1、.：.；Burnham Securities, Inc. Fuhrman DivisionGlossary of Investment TermsA 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 AMERICAN DEPOSITORY RECEIPTS (ADR) Certificates issued by a U.S. Depository Bank, representing foreign shares held by the bank, usually by a branch or correspondent in the cou

2、ntry of issue. One ADR may represent a portion of a foreign share, one share or a bundle of shares of a foreign corporation. If the ADRs are sponsored, the corporation provides financial information and other assistance to the bank and may subsidize the administration of the ADRs. Unsponsored ADRs d

3、o not receive such assistance. ADRs carry the same currency, political and economic risks as the underlying foreign share; the prices of the two, adjusted for the SDR/ordinary ratio, are kept essentially identical by arbitrage. American Depository Shares (ADS) are a similar form of certification.ANA

4、LYST Employee of a brokerage or fund management house who studies companies and makes buy and sell recommendations on their stocks. Most specialize in a specific industry.ANNUAL REPORT Yearly record of a publicly held companys financial condition. It includes a description of the firms operations, i

5、ts balance sheet and income statement. SEC rules require that it be distributed to all shareholders. A more detailed version is called a 10-K.ARBITRAGE Profiting from differences in the price of a single security that is traded on more than one market.ARMS INDEX Also known as TRading INdex (TRIN): =

6、 (number of advancing issues / number of declining issues) divided by (total up volume / total down volume). An advance/decline market indicator. Less than 1.0 indicates bullish demand, while above 1.0 is bearish.ASSIGNMENT The receipt of an exercise notice by an options writer that requires him to

7、sell (in the case of a call) or purchase (in the case of a put) the underlying security at the specified strike price.AT-THE-MONEY An option is at-the-money if the strike price of the option is equal to the market price of the underlying security. For example, if xyz stock is trading at 45, then the

8、 xyz 45 option is at-the-money.AVERAGE An arithmetic mean of selected stocks intended to represent the behavior of the market or some component of it. One good example is the widely quoted Dow Jones Industrial Average, which adds the current prices of the 30 DJIAs stocks, and divides the results by

9、a predetermined number, the divisor.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.BACK OFFICE Brokerage house clerical operations that support, but do not include, the trading of stoc

10、ks and other securities. Includes all written confirmation and settlement of trades, record keeping and regulatory compliance.BANKERS ACCEPTANCE A short-term credit investment created by a non-financial firm and guaranteed by a bank as to payment. Acceptances are traded at discounts from face value

11、in the secondary market. These instruments have been a popular investment for money market funds. BASIS The price an investor pays for a security plus any out-of-pocket expenses. It is used to determine capital gains or losses for tax purposes when the stock is sold.BASIS POINTS Refers to yield on b

12、onds. Each percentage point of yield in bonds equals 100 basis points. If a bond yield changes from 6.25 % to 6.39 %, thats a rise of 14 basis points.BEAR An investor who believes a stock or the overall market will decline. A bear market is a prolonged period of falling stock prices, usually by 20%

13、or more.BEAR RAID A situation in which large traders sell positions with the intention of driving prices down.BETA (STOCKS) Measure of a stocks 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

14、down 30 % more than the market.BETA EQUATION (STOCKS) The beta of a stock is determined as follows: (n) (sum of (xy) -(sum of x) (sum of y) (n) (sum of (xx) -(sum of x) (sum of x) where: n = # of observations (24-60 months) x = rate of return for the S&P 500 Index y = rate of return for the stock.BE

15、TA (MUTUAL FUNDS) he measure of a funds risk in relation to the market. 0.7 means the funds total return is likely to move up or down 70 % of the market change; 1.3 means total return is likely to move up or down 30 % more than the market.BETA EQUATION (MUTUAL FUNDS) The beta of a fund is determined

16、 as follows: (n) (sum of (xy) - (sum of x) (sum of y) (n) (sum of (xx) - (sum of x) (sum of x) where: n = # of observations (36 months) x = rate of return for the S&P 500 Index y = rate of return for the fund.BLOW-OFF TOP A steep and rapid increase in price followed by a steep and rapid drop in pric

17、e. This is an indicator seen in charts and used in technical analysis of stock price and market trends.BREAKOUT A rise in a securitys 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

18、a continuing move in the same direction. Can be used by technical analysts as a buy or sell indication.BULL An investor who thinks the market will rise.BULL MARKET A market which is on a consistent upward trend.BUYOUT Purchase of a controlling interest (or percent of shares) of a companys stock. A l

19、everaged buyout is done with borrowed money.CALL OPTION An option contract that gives the holder of the option the right (but not the obligation) to purchase, and obligates the writer to sell, a specified number of shares of the underlying stock at the given strike price, on or before the expiration

20、 date of the contract.CAPITAL EXPENDITURES Amount used during a particular period to acquire or improve long term assets such as property, plant, or equipment.CAPITAL GAIN When a stock is sold for a profit, its the difference between the net sales price of securities and their net cost, or original

21、basis. If a stock is sold below cost, the difference is a capital loss.CAPITAL LOSS The difference between the net cost of a security and the net sale price, if that security is sold at a loss.CASH DIVIDEND A dividend paid in cash to a companys shareholders. The amount is normally based on profitabi

22、lity and is taxable as income. A cash distribution may include capital gains and return of capital in addition to the dividend.CASH AND EQUIVALENTS The value of assets that can be converted into cash immediately, as reported by a company. Usually includes bank accounts and marketable securities, suc

23、h as government bonds and Bankers Acceptances. Cash equivalents on balance sheets include securities (e.g., notes) that mature within ninety days.CASH FLOW In investments, it represents earnings before depreciation amortization and non-cash charges. Sometimes called cash earnings. Cash Flow from ope

24、rations (called Funds From Operations (FFO) by real estate and other investment trusts, is important because it indicates the ability to pay dividends.CHANGES IN FINANCIAL POSITION Sources of funds internally provided from operations which alter a companys cash flow position: depreciation, deferred

25、taxes, other sources, and capital expenditures.CHURNING Excessive trading of a clients account in order to increase the brokers commissions.CLOSED END FUND An investment trust that does not continually offer to buy and sell shares at net asset value, as does an open end mutual fund. The shares trade

26、 on an exchange at a price determined by market forces and may sell at a premium or discount to Net Asset Value.CLOSING PURCHASE A transaction in which the purchasers intention is to reduce or eliminate a short position in a stock, or in a given series of options.CLOSING SALE A transaction in which

27、the sellers intention is to reduce or eliminate his long position in a stock, or a given series of options.COMMISSION The fee paid to a broker to execute a trade, based on number of shares, bonds, options and/or their dollar value. In 1975, deregulation led to the creation of discount brokers, who c

28、harge lower commissions than full service brokers. Full service brokers offer advice and usually have a full staff of analysts who follow specific industries. Discount brokers simply execute a clients order-and usually do not offer an opinion on a stock.COMMON STOCK/OTHER EQUITY Value of outstanding

29、 common shares at par, less accumulated retained earnings. Also called shareholders equity.CONFIDENCE INDICATOR A measure of investors faith in the economy and the securities market. A low or deteriorating level of confidence is considered by many technical analysts as a bearish sign.CONFIDENCE LEVE

30、L The degree of assurance that a specified failure rate is not exceeded.CONFIRMATION The written statement that follows any trade in the securities markets. Confirmation is issued immediately after a trade is executed. It spells out settlement date, terms, commission, etc.CONVERGENCE The movement of

31、 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. But as the contract nears expiration, the futures price and the cash price converge.CORNER A MARKET To purchase enough of the available supply of

32、a commodity or stock in order to manipulate its price.COUPON RATE In bonds, notes or other fixed income securities, the stated percentage rate of interest, usually paid twice a year.COVERED CALL A short call option position in which the writer owns the number of shares of the underlying stock repres

33、ented by the option contracts. Covered calls generally limit the risk the writer takes because the stock does not have to be bought at the market price, if the holder of that option decides to exercise it.COVERED PUT A put option position in which the option writer also is short the corresponding st

34、ock or has deposited, in a cash account, cash or cash equivalents equal to the exercise of the option. This limits the option writers risk because money or stock is already set aside. In the event that the holder of the put option decides to exercise the option, the writers risk is more limited than

35、 it would be on an uncovered or naked put option.CURRENT ASSETS Value of cash, accounts receivable, inventories, marketable securities and other assets that could be converted to cash in less than 1 year.CURRENT LIABILITIES Amount owed for salaries, interest, accounts payable and other debts due wit

36、hin 1 year.CURRENT RATIO Indicator of short-term debt paying ability. Determined by dividing current assets by current liabilities. The higher the ratio, the more liquid the company.CURRENT YIELD For bonds or notes, the coupon rate divided by the market price of the bond. DAY ORDER An order to buy o

37、r sell stock that automatically expires if it cant be executed on the day it is entered.DEBT/EQUITY RATIO Indicator of financial leverage. Compares assets provided by creditors to assets provided by shareholders. Determined by dividing long term debt by common stockholders equity.DECILE RANK Perform

38、ance over time, rated on a scale of 1-10. 1 indicates that a mutual funds return was in the top 10 % of funds being compared, while 3 means the return was in the top 30 %. Objective Rank compares all funds in the same investment strategy category. All Rank compares all funds.DECLARATION DATE The dat

39、e on which a firms directors meet and announce the date and amount of the next dividend.DEFERRED TAXES A non-cash expense that provides a source of free cash flow. Amount allocated during the period to cover tax liabilities that have not yet been paid.DEPRECIATION A non-cash expense that provides a

40、source of free cash flow. Amount allocated during the period to amortize the cost of acquiring long term assets over the useful life of the assets.DERIVATIVE SECURITY A financial security, such as an option, or future, whose value is derived in part from the value and characteristics of another secu

41、rity, the underlying security.DIFFERENCE FROM S&P A mutual funds return minus the change in the Standard & Poors 500 Index for the same time period. A notation of -5.00 means the fund return was 5 percentage points less than the gain in the S&P, while 0.00 means that the fund and the S&P had the sam

42、e return.DISTRIBUTIONS Payments from fund or corporate cash flow. May include dividends from earnings, capital gains from sale of portfolio holdings and return of capital. Fund distributions can be made by check or by investing in additional shares. Funds are required to distribute capital gains (if

43、 any) to shareholders at least once per year. Some Corporations offer Dividend Reinvestment Plans (DRP).DIVIDEND REINVESTMENT PLANS (DRP) Plans offered by many corporations for the reinvestment of dividends, sometimes at a discount from market price, on the dividend payment date. Many DRPs also allo

44、w the investment of additional cash from the shareholder. The DRP is usually administered by the company without charges to the holder.DIVERGENCE When two or more averages or indices fail to show confirming trends.DIVIDEND Distribution of a portion of a companys earnings, cash flow or capital to sha

45、reholders, in cash or additional stock.DIVIDEND YIELD (STOCKS) Indicated Yield represents annual dividends divided by current stock price.DIVIDEND YIELD (FUNDS) Indicated Yield represents return on a share of a mutual fund held over the past 12 months. Assumes fund was purchased 1 year ago. Reflects

46、 effect of sales charges (at current rates), but ot redemption charges.DIVIDENDS PER SHARE Dividends paid for the past 12 months divided by the number of common shares outstanding, as reported by a company. The number of shares often is determined by a weighted average of shares outstanding over the

47、 reporting term.DIVIDEND REINVESTMENT PLAN Automatic reinvestment of shareholder dividends in more shares of a companys stock, often without commissions. Some plans provide for the purchase of additional shares at a discount to market price. Dividend reinvestment plans allow shareholders to accumula

48、te stock over the long term using dollar cost averaging.DOWNGRADE A classic negative change in ratings for a stock, and or other rated security.DOWN TICK When a stock trades at a price lower than the previous trade.EARNINGS Net income for the company during the period.EARNINGS PER SHARE (EPS) Also r

49、eferred 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.EARNINGS YIELD The ratio of Earnings Per Share after allowing

50、for tax and interest payments on fixed interest debt, to the current share price. The inverse of the Price/Earnings ratio. Its the Total Twelve Months Earnings divided by number of outstanding shares, divided by the recent price, multiplied by 100. The end result is shown in percentage.EQUITY The va

51、lue of the common stockholders equity in a company as listed on the balance sheet.EQUITY OPTIONS Securities that give the holder the right to buy or sell a specified number of shares of stock, at a specified price for a certain (limited) time period. Typically one option equals 100 shares of stock.E

52、UROPEAN-STYLE OPTION An option contract that can only be exercised on the expiration date.EXCHANGE The marketplace in which shares, options and futures on stocks, bonds, commodities and indices are traded. Principal US stock exchanges are: New York Stock Exchange (NYSE), American Stock Exchange (AME

53、X) and the National Association of Securities Dealers (NASDAQ).EX-DIVIDEND DATE The first day of trading when the seller, rather than the buyer, of a stock will be entitled to the most recently announced dividend payment. This date set by the NYSE (and generally followed on other US exchanges) is cu

54、rrently two business days before the record date. A stock that has gone ex-dividend is marked with an x in newspaper listings on that date.EXECUTION 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 an

55、d transfer of ownership) occurs in the U.S. between 1 (mutual funds) and 5 (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.EXERCISE To implement the right of the holder of an option to buy (in the case

56、 of a call) or sell (in the case of a put) the underlying security.EXPENSE RATIO The percentage of the assets that were spent to run a mutual fund (as of the last annual statement). This includes expenses such as management and advisory fees, overhead costs and 12b-1 (distribution and advertising )

57、fees. The expense ratio does not include brokerage costs for trading the portfolio, although these are reported as a percentage of assets to the SEC by the funds in a Statement of Additional Information (SAI). the SAI is available to shareholders on request. Neither the expense ratio or the SAI incl

58、udes the transaction costs of spreads, normally incurred in unlisted securities and foreign stocks. These two costs can add significantly to the reported expenses of a fund. The expense ratio is often termed an Operating Expense Ratio (OER).EXPIRATION CYCLE An expiration cycle relates to the dates o

59、n which options on a particular security expire. A given option will be placed in 1 of 3 cycles, the January cycle, the February cycle, or the March cycle. At any point in time, an option will have contracts with 4 expiration dates outstanding, 2 in near-term months and 2 in far-term months.EXPIRATI

60、ON DATE The last day (in the case of American-style) or the only day (in the case of European- style) on which an option may be exercised. For stock options, this date is the Saturday immediately following the 3d Friday of the expiration month; however, brokerage firms may set an earlier deadline fo