Convertibles that trade like fixed-income investments because the market price of the common stock they convert to has fallen so low as to render the conversion feature valueless.
Any business that generates a continuing flow of cash. Such a business usually has well established brand names whose familiarity stimulates repeated buying of the products.
Sale of stocks, bonds, or other investments directly to an institutional investor.
A private placement does not have to be registered with the Securities and Exchange Commission.
Theory that even though a stock or the market as a whole is fully valued, speculation is justified because there are enough fools to push prices further up.
Stocks are divided into market caps. Large Cap stocks have over $5 billion in outstanding market value. Medium Cap $2.5 billion, Small Cap $50o m to $1 billion, Micro Cap below $500 m.
Rise in stock prices between Christmas and New Years Day. Attributed to the anticipation of January, when stock prices rise the first few days of the year as pension funds add new money to their accounts.
Bonds that were investment grade at the time they were issued but have since declined in quality to below investment grade (BB or lower).
Term coined in the mid-90’s to describe an economy that was “not too hot, not too cold,” as was the porridge in the childrens story of “Goldilocks and the Three Bears.”
Sharp rise in stock price after severe decline. The saying refers to the fact that a dead cat dropped from a high place will bounce.
Often the bounce is the result of short sellers covering their positions
at a profit.
Statistical concept holding that the greater the number of units in a projection, the less important each number becomes. Group insurance is an example of the principle in application.
Practice of making unsolicited calls to potential customers by brokers. Brokers hope to interest customers in stocks, bonds, mutual funds, and financial planning.
Any broker that provides trading services to customers over the Internet ( full-service, discount, and deep discount brokers). On-line brokers typically charge flat rates, for transactions up to 1000 shares.
The third Friday in March, June, September, and December when options, index options, and futures contracts all expire simultaneously.
Limited Partnership income that arises from debt restructuring and creates taxability without generating cash flow. Phantom income typically occurs in a tax shelter created prior to the tax reform act of 1986.
The Federal Open Market Committee (FOMC) has historically been a very tight-lipped bunch.
Lately, FOMC members can't seem to say no to a microphone.
Option for which the buyer or seller has no underlying security position. Naked options are very risky-athough potentially rewarding. If the underlying stock or stock index moves in the direction sought by the investor, profits can be enormous, because the investor would only have to put down a small amount of money to reap a large return.
Measure undertaken to discourage unwanted takeover attempts. Strategies include shark repellant, golden parachute, poison pill, and scorched-earth policy.
A prospectus or red herring is used for selling IPOs and secondary offerings for companies attempting to raise public money.
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Term used to describe a market the direction of which has become obvious, and therefore requires little or no analysis.
Most stocks go up in a bull market and fall in a bear market. Buying and selling is a no-brainer!
A symbolic American gadget, used wherever a hypothetical product is needed to illustrate a manufacturing or selling concept.
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