Stock Market Help
Here is a list of common financial terms. Click on the letter that corresponds with the first letter of the financial term to get the definition.
Baby Bond
One sold at face amount less than $1,000 to make it attractive to smaller investors.
Balance Sheet
A listing of all assets and liabilities for an individual or a business. The surplus of assets over liabilities is the net worth, or what is owned free of debt.
Balance Sheet - Cash & Debt
A view in the stock database that displays: Fiscal Year End, QuickRatio, Debt/Equity Ratio, Current Ratio, and Cash/Share. These items measure the financial health of a company, particularly its assets and liabilities. Click each item in the Glossary list for definitions of each of these items.
Balance Sheet Return
A view in the stock database that displays Sales/Price Ratio, Price/Book Ratio, Book/Share, Return on Equity, Profit Margin, and Reporting Date. These items are all measures of company value and profitability.
Balanced Equities
A mutual fund whose holdings are split fairly evenly between stocks and bonds. Balanced funds can change their asset allocation according to market conditions. Balanced funds seek a relatively steady return.
Bank Information
Descriptive information about a given bank. A view in the CDs and Money Markets database that displays: Minimum Deposit, City, State, Phone, Out-of-state Indicator.
Basis
An accounting term that refers to the cost of an asset including all adjustments and improvements. For tax purposes, it is the amount you subtract from the net sale price to determine the realized gain or loss. For example, if you paid $150,000 for your home, but added a porch for $25,000, your basis is now $175,000. You have stepped-up the basis.
Basis Point
The smallest measure used in quoting yields and interest rates. One basis point equals .01%, so a 100 basis point move in a U.S. Treasury bond yield is 1%.
Bearer Certificate
A security whose owner is not registered on the books of the issuer and which is, therefore, payable to the person possessing the certificate. A bearer bond has coupons attached, which the bondholder sends in or presents on the interest date for payment. Bearer stock certificates are negotiable without endorsement.
Beta
A measure of risk commonly used to compare the volatility of mutual funds or stocks to the overall market . The S&P 500 Index is the base for calculating beta and carries a value of 1. Securities with betas below 1 are less risky than the market as a whole. Betas above 1 are more risky. A beta of 1.3 is 30% more volatile than the S&P 500. Betas with negative values are inversely related to the S&P 500. Note: The beta of precious metals can be low but these funds have high price volatility. You cannot compare the beta of bond funds against the beta of equity funds, because the bond fund beta is calculated using the Shearson Long Bond Index rather than the S&P 500 Index.
Bid
The highest price a buyer is willing to pay for a security at this time.
Block Trade
Usually, a trade of 10,000 shares or more. For bonds, a $200,000 face amount or more. Block trades are often executed through a special section of a brokerage firm called the Block Desk. Using the Block Desk may result in a better price.
Bond Prices
View in the bond database that displays: Maturity, Outstanding Bond Amount, Latest Price, Current Year High and Low Prices. For latest price, see Price (Trade) Bonds.
Bond Type
The bond pays fixed interest amounts over its term. The bond price, however, can change as prevailing market interest rates change over time. Zero coupon bonds, or zeroes, do not pay interest. They are sold at deep discount to their par value, which is returned at maturity. Interest is internally compounded to produce the stated yield to maturity. With floating rate, the interest rate paid on the bond can change as prevailing market interest rates change.
Book/Share
The current fiscal year book value (or net equity for the corporation) per share of common stock.
Broker/Dealer
In the broadest sense, an agent who facilitates trades between a buyer and a seller and receives a commission for his services. Dealers buy and sell for their own account and keep their own inventory of securities on which they can profit or incur losses. Most stock brokerage firms really act as brokers and dealers. Brokers are also classed as Full Service or Discount, the former using a commission-based sales force and the latter using salaried brokers only.
Business
Describes the primary product or service offered by a given corporation.
Buy(s)
A transaction type for the purchase of a security. A buy creates an open lot which is part of a holding of a given security that you currently own. Buy(s) is also a filter for displaying only buy transactions.
Buy-to-Cover
A transaction type that is a closing transaction for a short sell and which creates a closed lot. Buys-to-Cover is also a filter for displaying only buy-to-cover transactions.
Buying Power
Value of margin eligible securities that may be purchased in a margin account. Determined by doubling the sum of the cash held in the brokerage account and the loan value of margined securities.