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Investment Glossary

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Accrued interest
Interest that has accumulated on an investment but has not yet been paid to you. Accrued interest is often factored into the price if you buy or sell an investment before it matures.

A measure of selection risk (also known as residual risk) of a mutual fund in relation to the market. A positive alpha is the extra return awarded to the investor for taking a risk, instead of accepting the market return. For example, an alpha of 0.4 means the fund outperformed the market-based return estimate by 0.4% 0.6 means a fund’s monthly return was 0.6% less than would have been predicted from the change in the market alone.

American Depository Receipt (ADR)
A security created by a U.S. bank that evidences ownership to a specified number of shares of a foreign security held in a depository in the issuing company’s country of domicile. The certificate, transfer and settlement practices for ADRs are identical to those for U.S. securities. U.S. investors often prefer ADRs to direct purchase of foreign shares because of the ready availability of price information, lower transaction costs and timely dividend distribution.

American Stock Exchange

AMEX Composite Index
The American Stock Exchange introduced a new AMEX Composite Index with a new ticker symbol, XAX, on January 2, 1997. The XAX is a market capitalization-weighted, price appreciation index, and replaces the AMEX Market Value Index (XAM) which, since its inception, has been calculated on a total return basis to include the reinvestment of dividends paid by AMEX companies. The new AMEX Composite Index is more comparable with other major indexes, which reflect only the price appreciation of their respective components.

A person who studies financial markets and components of them to contribute strategic data

Annual report
The formal report on a company’s finances and operations sent to all owners of shares in the company. It discloses the company’s business activity during the year.

A type of investment contract that pays you regular income, usually after retirement.

Money that was not paid when it was due, and which is still owing. Most commonly referred to in the context of dividends.

The price at which someone who owns a security offers to sell it; also known as the asked price. (See also Best Ask)

Everything you, or a company, owns or are owed. Any possessions that have value in an exchange.

Asset Allocation
the apportionment of an investment portfolio among the various asset classes or markets (cash, fixed interest, property, and shares) in line with the investment outlook of the investor or investment manager

The receipt of an exercise notice by an options writer that requires him to sell (in the case of a call) or purchase (in the case of a put) the underlying security at the specified strike price.

Averages and Indexes
Statistics that are used to measure the state of the stock market or the economy. They are based on the performance of selected stocks or other indicators, such as the Dow Jones Industrial Average and the TSE 300 Composite Index.

Average Maturity
The average time to maturity of securities held by a mutual fund. Changes in interest rates have greater impact on funds with longer average life.



Basis point
One-hundredth of a percentage point (0.01%).

Someone who expects that the market in general, or the price of a specific investment, will go down.

Bear market
A weak market where prices are falling.

Bearer security
Any investment which does not have the owner’s name listed on it or in the records of the company that issued it. A bearer security may be sold or cashed in by the person who holds it.

The person (or in some cases the estate) named to receive the value of an insurance policy, trusteed account or investment account.

The money an insurance company pays when you make a claim for something covered by an insurance policy.

Measure of a stock’s risk in relation to the market. 0.7 means a stock price is likely to move up or down 70% of the market change; 1.3 means the stock is likely to move up or down 30% more than the market

The price a prospective buyer is prepared to pay at a particular time for trading a unit of a given security. (See also Best Bid)

A rise in a security’s price above a resistance level (commonly its previous high price) or drop below a level of support (commonly the former lowest price.) A breakout is taken to signify a continuing move in the same direction. Can be used by technical analysts as a buy or sell indication.

Bid and ask quotations
Bid is the highest price a buyer will pay for a share or other type of investment. Ask is the lowest price the person selling the share will accept. Together they are referred to as a quotation or quote.

Block Trade
A trade involving a large quantity of stock or large dollar amount of bonds. Loosely, a block trade would involve 10,000 or more stock shares or in excess of US$200,000 in bonds

Blue chip
A leading, well-known company’s stock from which you could expect consistent growth and dividend payments over the long term.

Board lot
A standard trading amount, usually 100 shares, which has been agreed upon by stock exchanges.

A certificate you receive for a loan you make to a company or government. In return, the issuer of the bond promises to pay you interest at a set rate and to repay the loan on a set date.

Book value
For an individual investor, book value is the amount you originally invested plus any interest or dividends you earned that have been reinvested.

Someone who expects that the market in general, or the price of a particular investment, will go up.

Bull market
A strong market where values are rising.

Business day
Any day when most businesses and government offices are open for business. A calendar day is any day of the year.


An investment, such as a bond, that can be ‘called in’ and repaid by the company or government that issued it, before it would normally be due. You are generally paid extra interest if your investment is called in early.

Canadian Investor Protection Fund (CIPF)
A fund set up by the stock exchanges and the Investment Dealers’ Association to protect investors from losses if any member company goes bankrupt. The CIPF covers up to $1,000,000 for losses related to securities and cash balances. The amount of coverage for the cash balances, if any, included in the $1,000,000 may not exceed $60,000. For more information please call CIPF at (416) 866-8366.

Capital gain or loss
The profit or loss you make when you sell an investment. Tax consequences may result.

The document showing that you own a bond, stock, or other investment.

Certified Financial Planner

See Canadian Investor Protection Fund.

The fee you pay for buying or selling investments.

Common share
An investment that gives you part ownership of a company and allows you to vote on major decisions affecting the company.

Raw materials such as grain or precious metals. Contracts for purchase and sale of commodities are sold on commodities exchanges

Compound interest
Interest paid on your initial investment, and then also on the interest as it builds up. Over a period of several years, compounding can have a dramatic effect in making your investment grow.

A printed notice sent to you to confirm you have bought or sold an investment.

A type of investment, usually a bond, debenture or preferred share, which you may exchange for common shares usually of the same company , at a set price and usually by a set date. The company may force you to exchange if the price of its common shares goes above the value of your preferred shares.

The part of a bond which you can present at a bank to receive specified interest payments after the due date.

Canadian Securities Course

Cum dividend
When you buy a share cum dividend it means you will receive an upcoming dividend that has already been announced. If you are not eligible to receive the dividend, the share is said to be ex dividend.

Cyclical share
A share which is particularly sensitive to changes in economic conditions.



Day order
An order you give your Investment Advisor to buy or sell an investment, good only on a specific day.

Another name for a bond. With a debenture, your money is secured by the credit of the company or government issuing it, rather than by specific assets.

Money that has been borrowed and must be repaid, usually with interest and by a set date.

A term used when a person or company breaks the terms of an agreement.

A person elected by the holders of common shares at an annual meeting to direct a company’s policies.

Release of information relevant to a transaction. In a securities transaction, the dealer must disclose details of any commission or remuneration generated by the transaction and any other relevant interests they have

Discount to par
The amount by which a preferred share or bond is sold below its face value. The buyer then receives face value at maturity.

The market price of a share is said to have been ‘discounted’ when an event that is expected to happen, such as an increase in dividends or lower earnings, has been reflected in its price.

The practice of buying several different types of investments over a broad range of industries, sectors and companies in order to reduce your risk if one particular industry, sector or investment performs poorly.

The part of a company’s profits that you may receive if you are a shareholder of the company. Preferred shares earn a set dividend, while the dividends for common shares vary with the company’s profits. Companies are under no legal obligation to pay dividends to their shareholders.

Dollar cost averaging
Investing a set amount in a specific investment at regular intervals. As a result, when the value of the investment goes down, you’re buying more of it, and when it rises, you’re buying less. The overall effect reduces the average cost of your investment.

Dow Jones Industrial Average – (DJIA)
is a price-weighted average of 30 actively traded blue chip stocks, primarily industrials but including American Express Co. and American Telephone and Telegraph Co. Prepared and published by Dow Jones & Co., it is the oldest and most widely quoted of all the market indicators. The components, which change from time to time, represent between 15% and 20% of the market value of NYSE stocks. The DJIA is calculated by adding the closing prices of the component stocks and using a divisor that is adjusted for splits and stock dividends equal to 10% or more of the market value of an issue as well as substitutions and mergers. The average is quoted in points, not in dollars.

Due Diligence
Obligation to be thorough and to proceed with care and caution in matters on behalf of the client



Earnings Per Share (EPS)
Also referred to as Primary Earnings Per Share. Net income for the past 12 months divided by the number of common shares outstanding, as reported by a company. The company often uses a weighted average of shares outstanding over reporting term.

Effective Annualized Seven – Day Yield
Yield for a seven day period including the day reported, calculated by adding one to the base period return used in calculating the standard seven day yield raising the total to the power of 365 divided by seven and subtracting one (NOTE: To be reported on Wednesday only).

Electronic Data Gathering, Analysis, and Retrieval – EDGAR
An electronic system implemented by the SEC that is used by companies to transmit all documents required to be filed with the SEC in relation to corporate offerings and ongoing disclosure obligations. EDGAR became fully operational in 1995.

Ending Net Asset Value
The market value of a fund share on a predetermined end date.

The value of the ownership of an investment

Interval between the announcement and the payment of the next dividend.

Ex-dividend date
The date on or after which a security begins trading without the dividend (cash or stock) included in the contract price.

The process of completing an order to buy or sell securities. Once a trade is executed, it is reported by a Confirmation Report; settlement (payment and transfer of ownership) occurs in the U.S. between one (mutual funds) and five (stocks) days after an order is executed. Settlement times for exchange-listed stocks are in the process of being reduced to three days in the U.S.



Family of Funds
Group of mutual funds managed by the same investment management company. Each fund typically has a different objective; one may be a growth-oriented stock fund, whereas another may be a bond fund or money market fund. Shareholders in one of the funds can usually switch their money into any of the family’s other funds, sometimes at no charge. Family of funds with no sales charges are called no load families. Those with sales charges are called load families.

Face value
The value of a bond or debenture that is printed on the face of the certificate. Face value is usually the amount the issuer will pay at a certain date. Face value is no indication of market value.

Financial Models
Tools used to determine the value of an investment in a company, commodity, currency, government initiative, etc. To build a financial model, an analyst may consider past performance, current market trends, political climate and overall value of the issuer, for example.

Fixed income securities
Investments such as bonds, debentures and mortgage-backed securities that provide you with a regular income.

Futures contract
An agreement to buy or sell an investment or asset at a specified price on a specified date. The price is set through a futures exchange, a trading market like a stock exchange.



Generally Accepted Accounting Principles
A doctrine of the American Institute of Certified Public Accountants that details as well as generalizes the conventions, rules and guidelines of accounting practices.

Gold – GOX
The CBOE Gold Index – (GOX) is an equal-dollar-weighted index composed of 10 companies involved primarily in gold mining and production. The index is re-balanced after the close of business on expiration Friday on the March quarterly cycle.

Green Shoe
A clause in an underwriting agreement that says the issuer will authorize additional shares for distribution by the purchase group in cases of exceptional public demand

Growth shares
Common shares of a company that has excellent prospects for above-average growth. A company which over a period of time seems destined for above average expansion.

GTC order
Good . til canceled order. An order you give your Investment Advisor to buy or sell and investment, usually at a certain price, that remains in effect until it is filled (usually for a period of one month) or until you cancel it.

Guaranteed Investment Certificate (GIC)
An investment where your money (usually at least $1,000) is deposited at a set rate of interest, for a fixed period of time. Generally you can not take your money out early, but there are exceptions.



An investment strategy used to reduce risk by locking in the price to protect against future price changes.

A situation where a security is temporarily not available for trading (e.g. Market Makers are not allowed to display quotes).


Inside Market
The highest bid and the lowest offer prices among all competing Market Makers in a NASDAQ security, i.e., the best bid and offer prices.

Investment Advisor

Mathematical expressions of the value of various groupings of assets. They enable the performance of various market sectors to be measured over time. Examples are the All Ordinaries, All Industrials, and 5-to-10 year bond indices.

Income shares
Shares that pay you higher than usual, regular dividends.

Anyone with access to material information about a company that is not publicly available, including the company’s directors and senior officers. Also, anyone owning more than 10% of the voting shares.

Money you pay for the use of someone else’s money.

Using your money to make money.

Investment company or fund
A company that invests in other companies. There are two types: closed-end funds and open-end or mutual funds. Closed-end funds have a fixed number of shares which are traded on the stock exchange. Open-end or mutual funds continually issue more shares as people want them.

You are considered an ‘investor’ when you choose mostly low-risk investments, as opposed to a speculator, who is prepared to accept calculated risk with the hope of making better-than-average profits, or a gambler, who is prepared to take even greater risks.

(initial public offering) The first issue of stock or other securities by a company for sale to the public



Lagging indicators
Economic indicators, such as the unemployment rate and business spending, that have a delayed reaction to the overall pace of the economy. For example, if consumer spending increases, there will be a delay before manufacturers hire more workers and the unemployment rate begins to fall.

Last Sale Reporting
An electronic entry by NASD Members to The NASDAQ Stock Market of the price and the number of shares involved in a transaction in a NASDAQ security. The trade reported must be submitted to NASDAQ within 90 seconds of the execution of the trade.

Leading indicators
Economic indicators, such as housing starts and stock prices, that signal coming trends in the economy as a whole.

Life insurance
An insurance policy that pays a set amount to those named in your policy when you die.

Limit Order
A Limit Order is an order to buy or sell a stock at a customer specified price.

Listed shares
Shares of publicly owned companies which are traded on a stock exchange.

The commission that is included in the price of most mutual funds. You pay either a front-end load when you buy units in the fund or a back-end load when you sell units.

Load Fund
Mutual Fund that is sold for a sales charge by a brokerage firm or other sales representative. Such funds may be stock, bond or commodity funds, with conservative or aggressive objectives.

Long Position
Occurs when an individual owns securities. For example an owner of 1000 shares of stock is said to be Long the Stock.



Major trend
The general price of an investment, ignoring temporary ups and downs.

Management expense ratio (MER)
The management expense ratio is the management fee plus the operating expenses of a mutual fund, expressed as a percentage of the average net asset value of the fund during the year.

The amount of money you are contributing when you borrow some of the money ( against collateral ) to buy an investment.

Margin Account
A leverageable account in which stocks can be purchased for a combination of cash and a loan. The loan in the margin account is collateralized by the stock and, if the value of the stock drops sufficiently, the owner will be asked either to put in more cash, or sell a portion of the stock. Margin rules are federally regulated, but margin requirements and interest may vary among broker/dealers.

Market Close Date
Date on which the closing Net Asset Value (NAV) was last calculated.

Market Makers
The member firms that use their own capital, research, retail and/or systems resources to represent a stock and compete with each other to buy and sell the stocks they represent. There are over 500 member firms that act as NASDAQ Market Makers. One of the major differences between The NASDAQ Stock Market and other major markets in the U.S. is NASDAQ’s structure of competing Market Makers. Each Market Maker competes for customer order flow by displaying buy and sell quotations for a guaranteed number of shares. Once an order is received, the Market Maker will immediately purchase for or sell from its own inventory, or seek the other side of the trade until it is executed, often in a matter of seconds.

Market Maker Spread
The difference between the price at which a Market Maker is willing to buy a security and the price at which the firm is willing to sell it i.e., the difference between a Market Maker’s bid and ask for a given security. Since each Market Maker positions itself either to buy or sell inventory at any given time, each individual Market Maker spread is not indicative of the market as a whole. (See also Inside Market.)

Market Order
A Market Order is an order to buy or sell a stock at the market’s current best displayed price.

Market price
The most recent price at which an investment has been bought or sold, for every trade there is a buyer and a seller.

Market Value
The market price; the price at which buyers and sellers trade similar items in an open marketplace. The current market price of a security as indicated by the latest trade recorded.

Maturity Date
The date on which the principal amount of a bond is to be paid in full.

Material News
News released by a company that might reasonably be expected to affect the value of a company’s securities or influence investors’ decisions. Material news includes information regarding corporate events of an unusual and non-recurring nature, news of tender offers, unusually good or bad earnings reports, and a stock split or stock dividend. (See also Trading Halt.)

Combining two or more companies by offering the stockholders of one company securities in another company in exchange for the surrender of their stock. This falls under the purview of SEC Rule 145.

Money Market Fund
Open-ended mutual fund that invests in commercial paper, banker’s acceptances, repurchase agreements, government securities, certificates of deposit and other highly liquid and safe securities, and pays money market rates of interest. The fund’s net asset value remains a constant $1 a share; only the interest rate goes up or down.

Money market
The money market links investors who want to earn competitive rates on their money, with governments and companies that need short-term loans. Money market investments include short-term bonds and debentures, and treasury bills.

Mortgage-backed securities (MBS)
An investment that gives you a share of a pool of home mortgages. Mortgage-backed securities pay monthly income, which is a combination of interest and a portion of the principal of the underlying mortgages.

Most Active
Most active stocks.

Mutual Fund Representative

Mutual Fund
Fund operated by an investment company that raises money from shareholders and invests it in stocks, bonds, options, commodities or money market securities.



NASDAQ Composite Index – COMP
measures all NASDAQ domestic and non-domestic based common stocks listed on The NASDAQ Stock Market. The Index is market-value weighted. This means that each company’s security affects the Index in proportion to it’s market value. The market value, the last sale price multiplied by total shares outstanding, is calculated throughout the trading day, and is related to the total value of the Index. Today the NASDAQ Composite includes over 5,000 companies, more than most other stock market indexes. Because it is so broad-based, the Composite is one of the most widely followed and quoted major market indexes.

NASDAQ National Market Securities
consists of over 3,000 companies that have a national or international shareholder base, have applied for listing, meet stringent financial requirements and agree to specific corporate governance standards. To list initially, companies are required to have significant net tangible assets or operating income, a minimum public float of 500,000 shares, at least 400 shareholders, and a bid price of at least $5. The NASDAQ National Market operates from 9:30 A.M. to 4:00 P.M. EST, with extended trading in SelectNet from 8:00 A.M. to 9:30 A.M. EST and from 4:00 P.M. and 5:15 P.M. EST.

NASDAQ SmallCap Market Securities
comprises over 1,400 companies that want the sponsorship of Market Makers, have applied for listing and meet specific and financial requirements. Once a company is approved and listed on this market, Market Makers are able to quote and trade the company’s securities through a sophisticated electronic trading and surveillance system. The NASDAQ SmallCap Market operates from 9:30 A.M. to 4:00 P.M. EST., with extended trading in SelectNet from 8:00 A.M. to 9:30 A.M. EST and from between 4:00 P.M. and 5:15 P.M. EST.

Nasdaq-100 Index
includes 100 of the largest non-financial domestic companies listed on the NASDAQ National Market tier of The NASDAQ Stock Market. Launched in January 1985, each security in the Index is proportionately represented by its market capitalization in relation to the total market value of the Index. The Index reflects NASDAQ’s largest growth companies across major industry groups. All index components have a minimum market capitalization of $500 million, and an average daily trading volume of at least 100,000 shares. The number of securities in the Nasdaq-100 index makes it an effective vehicle for arbitrageurs and securities traders. In October 1993, the Nasdaq-100 Index began trading on the Chicago Board Options Exchange. On April 10, 1996, the Chicago Mercantile Exchange began trading futures and futures options on the Nasdaq-100 Index. As of the end of 1996, the Nasdaq-100 Index has outperformed other major indexes. The Nasdaq-100 Index was up 43%, while the Dow Jones Index rose 26% and the Standard and Poors 500 Index climbed 20%. Individual stocks within the Nasdaq-100 Index varied with 69 stocks finishing the year with higher prices. Dell Computer was the best performing stock within the index with a 206.9% price increase from $17.31 per share to $53.12 per share.

National Association of Securities Dealers, Inc. (NASD)
The self-regulatory organization of the securities industry responsible for the regulation of The NASDAQ Stock Market and the over the counter markets. The NASD operates under the authority granted it by the 1938 Maloney Act Amendment to the Securities Exchange Act of 1934.

Net Asset Value (NAV)
The market value of a fund share, synonymous with a bid price. In the case of no-load funds, the NAV, market price, and offering price are all the same figure, which the public pays to buy shares; load fund market or offer prices are quoted after adding the sales charge to the net asset value. NAV is calculated by most funds after the close of the exchanges each day by taking the closing market value of all securities owned plus all other assets such as cash, subtracting all liabilities, then dividing the result (total net assets) by the total number of shares outstanding. The number of shares outstanding can vary each day depending on the number of purchases and redemption’s.

Net Change
The difference between today’s last trade and the previous day’s last trade. The difference between today’s closing Net Asset Value (NAV) and the previous day’s closing Net Asset Value (NAV).

New York Stock Exchange

NYSE Composite Index – (NYSE)
is a market value-weighted index which relates all NYSE stocks to an aggregate market value as of Dec. 31, 1965, adjusted for capitalization changes. The base value of the index is $50 and point changes are expressed in dollars and cents.

No-Load Fund
Term used to describe a mutual fund that is sold without a sales condition.



Odd lot
A number of shares which is less than a board lot.

Open Order
An order to buy or sell a security that remains in effect until either it is canceled by the customer or executed.



Par value
The face value of a bond or share as set by the company or government that issued it.

Paper profit
When the investments you hold are worth more than you paid for them. If you sell your investments for more than you paid for them, then you have a realized profit.

Penny stocks
Low-priced, generally risky shares selling at less than $1 per share.

Your collection of investments.

Portfolio Manager
A person responsible for the profitable direction of certain aggregated investments

Preferred shares
A class of share that entitles you to receive a fixed dividend before the common shareholders receive a dividend, and to receive a set amount per share if the company fails. Preferred shareholders are usually not allowed to vote at the company’s annual general meeting.

Premium – shares and bonds
The amount by which a preferred share, bond or debenture sells above its face value. In the case of a new issue of bonds or stocks, the amount the market price rises over the original selling price.

Premium – insurance
Payments you make for an insurance policy.

Price-earnings ratio
A common share. s current market price, divided by the company’s annual earnings per share.

Prime rate
The interest rate banks charge to their most credit-worthy customers.

When the firm buys from or sells to a client from the firms’s own account, they are acting as principal. Principal also refers the initial amount you invested, and the face value of a bond.

Private Equity
Investment capital provided by individuals or closely-held companies

Selling an investment to take a profit. The process of converting paper profits into cash.

Program Trading
Trades based on signals from computer programs, usually entered directly from the trader’s computer to the market’s computer system and executed automatically.

A detailed description of investments being offered for sale.

Written authorization you give for someone else to vote in your place at a shareholders. meeting.



A quick rise in the general price level of the market or in the price of an individual stock.

When your investments temporarily decrease in value after increasing for a long period of time.

Redemption price
The price you are paid if an investment you own is called in (redeemed) by the issuer early. Issuers generally must pay you a premium if they call an investment in early.

Registered tax deferral savings plans
Any savings plan where you do not pay tax on the money you put in, up to specified limits, or on any money you make from the investments. You only pay tax when you withdraw the money. Usually trusteed accounts. Examples include Registered Pension Plans, Registered Retirement Savings Plans (RRSP), Registered Retirement Income Funds (RRIF) and Registered Education Savings Plans (RESP).

Retained Earnings
Net profits kept to accumulate in a business after dividends are paid.

Return of Capital
A distribution of cash resulting from depreciation tax savings, the sale of a capital asset or of securities in a portfolio, or any other transaction unrelated to retained earnings. Usually distributed by Real Estate Investment Trusts.

Rights Offering
Issuance of “rights” to current shareholders allowing them to purchase additional shares, usually at a discount to market price. Shareholders who do not exercise these rights are usually diluted by the offering. Rights are often transferable, allowing the holder to sell them on the open market to others who may wish to exercise them. Rights offerings are particularly common to closed-end funds, that cannot otherwise issue additional common stock.

Road Show
A marketing trip accompanying the client’s senior management to investor presentations that explain the company’s business objectives and strategy, and fielding questions from potential investors related to the offering

Registered Representative



An investment where you either own part of a company (shares), or are lending a company or government money (bonds and debentures).

Settlement date
The date by which you must pay for an investment, or your certificate must be delivered to us. For most investment, this is the third business day after the date of the transaction.

Seven-Day Yield
Yield for seven-day period including the day reported.

Short sale
The practice of selling a security before you own it, in the hope that the price will have decreased by the time you buy it back. The firm will attempt to borrow the security for you, so you can sell it. For example: assuming the form can borrow the shares, you sell a share short at $ 50.00, and if the market price declines, buy it later at $ 40.00. You’ve made a profit of $ 10.00 on the transaction. It is illegal for a seller not to declare a short sale at the time of placing an order.

Share Repurchase
Program by which a corporation buys back its own shares in the open market. It usually is done when shares are undervalued. Since it reduces the number of shares outstanding and thus increases earnings per share, it tends to elevate the market value of the remaining shares held by stockholders.

Short Interest
The total number of shares of a security that have been sold short (see “Short Selling”) by customers and securities firms.

Short Selling
Short selling is the selling of a security that the seller does not own, or any sale that is completed by the delivery of a security borrowed by the seller. Short selling is a legitimate trading strategy. Short sellers assume the risk that they will be able to buy the stock at a more favorable price than the price at which they sold short. The NASDAQ Short Sale Rule prohibits NASD members from selling a NASDAQ National Market stock at or below the inside best bid when that price is lower than the previous inside best bid in that stock.

Short-Term Gain
The gain realized from the sale of securities or other capital assets held 18 months or less.

See Investor.

The division of a company. s outstanding common shares into a larger number of common shares. For example, in a two-for-one split, a shareholder with 100 shares valued at $50 each would exchange them for 200 shares at $25 each. Since this is done with all shares, each shareholder’s equity in the company remains the same.

The spread for a company’s stock is influenced by a number of factors, including:

  • Supply or “float” – the total number of shares outstanding available to trade.
  • Demand or interest in a stock.
  • Total trading activity in the stock.

Standard and Poor’s 500 -()
more formally known as the S&P 500 Composite Stock Price Index, is a European-style, capitalization-weighted index (shares outstanding multiplied by stock price) of 500 stocks that are traded on the New York Stock Exchange, American Stock Exchange and NASDAQ National Market®. The advantage of “cap-weighting” is that each company’s influence on index performance is directly proportional to its relative market value. It is this characteristic that makes the S&P 500 such a valuable tool for measuring the performance of actual portfolios.

Stock Dividend
Payment of a corporate dividend in the form of stock rather than cash. The stock dividend may be additional shares in the company, or it may be shares in a subsidiary being spun off to shareholders. Stock dividends are often used to conserve cash needed to operate the business. Unlike a cash dividend, stock dividends are not taxed until sold.

Stock Symbol
A unique one- to five-letter symbol assigned to a security. If a fifth letter appears, it identifies the issue as other than a single issue of common stock or capital stock. A list of fifth letter identifiers and a description of what each represents follows:

A - Class A
B - Class B
C - Issue qualifications exceptions *
D - New
E - Delinquent in required filings with the SEC
F - Foreign
G - First convertible bond
H - Second convertible bond,same company
I - Third convertible bond, same company
J - Voting
K - Nonvoting
L - Miscellaneous situations, such as depository receipts, stubs, additional warrants, and units
M - Fourth preferred, same company
N - Third preferred, same company
O - Second preferred, same company
P - First preferred, same company
Q - Bankruptcy Proceedings
R - Rights
S - Shares of beneficial interest
T - With warrants or with rights
U - Units
V - When issued and when distributed
W - Warrants
Y - ADR (American Depository Receipt)
Z - Miscellaneous situations such as depository receipts, stubs, additional warrants, and units.

* The letter “C” as a fifth character in a security symbol, indicates that the issuer has been granted a continuance in NASDAQ under and exception to the qualification standards for a limited period.

Stop (Loss) Order
An order to sell a stock when the price falls to a specified level.

Strip bonds
Bonds where the interest coupons have been detached from the principal. The principal and coupons trade separately, at a substantial discount. They are usually high quality federal or provincial government bonds.



A verbal (or electronic) transaction involving one party buying a security from another party. Once a trade is consummated, it is considered “done” or final. Settlement occurs one to three business days later.

Trade Date
The date on which a trade occurs. Trades generally settle (are paid for) one to three business days after a trade date. With stocks, settlement is generally three business days after the trade.

Treasury Bond 30 Year – (TYX)
is based on 10 times the yield-to-maturity on the most recently auctioned 30-year Treasury bond.

Today’s High
The inter-day high trading price.

Today’s Low
The inter-day low trading price.

People who buy and sell securities for brokers, dealers, and for their own accounts

Trading Halt
The temporary suspension of trading in a NASDAQ security, usually for 30 minutes, while material news from the issuer is being disseminated over the news wires. A trading halt gives all investors equal opportunity to evaluate news and make buy, sell or hold decisions on that basis. A trading halt may also be imposed for purely regulatory reasons, either by The NASDAQ Stock Market or the SEC.

Triple Witching
the four times during the year when stock options, stock index options, and stock index futures simultaneously expire.



Valuation day
The day on which the net asset value per unit of a mutual fund is calculated.

Total volume in each stock reported to The NASDAQ Stock Market from NASD members and exchanges trading NASDAQ securities between the hours of 8:00 A.M. and 5:15 P.M. EST.



A security entitling the holder to buy a proportionate amount of stock at some specified future date at a specified price, usually one higher than current market. This “warrant” is then traded as a security, the price of which reflects the value of the underlying stock. Warrants are usually issued as a “sweetener” bundled with another class of security to enhance the marketability of the latter.



In general, a return on an investor’s capital investment. For bonds, the coupon rate of interest divided by the purchase price, called current yield. Also, the rate of return on a bond, taking into account the total of annual interest payments, the purchase price, the redemption value and the amount of time remaining until maturity.