Financing that is required, but for which no provision has been made. The difference in total funding needed for a proposal and the amount of funding already made available.
In the context of general equities, opening price that is substantially higher or lower than the previous day's closing price, usually because of some extraordinarily positive or negative news.
Rising stock prices and increased market activity in an entire sector caused by a psychology change stemming from a major takeover involving two companies in the sector. Speculators feel other takeovers are likely in the sector. See: Rumortrage.
An economic technique used to account for inflation by comparing the current-dollar gross domestic product GDP to constant-dollar GDP as a ratio. The ratio accounts for price changes of goods and services that make up GDP and changes in the composite of GDP.
Refers to the corporate bond spread for a particular credit rating and expiry.
For example, 10-year single A corporates were priced or trading at 130 basis points above Treasuries last
night, or said diffrently,
130 is the generic credit spread for 10-year single A corporates.
An attachment that gives the lender the right to seize the personal property of a borrower who has not fulfilled the obligations of the loan, but prevents the lender from seizing real property.
The sum of taxes, charges, and miscellaneous income taken in at the state and local level while neglecting overlapping revenue which may be erroneously counted twice.
A trust in which a principal amount is placed in a trust on the death of person A and is transferred to A's grandchildren when A's children die. The income from the trust goes to the children of person A while they survive.
Describes the characteristics and/or experience of the total universe of a coupon of MBS sector type; that is, in contrast to a specific pool or collateral group, as in a specific CMOissue.
Models that optimize rules by mimicking the Darwinian Law of survival of
the fittest. A set of rules are chosen by those that work the best. The weakest are
discarded. In addition, two successful rules can be combined (the equivalent to genetic
cross-overs) to produce offspring rules. The offspring can replace the parents, or they will
be discarded if less successful than the parents. Mutation is also accomplished by
randomly changing elements. Mutation and cross-over occur with low probability, as in
nature.
Risk that arises when an issuer issues policies concentrated within certain geographic areas, such as the risk of damage from a hurricane or an earthquake.
A reverse repurchase agreement between mortgage firms and securitiesdealers. Under the agreement, the firm sells federal agency-guaranteed MBS and simultaneously agrees to repurchase them at a future date at a fixed price.
Go lower in price, when bids in the stock or market are hit, causing those bids to vanish and be replaced by lower ones. Come in. Antithesis of on the take.
The illegal practice that one firm drives a stock's price higher or lower, while other conspiring firms follow its lead to influence up the price of the stock.
A technique used to avoid a gift tax in which a large sum of money to be given by two parents to a child is halved and given to the child separately For example, a husband and wife each donate $10,000 to their child rather than one parent donating $20,000.
Used for listed equity securities. (1) Term used in a securities transaction involving three brokers, as follows: Broker A, a floor broker, executes a buy order for broker B (a member firm broker who has too much business at the time to execute the order). The broker with whom broker A completes the transaction (the sell-side broker) is broker C. Broker A "gives up" the name of broker B, so that the record shows a transaction between broker B and broker C even though the trade is actually executed between broker A and broker C; (2) distribution of commissions to brokerage houses not participating in a trade. This is a grey area of the law governing reimbursement of a broker for services (e.g., research). See: Directed brokerage.
Mortgage-backed securities (M.B.S.) on which registered holders receive separate principal and interest payments on each of their certificates, usually directly from the servicer of the M.B.S. pool. GNMA-I mortgage-backed securities are single-issuer pools.
Mortgage-backed securities (M.B.S.) on which registered holders receive an aggregateprincipal and interest payment from a central paying agent on all their certificates. Principal and interest payments are disbursed on the 20th day of the month. GNMA-II M.B.S. are backed by multiple-issuer pools or custom pools (one issuer but different interest rates that may vary within one percentage point). Multiple-issuer pools are known as "jumbos." Jumbo pools are generally longer and offer certain mortgages that are more geographically diverse than single-issuer pools. Jumbo pool mortgage interest rates may vary within one percentage point.
A GNMA pass-through certificate backed by fixed-rate mortgages with a 15-year maturity. GNMA Midget is a dealer term and is not used by GNMA in the formal description of its programs.
Used for listed equity securities. Buy or sell at prices that randomly occur on the floor, participating in what trades the specialist and other players will allow.
An aggressive takeover technique in that the proposed offer of the acquiring company is so large that management of the target company cannot refuse, out of fear of lawsuits or shareholder revolt.
Used in the context of general equities. (1) Trades ("10 IBM goes on at 115 "); see Print; (2) indicates a change in the stock's inside market ("Apple goes 3/4 bid").
The type of bond purchased by dealers for immediate resale to investors, as opposed to purchasing bond, to hold for some amount of time, and then reselling it at a future date.
The value of a company to another company or individual in terms of an operating business. The difference between a company's going-concern value and its asset or liquidation value is deemed goodwill and plays a major role in mergers and acquisitions.
When publicly owned stock in a firm is replaced with complete equity ownership by a private group. The firm is delisted on stock exchanges and can no longer be purchased in the open markets.
Selling stock that an investor does not own by borrowingshares from a broker. The assumption is that the price will fall. The investor then buys (covers the short) the shares at a lower price than what they were sold for, recognizing the difference as a profit. Antithesis of going long.
Used in the context of general equities. 1) Condition of the traders position in the security and expectations of stock placement with accounts just prior to taking an order to the exchange floor for execution; 2) On the way in. Antithesis of come out of the trade.
A fixed exchange rate system adopted in the Bretton Woods agreement. It required the U.S. to peg the dollar to gold and other countries to peg their currencies to the dollar.
An international monetary system in which currencies are defined in terms of their gold content, and payment imbalances between countries are settled in gold. It was in effect from about 1870 to 1914.
A contract that binds a broker to a brokerage firm by offering the brokercommissions and bonuses, but penalizes the broker if he or she goes to work for another firm.
Used in the context of general equities. Market or limited price order that remains viable for a stated period of time unless cancelled, executed, or changed, after which such order or the portion thereof not executed is to be treated as cancelled.
An order to buy or sell stock that is good until you execute or cancel it. Brokerages usually set a limit of 30-60 days, at which the G.T.C. order expires if not restated. (Different from a day order.)
A wholly owned U.S. government corporation within the Department of Housing & Urban Development. Ginnie Mae guarantees the timely payment of principal and interest on securitiesissued by approved servicers that are collateralized by FHA-issued, VA-guaranteed, or Farmers Home Administration (FmHA)-guaranteed mortgages.
U.S. government-backed debt instruments, which are considered among the safest investments possible, including Treasury bonds, bills, and notes, and savings bonds.
Privately owned, publicly chartered entities, such as the Student Loan Marketing Association, created by Congress to reduce the cost of capital for certain borrowing sectors of the economy including farmers, homeowners, and students.
U.S. government-issuedsecurities, such as Treasury bills, bonds, and notes, and savings bonds. Governments are considered among the safest investments available as they are backed by the U.S. government.
Also used to refer to debtissues of federal agencies, which are not directly backed by the U.S. government.
A type of stepped-payment loan in which the borrower's payments are initially lower than those on a comparable level-rate mortgage. The payments gradually increase over a predetermined period (usually 3, 5, or 7 years), and then are fixed at a level-pay schedule, which will be higher than the level-pay amortization of a level-pay mortgage originated at the same time. The difference between what the borrower actually pays and the amount required to fully amortize the mortgage is added to the unpaid principal balance.
An investment strategy based on security analysis and identification. Investors buy stocks with undervalued assets speculating that these assets will appreciate to their true value.
Performance measure developed by John Graham and Campbell Harvey. The idea is to lever a fund's portfolio to exactly match the volatility of the S&P 500. The difference between the fund's levered return and the S&P 500 return is the performance measure.
Performance measure developed by John Graham and Campbell Harvey. The idea is to lever the S&P 500 portfolio to exactly match the volatility of the fund. The difference between the fund's return and the levered S&P 500 return is the performance measure.
A provision included in a new rule or regulation that exempts a business that is already conducting business in the area addressed by the regulation from penalty or restriction.
A tax-saving trust in which a grantor transfers property to a beneficiary, but receives income until termination, at which time the beneficiary begins receiving the income.
Bear market in which investors who sell are faced with substantial losses, while potential investors prefer to stay liquid; that is, to keep their money in cash or cash equivalents until market conditions improve.
In a merger or acquisitions, a gray knight is an acquiring company that outbids a white knight in pursuit of its own best interests, although it is friendlier than a hostile bidder.
Formal roster of stocks that can be traded by the block desks, but not in risk arbitrage because an investment bank is involved with the company on nonpublic activity (e.g., mergers and acquisitions defense). A stock's presence on this list should never be conveyed to anyone outside the trading area, much less outside the firm. See: Restricted list.
Used in the context of general equities. Potential customer who may have an interest in participating in a particular trade if customer's past inquiry or activity is any indication.
An investment notion that even when a stock is fully valued by conventional standards, there is room for upward movement because there are enough buyers to push prices farther upward purely on speculation or hype.
The holding of a large block of stock of a target company by an unfriendly company, with the object of forcing the target company to repurchase the stock at a substantial premium to prevent a takeover.
The market value of goods and services produced over time including the income of foreign corporations and foreign residents working in the U.S., but excluding the income of U.S. residents and corporations overseas.
A type of property lease in which the lessor (owner of the property being leased) pays expenses associated with ownership such as damages, taxes, and insurance.
Measures and economy's total income. It is equal to G.D.P. plus the income abroad accruing to domestic residents minus income generated in domestic market accruing to non-residents.
Applies mainly to convertible securities and international equities. Antithesis of net parity. For the price of a convertible, including accrued interest. For the price of international security, including commissions, fees, stamp duty, and other transaction costs, translated into U.S. dollar amounts.
The five leading countries (France, Germany, Japan, the U.K., and the U.S.) that meet periodically to achieve some cooperative effort on international economic issues. When currency issues are discussed, the monetary authorities of these nations hold the meeting.
A group of the ten major industrialized countries whose mission is to create a more stable world economic trading environment through monetary and fiscal policies. The ten are Belgium, Canada, France, Germany, Italy, Japan, the Netherlands, Sweden, the United Kingdom, and the United States.
The tendency of stocks in one sector of the market to outperform and then underperform other industries, usually as a result of economic cycles or the conditions in a particular industry.
A money manager who seeks to buystocks that typically sell at relatively high P/E ratios due to high earnings growth, with the expectation of continued high or higher earnings growth.
Compound annual growth rate for the number of full fiscal years shown. If there is a negative or zero value for the first or last year, the growth is N.M. (not meaningful).
A life and health insurance policy feature that enables the insured to add coverage at future times and at fixed and agreed-upon rates regardless of health conditions.
A pure investment product in which a life company agrees, for a single premium, to pay at a maturity date the principal amount of a predetermined annual crediting (interest) rate over the life of the investment.
A type of insurance policy that requires the insurer to renew the policy to an individual regardless of health changes. No changes may be made to an individual policyholder unless the same change is applied to all policyholders.
Under the Freddie Mac program, the aggregation by a single issuer (usually an S&L) for the purpose of forming a qualifying pool to be issued as PCs under the Freddie Mac guarantee.