See: Delivery Date; Seller's Option Contract; Settlement Date

Delayed Opening
The postponement of the start of trading in a stock beyond the normal opening of a day's trading because exchange officials judge that market conditions justify such a delay. Such market conditions may be caused by a great influx (or an extreme imbalance) in buy and sell orders, or pending corporate news that requires time for dissemination.

See: Suspended Trading; Trading Halt

Delisted Security
Elimination of a corporation's security from an exchange because the security no longer meets specific financial ratios, sales levels, or other qualifications.

See: Listing Requirements

Delivery
The physical exchange of money and securities on the brokerage transaction's settlement date. Industry standards stipulate what is an acceptable condition for the securities being delivered--otherwise known as being in "good deliverable form."

See: Delivery Date; Good Delivery Of Securities

Delivery Date
Currently, it is the fifth business day following a "regular way" transaction on the New York Stock Exchange in which money and securities need to be exchanged. However, on June 1, 1995, new industry regulations will be in effect. The regulation change stipulates that the delivery date for regular way transactions--for most securities--will occur on the third business day following the transaction.

Moreover, in regard to other types of securities, the term regular way delivery does not necessarily mean three business days following the transaction. Government securities, for instance, have a regular way delivery on the next business day following the transaction.

See: Delayed Delivery; Regular Way Delivery (Settlement); Seller's Option Contract

Delivery Notice
Notification from the seller to the buyer of the date when the actual commodity in a futures contract will be delivered.

See: Commodities

Delivery Versus Payment (DVP)
Securities industry procedure whereby the sold securities are delivered to the buyer's bank in exchange for payment. From the seller's perspective, it is called "receive versus payment." Institutional customers customarily use delivery versus payment to make settlement on transactions. It is also referred to as COD (cash on delivery) transactions.

Delta
A statistical measure of the relationship between an option contract's price movement to the price movement of the underlying futures contract or stock price. To illustrate, if the option's underlying stock increased by 2 points and the call option increased by 1 point, the call option would have a delta of .5. As an in-the-money option near expiration, it advances to a delta of 1.

See: In The Money

Demand Deposit
A type of bank account whereby the account balance can be withdrawn by the depositor without prior notice to the bank (e.g. checking accounts). The balance can be withdrawn via check, automatic teller machine or by transfers to other accounts using a PC or telephone. The Federal Reserve uses demand deposits as a primary indicator as to when to implement monetary policy because they are the largest component of the money supply.

Demand-Pull Inflation
Price increases as a result of supply not meeting demand.

DeMinimus Exception
A provision within Regulation T of the Federal Reserve that allows margin deficiencies of $1000 or less. Brokers may not have to liquidate securities to correct the situation. However, a broker does have to obtain the funds within a reasonable period. This rule is in effect for cases in which the client may be unavailable because of vacations or some other extraordinary event.

See: Liquidation; Margin Call; Regulation T; Sell Out Procedures

Denomination
Face value of securities, currency and coins.

See: Face Value; Par

Depletion Accounting
An accounting practice that allows for charges against earnings based on the amount of assets taken out of reserves to reductions in taxable income. This practice is only available to companies that extract natural resources such as oil and gas.

Deposit
1: Securities put into a customer's account at a financial institution (e.g., brokerage firm).

2: Cash, checks, or drafts credited to a customer's account at a financial institution (e.g., bank checking and saving accounts).

3: Money put down as an indication of good faith in contracts and vendors, such as utility and telephone companies, to protect the other party against nonpayment, property damage and contract defaults.

Depository Trust Company (DTC)
A central securities certificate repository that is a member of the Federal Reserve System and is industry-owned. The New York Stock Exchange is the majority owner. DTC members deliver securities to each other via computerized debit and credit entries. This reduces the need to actually move paper certificates.

See: Federal Reserve System

Depreciation
A bookkeeping entry that does not require cash outlay nor funds to be earmarked. The entry is a charge against earnings to write off the cost of an asset over its assessed useful life over a set time period. It reduces taxable income but does not reduce cash. The most commonly used depreciation methods are Straight-line Depreciation and Accelerated Cost Recovery System (ACRS).

Depression
Economic situation characterized by rising unemployment, an excess of supply over demand, deflation, reduced purchasing power, contraction of general business activity and public fear.

See: Deflation

Derivative Instrument
Financial instrument whose price is based on an underlying security--for example, an option's value can be derived either from its underlying stock, stock index, or future (dependent upon the type of option).

See: Options; Underlying Security

Descending Tops
Chart pattern where each new high price for a security is lower than the former high price. In other words, from the stock's high price, it falls and then rises. However, the price never reaches the stock's previous high price. If this pattern continues, technical analysts consider this type of trend to be bearish.

See: Technical Analysts

Designated Examining Authority (DEA)
A self-regulatory body that has surveillance responsibility for specific broker-dealers. As some firms have memberships on several exchanges, and in the FINRA and MSRB, one regulator is designated to a firm.

See: MSRB; FINRA

Designated Order
An order given to a municipal syndicate that indicates which syndicate members should receive the sales credit.

Designated Order Turnaround (DOT)
Electronic system provided by the New York Stock Exchange (NYSE) and used by NYSE members to expedite execution of market orders for 1 to 2,099 shares. The system routes the orders directly from the member firm to the specialist. A similar system called "Super Dot" routes limit orders.

See: Limit Order; Market Order; Specialist