Bull
Investor who believes an individual security, an industry segment, or the overall market will rise.

See: Bear; Bear Market; Bull Market

Bull Market
An advancing trend in stock prices that usually occurs for a time period of months or years. Bull markets are generally characterized by high trading volume.

See: Bull; Economic Growth Rate; Volume

Bull Spread
An option strategy wherein the investor profits when the underlying security's price rises. (vs. Bear Spread). There are three types of bull spreads:

* Vertical Spread: Concurrently buying and writing (selling) the same options class and the same expiration date, but with different exercise prices.

* Calendar Spread: Simultaneously buying and writing the same options class and sale of options of the same price but at different expiration dates.

* Diagonal Spread: Simultaneously buying and writing the same options class at different exercise prices and different expiration dates. A diagonal spread combines a vertical and a calendar spread.

See: Bear Spread; Calendar Spread; Class Of Option; Diagonal Spread; Exercise Price; Expiration Date; Options; Option Spread; Spread Position; Strike Price; Underlying Security; Vertical Spread; Writer

Bunching
1: A ticker tape pattern that occurs when a series of trades in the same security are displayed consecutively.

See: Ticker Tape

2: Round lot orders that are combined together to be executed at the same time. Bunching is also used with odd lot orders to save each client the odd lot differential that is sometimes charged for small orders.

See: Odd Lot; Odd Lot Differential; Round Lot

Business Conduct Committee
A committee, organized under the FINRA in each of its 13 districts, that acts as a hearing tribunal for trade practice complaints made under the Code of Procedure--also called the "District Business Conduct Committee." The committee ascertains the facts and, when warranted, imposes discipline. Decisions may be appealed to the FINRA's Board of Governors.

See: District Business Conduct Committee; FINRA

Business Day
The securities industry considers a business day to be any day that the financial markets are open for trading. In determining settlement dates for regular way securities transactions--trade date plus 3 business days--weekends and legal holidays are not counted.

See: Financial Market; Settlement Date

Busted Convertible
A convertible security whose conversion feature is considered worthless because the price of the common stock to which they convert has dropped so low. Thus, the convertible trades like a fixed-income investment.

See: Convertible Securities; Fixed Income Investment

Bust-Up Takeover
Leveraged buyout whereby the target company's business activities or assets are sold by the buyer to repay the debt that financed the takeover.

See: Debt; Leveraged Buyout; Takeover; Target Company

Butterfly Spread
Complex option strategy that involves writing (selling) two calls and buying two calls on the same or different markets and several expiration dates. One of the call options has a higher strike price and the other has a lower strike price than the other two call options. If the underlying stock price remains stable, the investor profits from the premium income collected on the options that are written.

See: Call Option; Expiration Date; Option Premium; Options; Option Spread; Put Option; Spread Position; Strike Price

Buy And Hold Strategy
Strategy whereby an investor acquires shares of a corporation over many years.

See: Buy And Write Strategy

Buy And Write Strategy
An options strategy whereby investors write (sell to open) covered call options on securities that they already own. To be considered covered, the number of option contracts may not exceed the equivalent number of shares held (1 contract normally equals 100 shares). If an investor owns 1000 shares of XYZ, for example, he may write up to 10 option call contracts on XYZ for it to be considered covered.

The writer may receive both stock dividends from the underlying security and premium income from the call options. The inherent risk of this strategy is that the writer may have to sell their stock below the current market price if the call is exercised by the option buyer. For example, a writer sells a covered XYZ Nov 50 call and a buyer purchases XYZ Nov 50 calls. If the current market price is 53 when the buyer exercises the call options, the writer's stock is called away (sold) at 50--not 53.

See: Call Option; Call Premium; Covered Call Option; Options; Option Writer

Buyback
Lingo that refers to the covering of a short sale by purchasing the same security.

See: Selling Short; Short Covering; Stock Buyback

Buy In
A procedure that occurs when a seller fails to deliver securities sold. The broker must purchase the security on the open market on behalf of the seller to complete the transaction.

See: Fail To Deliver

Buying Climax
A security's quick rise in price that draws many buyers, leaving them with no one to sell to at higher prices resulting in a subsequent fall in the security's price. Technical chartists ascertain a buying climax when they see a sharp price rise along with increased trading volume in the security.

See: Chartists; Selling Climax; Technical Analysis; Volume

Buying On Margin
Buying securities on credit in an established margin account at a brokerage firm.

See: Buying Power; Margin; Margin Account

Buying Power
The dollar amount available to purchase securities on margin. The amount is calculated by adding the cash held in the brokerage accounts and the amount that could be spent if securities were fully margined to their limit. If an investor uses their buying power, they are purchasing securities on credit.

See: Buying On Margin; Margin; Margin Account

Buy Minus
An order to purchase a security at a lower price than its current market price. Traders will try to execute this type of order when the security's price temporarily drops.

See: Away From The Market; Execution; Orders

Buy On The Bad News
Investment strategy established from the belief that a security's price will plunge shortly after the corporation reports bad news. Investors who buy at this time deem that the security's price will rise when the news improves.

See: Bottom Fisher; Selling On The Good News

Buy Order
An order placed with a brokerage firm to purchase a specified quantity of a security at stipulated parameters, for example, price (limit or market) and duration.

See: Buy Stop Order; Limit Price; Orders

Buyout
A party that purchases a controlling percentage of a corporation's stock, through negotiation or a tender offer, to take over the corporation's assets and operations.

See: Leveraged Buyout; Tender Offer

Buy Stop Order
Buy order for a listed security that stipulates that it be held until the security's market price rises to the stop price. Once the stop price is reached, the order is considered to be a market order to buy at the best available price.

See: Buy Order; Market Order; Orders; Over The Counter; Stop Order

Buy The Book
An order placed with a brokerage firm to buy all available shares from the security's specialist and from other broker-dealers at the security's current offering price. Before the advent of computers, specialists used to keep track of buy and sell orders in a book. Thus, the name "buy the book." This type of order is most likely to be placed by institutional buyers and professional traders.

See: Institutional Investor; Specialist

Bylaws
Written rules established at the time a company is incorporating or a not-for-profit organization is forming. The rules govern the internal management of the company or organization and detail such items as the election of directors and the duties of officers. In contrast, a corporate charter is concerned with broad issues such as the number of authorized shares.

See: Authorized Shares; Corporate Charter; Incorporation

Bypass Trust
A written agreement established by parents that allows them to pass their assets to their children in the event of their death.