Bankruptcy proceeding rule where senior creditors have to be paid in full before junior creditors receive any payment.
Accelerated Cost Recovery System
Syn: ACRS Schedule of depreciation rates allowed for tax purposes.
Accelerated depreciation
Is a depreciation method that subtracts higher fractions of an asset's value early in its life.
Acceleration Clause
Is a clause that causes a forced repayment of a debt, this clause is used when predefined events do not occur or are not met.
Accounting Policies
The principles, bases, conventions, rules and procedures adopted by management/company in preparing and presenting financial statements.
Accounts Receivables
Monies owed to a business for merchandise or services sold on an open account.
Accreting Swap
An interest rate swap or currency swap where the principal or notional amount increases in steps over the life of the swap.
Accrued interest
Interest due from issue or from the most recent coupon date to the present on an interest bearing security, whereby, if the security is sold, the price is adjusted to take into account accrued interest.
Accrued Interest
The amount of interest owing but not paid.
Accumulation/Distribution Indicator (ADI)
is daily weighted volume indicator that moves with price: Price up - volume positive; Price down - volume negative.
Accumulative Swing Index (ASI)
based on the Swing Index, is a swing or wave system used to capitalize on breakout patterns. ASI is commonly used to confirm trendline breakouts
on price charts. (see report)
Acid Test Ratio
is a ratio that takes the current assets less inventories to total current liabilities. (acid test ratio = current assets less inventories / current liabilities). A ratio of less than one means the company cannot meet it's current liabilities. A ratio of greater than 1.5 - 2 would be a more desirable value. A value of 2 would mean the company could cover the liabilities twice.
Acquisition
One company taking over controlling interest in another company.
Additional margin
The amount which a market participant would have to deposit in order to cover the loss resulting from an assumed worst-case price fluctuation.
Address instruction
The amount which a market participant would have to deposit in order to cover the loss resulting from an assumed worst-case price fluctuation.
Adjustment on conversion
Difference between the redemption price of the old bonds and the price of the new bonds, calculated on the occasion of a bond conversion.
ADR
American depositary receipts, or ADRs, are shares of non-US companies traded in US dollars on US exchanges.
Advance-Decline (AD) Line
Is a market breadth indicator, providing a very good measure of overall market strength. (see report)
Advance-Decline Ratio (ADR)
Is one of the most frequently used measures of an issue's trend strength. By comparing the number of advances to declines, overbought conditions are indicated below .75 and oversold above 1.25.
ADX/DMI
The Directional Movement Index, DMI,is an effective and frequently used
trend indicator. This system was designed
by Welles Wilder Jr. and is made up of three lines : The +DI indicates
the up average. The -DI indicates
the down average. The ADX, average
directional movement index, shows
whether a trend is in effect by smoothing
the difference between the +DI and
-DI. See Report.
After-hours dealing
Transactions executed after the end of the mandatory quote period.
After-market
Transactions executed after the end of the mandatory quote period.
Agio
Amount by which an instrument sells above par. Also used to describe the difference in value between currencies, or the percentage charged on changing paper money into cash.
All-or-none order
Order to be executed in its entirety or not at all.
Allocation
Distribution of the bonds delivered among the holders of long positions.
American Depositary Receipt (ADR)
ADRs are receipts for the shares
of a foreign company. The share certificates
themselves are held by an American bank which issues the ADRs, then collects dividends and distributes them to
ADR-holders after converting them
into dollars. The holders of ADRs
normally have all the rights of normal
shareholders, including voting rights.
The ADRs are tradable instruments
in their own right. (see also Global
Depositary Receipt (GDR) and Euro
Depositary Receipt (EDR) )
American option
An option that may be exercised at any time prior to expiration.
Amex
American Stock Exchange.
Amortization
Depreciation allowance or loan repayment by installments.
Amortization Schedule
A schedule that shows precisely how a loan will be repaid. The schedule gives the required payment on each specific date and as well as percent paid to interest and percent paid to principle.
Amortizing Interest Rate Swap
Swap where the principal amount is linked to interest rates. The principal rises (declines) as interest rates rise (decline).
Analyst
Specialist who reviews securities for a brokerage firm.
Andrews' Pitchfork
Developed by Dr. Alan Andrews, based on what he called his "Action/Reaction" techniques. Originally called the "Median Line Study," this pattern
is based on a set of lines drawn from peaks and valleys on a price chart. When linked together, the arrangement of lines closely resembles a farmer's
pitchfork. (see report)
Annual percentage rate
Annual interest rate calculated by simply adding up monthly rates.
Annuity
An investment that generates contant cash flows for a limited period of time.
Annuity due
Annuity whose payments occur at the start of each period.
Annuity factor
Present value of $1 paid for each t periods.
Antidilution Provisions
A clause in a shareholders agreement which prevents a company from issuing additional shares, without allowing the current shareholders the opportunity to participate in the offering.
Appropriation request
A formal request for funds for a capital investment project.
APR
Annual interest rate calculated by simply adding up monthly rates.
Arbitrage
Involves the simultaneous purchase of a security in one market and the sale of it or a derivative product in another market to profit from price differentials between the two markets.
Arms Index or Trading Index (TRIN)
is a contrary indicator moving in the opposite direction of the market and useful in spotting short term extremes for intraday trading. Below 1.0 is positive and above 1.0 is negative. (see report)
Asian option
Option whose payoff is based on the average price of the asset during the life of the option.
Ask
the price a seller is willing to accept for a security. Sometimes referred to as the "offer price." Also see Bid.
Asset
Anything having commercial or exchange value that is owned by a business, institution or individual.
Asset allocation
Apportioning of investment funds among categories of assets, such as cash equivalents, stock, fixed-income investments, and such tangible assets as real estate, precious metals and collectibles.
Asset Coverage
The extent to which a company's net assets cover a particular debt obligation, class of preferred stock, or equity position.
Asset Swap
An interest rate swap or currency swap which is attached to an asset.
Asset-Backed Securities
Bonds or notes secured by assets of company/individual.
Asset-Based Financing
Loans which are granted where the asset being financed constitutes the sole security given to the lender.
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Absolute priority rule
Bankruptcy proceeding rule where senior creditors have to be paid in full before junior creditors receive any payment.