area designated as a war zone during a specified period. Members of the military do not need to claim taxable income they earn while working in a combat zone.
Combination When an investor holds a position in both call and put options on the same asset.
Commerce The buying and selling of goods, especially on a large scale.
Commercial A term used to refer to any party or organization involved in producing, transporting, or merchandising a commodity.
Commercial Bank A financial institution that provides services such as a accepting deposits and giving business loans.
Commercial Grain Stock A term used to describe any grain stored within U.S. Borders.
Commercial Mortgage Backed Securities - CMBS Similar to a Mortgage Backed Security, but secured by loans with commercial property instead of residential property.
Commercial Paper An unsecured, short-term loan issued by a corporation, typically for financing accounts receivable and inventories. It is usually issued at a discount reflecting prevailing market interest rates.
Commercial Real Estate Property that is solely used for business purposes.
Commingled Fund A type of mutual fund consisting of assets from several accounts that are blended together. Sometimes called a "pooled fund."
Commingling 1. In the context of securities: the mixing of customer-owned securities with brokerage-owned securities.
2. In the context of trust banking: the pooling of individual customer accounts into a fund, a share of which each contributing customer owns. This works similarly to a mutual fund.
Commission A service charge assessed by an agent in return for arranging the purchase or sale of a security or real estate. The commission must be fair and reasonable, considering all the relevant factors of the transaction. Commissions vary widely from broker to broker.
Commission House A brokerage or merchant firm which buys and sells futures contracts for customer accounts.
Commitment Fee A fee lenders charge their borrowers for unused credit or credit that has been promised at a specified future date.
Committed Facility A credit facility whereby terms and conditions are clearly defined by the lending institution and imposed upon the borrowing company.
Commoditization 1. A situation when illiquid financial contracts are changed or modified in a way that promotes trading and results in a more liquid market.
2. Making a product into a commodity.
Commodity Any bulk good traded on an exchange or in the cash market.
Commodity Futures Trading Commission - CFTC A U.S. federal agency established by the Commodity Futures Trading Commission Act of 1974. It ensures the open and efficient operation of the futures markets. There are five futures markets commissioners who are appointed by the president (subject to Senate approval).
Commodity Pool A fund that collects investor contributions for use in future and commodity option trading.
Commodity Pool Operator - CPO The person responsible for investing a commodity pool's assets in commodity-futures and options positions.
Commodity Research Bureau Index - CRB An index that measures the overall direction of commodity sectors. The CRB was designed to isolate and reveal the directional movement of prices in overall commodity trades.
Commodity Swap A swap where exchanged cash flows are dependent on the price of an underlying commodity. This is usually used to hedge against the price of a commodity.
Common Stock A security that represents ownership in a corporation. Holders of common stock exercise control by electing a board of directors and voting on corporate policy. Common stockholders are on the bottom of the priority ladder for ownership structure. In the event of liquidation common shareholders have rights to a company's assets only after bond holders, preferred shareholders, and other debt holders have been paid in full.
Comparative Advantage A situation where a country, individual, company, or region can produce a good at a lower opportunity cost than that of a competitor.
Competitive Bid A process whereby an underwriter submits a sealed bid to the issuer. The issuer awards the contract to the underwriter with the best price and contract terms.
Competitive Tender A method of distributing debt issues. Bids are submitted by primary distributors and those who bid the highest receive the debt issue.
Compliance Department The department within a brokerage firm that oversees the trading and market-making activities of the firm.
Compound The ability of an asset to generate earnings that are then reinvested and generate their own earnings.
Compound Annual Growth Rate - CAGR The year over year growth rate of an investment over a specified period of time.Calculated by taking the nth root of the total percentage growth rate where n is the number of years in the period being considered.This can be written as:
Compound Option An option on an option. Examples include a call on a call, a put on a put, a call on a put, and a put on a call.
Compounding The ability of an asset to generate earnings that are then reinvested and generate their own earnings.
Comprehensive Income Equals net income minus all recognized changes in equity during a period.
Comps Another term for "same store sales," which helps investors determine how well a company's brand is doing and how the stores are increasing revenue.
Concession A selling group's compensation in a stock or bond underwriting agreement.
Concession Agreement A right granted by a government to a corporation. It specifies rules under which the company can operate locally.
Condominium A large property complex that is divided into individual units and sold. Ownership usually includes a non-exclusive interest in certain "common properties" controlled by the condominium management.
Condor Spread Similar to a butterfly spread, a condor is an options strategy that also has a bear and a bull spread, except that the strike prices on the short call and short put are different.
Conduit Financing A financing arrangement involving a government or other qualified agency using its name in an issuance of fixed income securities for a non-profit organization's large capital project.
Conduit IRA A traditional IRA that holds only assets that were distributed from a qualified plan.
Conduit Theory A theory stating that an investment firm passing all capital gains, interest, and dividends onto their customers/shareholders shouldn't be levied at the corporate level like most regular companies are.
Conference Call An event in which investors can call into a special phone number and hear the management of their company comment on the financial results of the recently completed quarter.
Confirmation 1. The occurrence of two or more indicators corresponding with one another and thereby corroborating the predicted trend.
2. The written acknowledgment provided by a broker indicating that a trade has been completed. It includes details such as the date, price, commission, fees, settlement terms, and so on.
Conforming Loan A conventional mortgage under $203,150 that conforms to the loan amounts and mortgage guidelines used by Fannie Mae and/or Freddie Mac.
Congestion 1. A market situation whereby the demand of contract holders wishing to exit their existing positions exceeds the supply of willing participants wishing to enter into the offsetting position.
2. A period of time when a stock trades either below resistance or above support, or both.
Conglomerate A company that consists of a grouping of businesses from unrelated streams.
Consent Solicitation A solicitation by one party to the stakeholders of a particular security for the consent of a material change.
Conservatorship A circumstance in which the court declares an individual unable to take care of legal matters and appoints another individual, known as a conservator, to do so.
Consignment When goods are delivered to another company with the understanding that payment for the goods is only made once the goods are sold.
Consolidate To combine the assets, liabilities, and other financial items of two or more entities into one.
Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries.
Consolidated Omnibus Budget Reconciliation Act - COBRA A COBRA health plan states that if you leave your job for any reason and were an active participant in the company's health plan prior to your departure date, you have the right, if you wish, to continue the health insurance coverage you and your family received, for 18 months.
Consolidated Tape An electronic system that continuously reports data on the sales volume and price of exchange traded securities.
Constant Maturity Used by the Federal Reserve Board to quote the yields on various treasury securities, adjusted to an equivalent maturity.
Constant Maturity Swap - CMS A variation of the regular interest rate swap, whereby the floating interest portion is reset periodically according to a fixed maturity market rate of a product with a duration extending beyond that of the swap's reset period.
Consumer Confidence Index - CCI A survey by the Conference Board that measures how optimistic or pessimistic consumers are with respect to the economy in the near future.
Consumer Credit A debt that someone incurs for the purpose of purchasing a good or service.
Consumer Price Index - CPI A measure of price changes in consumer goods and services such as gasoline, food, and automobiles. Sometimes referred to as "headline inflation."
Consumer Staples The industries that manufacture and sell food/beverages, tobacco, prescription drugs, and household products.
Contango When the futures price is above the expected future spot price. Consequently, the price will decline to the spot price before the delivery date.
Contingency An economic event, usually negative, that is in the process of occurring and, therefore, has not yet been resolved.
Contingent Asset An asset in which the possibility of ownership depends solely upon future events uncontrollable by the company.
Contingent Convertibles - CoCos A security similar to a traditional convertible bond in that there is a strike price (the cost of the stock when the bond converts into stock). What differs is that there is another price, even higher than the strike price, which the company's stock price must reach before an investor has the right to make that conversion (known as the "upside contingency").
Contingent Deferred Sales Charge - CDSC In the context of mutual funds, it is a back-end load charged only when a special circumstance occurs.
Contingent Immunization A method of fixed income portfolio management, whereby managers are granted significant powers of control over the selection of products to be added and removed from the portfolio, as long as the products remain profitable. Should these products become unprofitable past a set threshold, the manager must then capitalize the security under immunization procedures.
Contingent Liability 1. The possibility of an obligation to pay certain sums dependent on future events.
2. Defined obligations by a company that must be met, but the probability of payment is minimal.
Contingent Order 1. An order involving the simultaneous execution of two or more transactions.
2. An order whose execution depends upon the execution and/or price of another security.
Continuation Pattern A pattern found in a chart that shows a current trend might continue.
Continuation Pattern A pattern found in a chart that shows a current trend might continue.
Continuous Compounding The process of earning interest on top of interest. The interest is earned constantly, and immediately begins earning interest on itself.
Continuous Net Settlement – CNS An automated book-entry accounting system. CNS centralizes the settlement of compared transactions and maintains an efficient flow of security and money balances.
Contributed Surplus Found in the section of shareholders' equity on a balance sheet, it is the amount of funds which come from sources other than earnings.
Contribution Margin A cost accounting concept calculated as total revenue from a product or service less the total variable cost.
Contributory Value A real estate term that refers to the contribution a particular component has to the value of the whole property.
Controller In most organizations the controller is the top managerial and financial accountant. The controller supervises the accounting department and assists management in interpreting and utilizing managerial accounting information.
Convenience Yield The benefit or premium associated with holding an underlying product or physical good, rather than the contract or derivative product.
Convention Expenses Any travel expenses incurred while at a business convention. These expenses are tax deductible if they are business or job related.
Conventional Mortgage Conventional mortgage falls within Fannie Mae guidelines, and cover loans up to predetermined amount.
Convergence A movement in the price of a futures contract toward the price of the underlying cash commodity. At the start, the contract price is higher because of the time value.
Conversion 1. The translation of a convertible security into a predetermined number of shares.
2. A strategy used by future traders whereby they mix the purchase of option and futures contracts.
Conversion Premium The amount by which the price of a convertible security exceeds the current market value of the common stock into which it may be converted.
Conversion Price The price per share at which a convertible security can be converted into common stock.
Convertibility The ease with which a country's currency can be converted into gold or another currency.
Convertible Adjustable Preferred Stock - CAPS A preferred, floating rate issue, whose interest rate is tied to Treasury security rates. They can be exchanged for common stock or cash after the next period's dividend rates are announced. The shares received upon conversion are equal in market value to the par value of the preferred.
Convertible Arbitrage An investing strategy that involves the long position on a convertible security and a short position in its converting common stock.
Convertible Bond A bond that can be converted into a predetermined amount of the company's equity at certain times during its life. Convertibles are sometimes called CVs.
Convertible Debenture Any type of debenture that can be converted into some other security.
Convertible Preferred Stock Preferred stock that can be converted into common stock at the option of the holder.
Convertible Subordinate Note A short-term debt security (note), that can be changed into common stock (convertible) and ranks below other loans (subordinate).
Convertibles Securities, usually bonds or preferred shares, that can be converted into common stock.
Convexity A measure of the curvature in the relationship between bond prices and bond yields.
Conveyance A written instrument, such as a deed or lease, that transfers some ownership interest in real property from one person to another.
Conveyance Tax A tax imposed on the transfer of real estate property.
Cook the Books A fraudulent activity done by some corporations to falsify their financial statements.
Cookie Jar Accounting An accounting practice where a company uses generous reserves from good years against losses that might be incurred in bad years.
Cooling-off Rule A term referring to law pertaining to newly-entered contracts that allows both sides of the party a period of time (after the contract has been signed) to release themselves from any obligations without penalty.
COP In currencies, this is the abbreviation for the Colombian Peso.
Coppock Curve The Coppock formula was introduced in Barron's in 1962 by Edwin Sedgwick Coppock. The Coppock Curve is a long-term price momentum indicator used primarily to recognize major bottoms in the stock market.
Core Earnings The revenue derived from a company's main or principal business less all associated expenses.
Core Holding An investment that you plan on keeping in your portfolio for a very long period of time, sometimes permanent.
Core Plus A fixed-income style that permits managers to add instruments with greater risk and greater potential return, such as high yield, global, and emerging market debt, to their core portfolios of investment-grade bonds.
Corner 1. The act of securing enough controlling interest or ownership within a single security so that manipulation of price can occur.
2. A rare situation occurring in commodity markets wherein the quantity of underlying securities and commodities available are exceeded by the commitments of delivery quantities on future contracts.
Corner A Market To acquire enough shares of a particular security in order to manipulate its price.
Corporate Action Any event which brings material change to a stock.
Corporate Bond A debt security issued by a corporation.
Corporate Cannibalism An act of self-infringement upon market share by corporations through the issuance of new products.
Corporate Finance Any financial or monetary activity that deals with a company and its money.
Corporate Governance The relationship between all the stakeholders in a company. This includes the shareholders, directors, and management of a company, as defined by the corporate charter, bylaws, formal policy, and rule of law.
Corporate Inversion The act of a parent company, whose headquarters are located within U.S. borders, switching registration with their offshore subsidiary in order to take advantage of foreign tax benefits.
Corporate Tax A levy placed on the profit of a firm; different rates are used for different levels of profits.
Corporation The most common form of business organization. The total worth of the organization is divided into shares of stock, each representing a unit of ownership. A corporation is ongoing and the owners face only limited liability.
Correction A price reaction (usually negative) of at least 10% for a stock, bond, commodity, or index.
Correlation A complementary or parallel relationship between two securities.
Correlation Coefficient A measure that determines the degree to which two variable's movements are associated.The correlation coefficient is calculated as:
Correspondent The name given to a bank, broker, dealer, or financial institution that acts on behalf of another financial institution with limited or restricted access to the financial markets where a transaction must occur.
Cost and Freight - CFR A trade term requiring the seller to arrange for the carriage of goods by sea to a port of destination, and provide the buyer with the documents necessary to obtain the goods from the carrier. Under CFR, the seller does not have to procure marine insurance against the risk of loss or damage to the goods during transit.
Cost Basis The purchase price after commissions or other expenses.
Cost of Capital The required return necessary to make a capital budgeting project worthwhile. Cost of capital would include the cost of debt and the cost of equity.
Cost of Carry Costs incurred because of an investment position.
Cost of Equity The return that stockholders require for a company. The traditional formula is the dividend capitalization model:
Cost of Funds The interest rate paid on an outstanding loan.
Cost of Goods Sold - COGS A figure reflecting the cost of the product or good that a company sells to generate revenue, appearing on the income statement as an expense unto itself. Also referred to as "cost of sales."
Cost of Tender The total charges associated with the delivery and certification of commodities underlying a futures contract.
Cost Per Click - CPC A web site which uses CPCs would bill by the number of times a visitor clicks on a banner, instead of by the number of impressions.
Cost Per Thousand - CPM Web sites that sell advertising will guarantee an advertiser a certain number of impressions quoted at X dollars per CPM.
Cost Synergy In the context of mergers, cost synergy is the savings in operating costs expected after two companies, who compliment each other's strengths, join.
Cost, Insurance, and Freight - CIF A trade term requiring the seller to arrange for the carriage of goods by sea to a port of destination, and provide the buyer with the documents necessary to obtain the goods from the carrier.
Cost-Push Inflation When inflation increases because of a rise in the costs of production.
Council of Petroleum Accountants Societies - COPAS A council created to discuss and solve the difficulties inherent in accounting in the oil and gas industry.
Count A trend analysis using point and figure charts to estimate the vertical movement of prices.
Counter Cyclical Stock A stock whose price will tend to move in the opposite directions of the general economic trend.
Coupon Pass The purchase of treasury notes or bonds from dealers, by the Federal Reserve.
Covariance A measure of the degree to which returns on two risky assets move in tandem. A positive covariance means that asset returns move together. A negative covariance means returns vary inversely. One method of calculating covariance is by looking at return surprises (deviations from expected return) in each scenario. Another method is to multiply correlation between the two variables by the standard deviation of each variable.
Covenant A promise in an indenture, or any other formal debt agreement, that certain activities will or will not be carried out.
Cover The act of completing a transaction in order to remove any obligations.
Coverage Initiated When a brokerage or analyst issues his/her first rating on a particular stock.
Coverage Ratio A type of accounting ratio that helps measure a company's ability to meet its obligations satisfactorily.
Coverdell Education Savings Account - ESA A tax-deferred account created by the U.S. government to assist families in funding educational expenses.
Covered Call Having a long position in an asset combined with a short position in a call option on the same underlying asset.
Covered Security A class of securities, created by the NSIMA, that enjoys federally imposed exemptions from state restrictions and regulations. Most stocks trading in the US are covered securities.
Crack A trading strategy used in energy futures to establish a refining margin.
Crack Spread The spread created when purchasing oil futures and offsetting the position by selling gasoline and heating oil futures.
Crammed Down 1. A situation in which venture capitalists refuse to invest in a new project unless the preceding investors of the company lower the value of their original investment.
2. A bankruptcy procedure that allows a bankruptcy court to initiate a reorganization plan for a company despite objections from creditors. The creditors will still maintain collateral on the company as long as the firm offers repayment of the "secured portion" or fair market value of the collateral in their repayment plan.
Crash A major decline in a financial market.
CRC In currencies, this is the abbreviation for the Costa Rican Colon.
Creative Destruction A term coined in 1942 by Joseph Schumpeter in his work, Capitalism, Socialism and Democracy, to denote a "process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one."
Credit 1. A contractual agreement in which a borrower receives something of value now, with the agreement to repay the lender at some date in the future. Also, the borrowing capacity of an individual or company.
2. An accounting entry system that either decreases assets or increases liabilities.
Credit Card A card allowing someone to make a purchase on borrowed money. Credit cards are one of the most popular forms of payment for consumer goods and services in the United States.
Credit Cliff A slang term meaning that credit deterioration could be compounded by provisions such as rating triggers or financial covenants. These can put pressure on the company's liquidity or its business to a material extent.
Credit Crunch An economic condition whereby investment capital is difficult to obtain. Banks and investors become weary of lending funds to corporations thereby driving up the price of debt products for borrowers.
Credit Default Swap A swap designed to transfer the credit exposure of fixed income products between parties.
Credit Derivative Privately held negotiable bilateral contracts that allow users to manage their exposure to credit risk. Credit Derivatives are financial assets like forward contracts, swaps, and options for which the price is driven by the credit risk of economic agents (private investors or governments).
Credit Enhancement A method whereby a company attempts to improve its debt or credit worthiness.
Credit Linked Note - CLN A security with an embedded credit default swap allowing the issuer to transfer a specific credit risk to credit investors.
Credit Rating An assessment of the credit worthiness of individuals and corporations. It is based upon the history of borrowing and repayment, as well as the availability of assets and extent of liabilities.
Credit Risk The possibility of a loss occurring due to the financial failure to meet contractual debt obligations.
Credit Spread 1. The spread between Treasury securities and non-Treasury securities that are identical in all respects except for quality rating.
2. An options strategy where a high premium option is sold and a low premium option is bought on the same underlying security.
Credit Union Member-owned financial co-operative. These institutions are created and operated by its members and profits are shared amongst the owners.
Creditor One who extends credit by giving a person or organization permission to borrow money if they promise to pay it back at a later date.
Credo A Latin word which means “a set of fundamental beliefs or a guiding principle.”; For a company, a credo is like a mission statement.
Critical Mass A very important or crucial stage in a company's development.
Cum Warrant A condition in which the buyer of a security is entitled to a warrant that has been declared, but not distributed.
Cumulative Dividend A limitation placed upon corporations ensuring the payment of preferred dividends before making distributions to common shareholders.
Cumulative Volume Index - CVI A momentum indicator that gauges the movement of funds into and out of the entire stock market by adding the difference between advancing and declining stocks to a running total.
Cumulative Voting The procedure of voting for a company's directors, where each shareholder is entitled one vote per share times the number of directors to be elected. This is sometimes known as proportional voting.
CUP In currencies, this is the abbreviation for the Cuban Peso.
Cup and Handle A pattern on bar charts that resembles a cup with a handle. The cup is in the shape of a "U" and the handle has a slight downward drift. The right hand side of the pattern has low trading volume. It can be as short as seven weeks and as long as 65 weeks.As the stock comes up to test the old highs, the stock will incur selling pressure by the people who bought at or near the old high. This selling pressure will make the stock price trade sideways with a tendency towards a downtrend for four days to four weeks... then it takes off. Below is an example of a cup and handle chart pattern:
Curb Trading Trading that occurs outside of general market regulations, commonly through computers or telephones after the official exchanges have closed.
Currency Money circulated within an economy, including coins and paper notes.
Currency Basket A selected group of currencies whose weighted average is used as a measure of the value or the amount of an obligation.
Currency Carry Trade An investment position involving the borrowing of funds in a foreign market and the purchase of an offsetting position in fixed income securities in the domestic market. Individuals attempt to take advantage of low interest rates in a foreign country.
Currency Forward A forward contract that locks-in the price an entity can buy or sell currency on a future date.
Currency Futures A transferable futures contract that specifies the price at which a specified currency can be bought or sold at a future date.
Currency Option A contract that grants the holder the right, but not the obligation, to buy or sell currency at a specified price during a specified period of time.
Currency Overlay The outsourcing of currency risk management to a specialist firm, known as the overlay manager. This is used in international investment portfolios to separate the management of currency risk from the asset allocation and security selection decisions of the investor's money managers.
Currency Swap A swap that involves the exchange of principal and interest in one currency for the same in another currency.
Current Account The difference between a nation's total exports of goods, services, and transfers, and its total imports of them. Current account balance calculations exclude transactions in financial assets and liabilities.
Current Assets Appearing on a company's balance sheet, it represents cash, accounts receivable, inventory, marketable securities, prepaid expenses, and other assets that can be converted to cash within one year.
Current Cost of Supplies - CCS This refers to the net income of a company after taking into account the increase (or decrease) in expenses over the reporting period. It is typically used by commodity reliant businesses.
Current Delivery A type of futures contract that requires the delivery of underlying commodities to occur in the present or within the next few months.
Current Exposure Method A method of measuring the cost of default within a swap agreement.
Current Liabilities Usually appearing on a company's balance sheet, it represents the amount owed for interest, accounts payable, short-term loans, expenses incurred but unpaid, and other debts due within one year.
Current Maturity The interval between the present date and the maturity date of a bond.
Current Price The "real time" price of a security trading on an exchange.
Current Ratio Indicator of company's ability to pay short-term obligations; calculated by dividing current assets by current liabilities.
Current Yield Annual income (interest or dividends) divided by the current price of the security.
Cushion Bond A type of callable bond that sells at a premium because the issued coupon payments are above market interest rates.
CUSIP Number A number identifying all stocks and registered bonds. The Committee on Uniform Securities Identification Procedures (CUSIP) oversees the entire CUSIP system.
Custodial Account 1. An account created at a bank, brokerage firm or mutual fund company that is managed by an adult for a minor that is under the age of 18 to 21 (depending on state legislation).
2. A retirement account managed for eligible employees by a custodian.
Custodian A financial institution that has the legal responsibility for a customer's securities. This implies management as well as safekeeping.
Custody-Only Trading A system in which shares must be registered to the holder by name and can only be traded in physical form.
Customer Type Indicator Codes - CTI A system that uses four different codes to indicate the types of transactions that, on futures exchanges, are made by brokers on behalf of different clients and themselves.
Cutting a Melon A declaration of a large stock or cash dividend that is in addition to the regular distribution.
CVE In currencies, this is the abbreviation for the Cape Verde Escudo.
Cyclical Industry A term describing an industry that is sensitive to the business cycle and price changes. Many cyclical industries produce durable goods such as raw materials and heavy equipment.
Cyclical Stock A stock that rises quickly when economic growth is strong, and falls rapidly when growth is slowing down.
Cyclical Unemployment Unemployment resulting from changes in the business cycle.
Cylinder A term used to describe a transaction, involving two derivatives, where there is no initial cost bourne by the investor when entering into the position.
CYP In currencies, this is the abbreviation for the Cyprus Pound.
CZK In currencies, this is the abbreviation for the Czech Koruna.