Standard & Poor's Corporation (S & P)
A provider of a wide variety of investment-related services including rating bonds, stocks, and commercial paper; publishing statistical information and reports; and compiling indexes, including the Standard & Poor's Index of 500 Stocks.
See: Moody's Investors Service; Rating; Standard & Poor's 500 Index
Standard & Poor's 500 Index
A composite index that tracks 500 industrial, transportation, public utility, and financial stocks. The selection of stocks included in the index is determined by Standard & Poor's Corporation, which also publishes the index.
See: Index; Standard & Poor's Corporation
A method of voting whereby a shareholder receives one vote for each share and may cast his votes for each of the directorships. A shareholder, for example, who owns 1000 shares of a corporation that is electing three directors, can cast 1000 votes for each of the three candidates.
See: Cumulative Voting; Voting Right; Voting Stock
Ownership of a corporation as evidenced by shares which are a claim on the corporation's earnings and assets.
See: Stock Certificate
A condition that occurs when an order is not executed because there are other orders awaiting execution, which were entered earlier, at the same price. If two orders are entered for the same price at the same time, the order for the larger number of shares takes precedence.
A corporation's purchase of its own shares, usually to discourage a takeover attempt.
A document evidencing ownership in a corporation.
A dividend that is paid in securities, rather than cash. The additional shares may be of the issuing company, or of a subsidiary.
See: Cash Dividend; Dividend; Dividend Reinvestment Plan
An organized marketplace where members gather to trade securities. Members may act either as agents for customers, or as principals for their own accounts.
See: Member Firm
An individual who owns one or more shares of a corporation's stock, whether common or preferred stock. Stockholders may earn dividends and stockholders who have common stock have voting rights with regard to matters that affect the corporation.
See: Common Stock; Corporation; Dividend; Preferred Stock; Shareholder; Voting Right
Stockholder Of Record
A stockholder whose name is registered on the books of the issuing corporation as owning the shares as of a particular date. Dividends and other distributions are made to stockholders of record.
See: Dividend; Record Date
The total equity ownership of a corporation by its shareholders, consisting of preferred stock, common stock, retained earnings, and capital surplus. It is the difference between a company's total assets and total liabilities.
See: Asset; Common Stock; Equity; Liability; Preferred Stock; Retained Earnings; Shareholder's Equity
A form used in the transfer of registered securities from one owner to another. A stock power replicates the assignment form on the back of the stock certificate, but it is separated from the certificate. Hence, a stock power is sometimes called an "assignment separate from certificate". Although both achieve the same goal, a stock power has a safety advantage in being separate.
See: Assignment; Bond Power; Certificate; Registered Security
Partitioning the outstanding shares of a corporation into a larger number of shares, without affecting shareholders' equity or the total market value at the time of the split. For instance, if a stock valued at $100 splits 2-for-1, an investor who owns 100 shares would now own 200 shares valued at $50. Splits usually must be voted on by directors and approved by shareholders.
See: Equity; Outstanding Stock; Reverse Split; Shareholder's Equity; Split
A unique code, using all letters, given to all securities trading on the NYSE, AMEX or NASDAQ. The symbols identify the corporation and facilitates trading and ticker reporting.
See: AMEX; NASDAQ; NYSE; Order Ticket; Ticker Tape
Stop Limit Order
A combination of a stop order and limit order--that is, the order becomes a limit order after the specified stop price has been reached.
See: Limit Order; Orders; Stop Order
An order that becomes a market order when a round lot in an NYSE or AMEX listed security trades at or through a specified price (stop price) or when the national best bid in a NASDAQ listed security reaches the specified price. A stop order is usually used to protect paper profits or limit the extent of possible losses.
See: Market Order; Orders; Paper Profit (Loss); Round Lot; Stop Limit Order
A term used by a specialist who guarantees that a public order to buy or sell will be executed at the best bid or offer price in his book, unless it can be executed at a better price within a certain time period. This allows brokers to possibly obtain a better price for their clients without the fear of missing the market (if buying--the security rises, if selling--the security drops). For example, a broker with a market order to buy is stopped at 22 by a specialist. This means that the broker will not pay more than 22 for the stock, but may be able to buy at a better price.
See: Asked Price; Market Order; Missing The Market; Specialist
Slang for "Wall Street". It is used to refer to the investing community as a whole.
See: Wall Street
Said of securities held in the name of the broker-dealer rather than in the name of the client. The client remains the beneficial owner. All dividends that would otherwise be mailed directly from the company to the stockholder are credited to the client's account or forwarded as the client directs. Corporate reports and proxy statements are forwarded to the customer.
See: Beneficial Owner; Nominee; Proxy Statement
The predetermined exercise price of a put or call option--also called "striking price".
See: Call Option; Exercise; Exercise Price; Options; Put Option
Term used by a dealer giving bids and/or offers that must be reviewed before a final decision to buy or sell can be made.
See: Dealer; Firm Quote; Inside Quote; Nominal Quotation
A certificate that evidences a shareholder's privilege to buy additional shares of new securities in proportion to the number of shares already owned. A company, when raising more funds by issuing new securities, may issue rights to its shareholders to give them the chance to buy additional shares before the general public. Because rights usually allow the stockholder to buy below the current market price, they ordinarily have a value of their own and are actively traded. Most rights are valid for a relatively short period. Failure to exercise or sell rights may result in monetary loss.
See: Ex-Rights; New Issue; Preemptive Right; Sweetener
A certificate that gives a shareholder the right to purchase a security at a specified price within a predetermined time period or perpetually. At the issuance of the warrant, the specified price is usually higher than its current market value. Corporations issue warrants directly and they are sometimes offered along with a security as incentive to buy. Warrants are transferable and are traded on major stock exchanges. The abbreviation "WT" is used in newspaper stock listings.
See: Ex-Warrants; Perpetual Warrant; Subscription Right; Sweetener
The lower level of a security's trading range where buying pressure tends to bid up the price of the security. That is, its price stops falling because there is more demand for the security than there is supply. If, however, the security's price falls below its support level, analysts consider this to be very bearish.
See: Bear; Oversold; Resistance Level
A halt in the trading of a particular security that is usually temporary. This may occur because of an imbalance of buy and sell orders or because of a significant news announcement.
See: Delayed Opening; Trading Halt
A feature, such as being convertible or having a right or warrant attached, that is added to security offerings to make it more attractive to investors.
See: Convertible Securities; Kicker; Right; Warrant
In mutual funds, the movement of assets from one fund to another. This is usually done within a family of funds, but can be done between different fund families. Within a no load family, there usually is no charge or a nominal transaction fee. This is also usually true for a load family as long as the fund being switched into has the same sales charge (or less) as the one that the investor already owns. When switching to a mutual fund that belongs to a different family of funds, if the new fund is a no load--there is no charge, and if the new fund is a load fund--it is sales charge of the new fund.
An investor will switch mutual funds when their investment objectives change or because of market conditions.
See: Family Of Funds; Load Mutual Fund; Mutual Fund; No Load Mutual Fund
Risk that is common to all securities of the same class (stocks, bonds, options)--also known as "market risk". This risk cannot be eliminated by diversifying one's portfolio.
See: Diversification; Market Risk; Risk