Before beginning my glossary, let me first define the scope of this glossary. Stock market terminology is a very vast subject that covers the bond market, stock market, trading, portfolios and even stock term slang or jargon. So, if you're wondering what exactly this article contains, let me give you an insight. My article mainly contains all the stock terms, from all the general categories of stock market finance, and also includes the phrases and jargon that you should most specifically know, if you're entering the stock markets. It includes all possible terms belonging to the categories dog obedience training books of 'investment finance', 'mutual funds', 'stock market regulatory policies', 'trading basics', stock market basics and 'stock market instruments'.
Before I start my stock terms glossary, let me tell you about the schematic progression of this article. It follows an alphabetical series, starting from the letter 'A', going all the way down to the letter 'Z'. The list also defines some alphanumeric words. I hope that finding the stock term you are looking for, will be easy to locate in this really long list of stock terms and stock market definitions.
Stock Terminology - Glossary of Stock Market Terms and Definitions
A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z |
Stock Market TerminologyStock Market DefinitionsA Share
The words 'a share' has two meanings: (a) They are the calls of common or preferential shares that have increased voting rights on company issues. (b)In USA, mutual funds terminology states 'a shares' to have an upfront sales load of 5.75% of the amount invested.
Any return above (abnormal profit) or below (abnormal loss) the expected return on a stock or a portfolio is termed as abnormal returns. Any returns above the market returns or any returns below the market returns are also abnormal returns.
The distribution of a company's net income is undertaken in accordance with the absolute priority rule, that specifies the order of disbursement as: (a)Interest to Creditors (b)Dividends to Preferred Stockholders and (c)Dividends to the Common Stockholders, in case of liquidation.
In a case of default or breach of contract, this covenant or clause matures the contract performance immediately, so that all dues are settled immediately.
When a trader enters into non-competitive trades in order to avoid certain liabilities, the action is termed as an accommodation trade. This agreement is illegal in most countries.
A normal dividend that is considered to be earned but is not really declared or immediately payable by the company.
Accumulated Earnings Tax
The federal tax that is levied on any retained earning that are in excess of the amount considered reasonable, is termed as accumulated earnings tax.
Acting in Concert
When two investors take similar actions (act together), to achieve a single common goal, they are said to be acting in concert.
Accounts Payable Turnover Ratio
This is ratio that measures the rate at which debts are discharged by a firm. It is calculated by dividing the total annual purchases with the total annual accounts payable. The higher the ratio is, the better it is for the firm.
Active Index Funds
These are funds where the managers try to track an index like S&P500. There is an attempt to beat the benchmarked index by using strategies, like adding stocks that have a superior performance in relation to the index and by using market timing, etc.
Actively Managed ETF
Actively Managed Exchange Traded Funds permit fund managers to trade outside the benchmarked index, deviate with respect to sector allocations and make other changes that are necessary to ensure increased returns.
This is the firm's effectiveness indicator, for it shows the ease and speed of the company to convert various accounts and receivables, into sales and cash.
Adjustable-Rate Preferred Stock - ARPS
Unlike a fixed rate preferred stock, an adjustable-rate preferred stock pays dividends that fluctuate with the rate of interest on the benchmarked Treasury bill.
Adjusted Debit Balance
This is the final margin account balance, that is arrived at by netting all the balances owed or outstanding payments, with the on paper profits or losses.
Adjustment in Conversion Terms
Convertible preferred stock can be exchanged for a fixed number of common shares in accordance with the conversion terms. Adjustment in conversion terms can be made so that the holder of the convertible preferred stock does not get affected by events like common stock splits.
When someone promises to sell (or buy) something that he currently doesn't own (or hasn't bought yet), he is said to be making an advance commitment.
Affidavit of Loss
This is an oath which states that either the stock certificate or any other physical record of being the holder of the security has been lost on account of theft, fire, destruction or flood.
This is an obligation on specialists to post a bid or an ask, when there is insufficient market demand or supply to match orders, on the NYSE.
After-Hours Market Close
The final price attained by the security, in the after hours market, is called the after-hours market close. Although, this is not the price at which the market opens the next day, the investor can use this to gauge the upside potential of the stock.
After-Hours Trading - AHT
Trading that is conducted by both, individuals as well as institutions, after the regular trading hours on the major exchanges is called after-hours trading.
The performance of a stock after its initial public offering (IPO), which is measured during the lock-up period (3 to 9 months from the date of the IPO), is referred to as after-market performance of the stock.
When a broker receives opposite orders for exactly the same security, in exactly the same quantity, he can act as an agent or broker for both the parties involved. This both party representation by one person, is called agency cross or dual agency.
All Or None - AON
Is a buy or sell trade order, that is placed to brokers, subject to the exact availability of supply or demand. Non availability on the particular day, renders the order as canceled.
The all-holders rule requires a company to implement uniform policies (stock buybacks, stock splits, stock dividends) for shareholders belonging to the same class of shares.
Voting shareholders and officers may be granted access to the trading floor, as allied members, despite not being members of the New York Stock Exchange (NYSE), provided they clear the designated exam.
This risk adjusted performance measure called alpha, is just the differential between the actual and expected returns of a stock or portfolio.
When a portfolio holder experiences excess returns on adding a security to the aforementioned portfolio, without having to undertake any additional risks, the particular security is known as an alpha generator.
The early rounds of funding that are required for the start up of a new company or firm, are termed as alphabet rounds.
Alternative Energy ETF
These are exchange traded funds that invest in companies engaged in the production of alternate energy, like ethanol, solar power and clean energy and research pertaining