COST BASIS
Purchase price, including commissions and other expenses, used to determine capital gains and capital losses for tax purposes.
The cost of an asset used to determine tax liabilities. This number is the purchase price, including capital gains and losses, accrued interest, and other fees. also called tax basis.
The difference between the cash price and the futures price of a given commodity.
Market If Touched - MIT
A conditional order that becomes a market order when a security reaches a specified price. When using a buy market-if-touched order, a broker will wait until the security falls to a certain level before purchasing the asset. A sell market-if-touched order will activate when the price of a security rises to the specified level.
Also referred to as a "board order".
A MIT order allows investors to purchase or sell a security at a desired value, without actively monitoring the market. This order is similar to a stop order, however, the buy and sell actions are inverse. For example, a buy MIT order looks for the price of an asset to fall, while a buy stop order activates when the market value of the security increases past a specified level.
What Does Pump Priming Mean?
The action taken to stimulate an economy, usually during a recessionary period, through government spending, and interest rate and tax reductions. The term "pump priming" is derived from the operation of older pumps; a suction valve had to be primed with water so that the pump would function properly. As with these pumps, pump priming assumes that the economy must be primed to function properly once again. In this regard, government spending is assumed to stimulate private spending, which in turn should lead to economic expansion.
The phrase originated with President Hoover's creation of the Reconstruction Finance Corporation (RFC) in 1932, which was designed to make loans to banks and industry. This was taken one step further by 1933, when President Roosevelt felt that pump-priming would be the only way for the economy to recover from the Great Depression. Through the RFC and other public works organizations, billions of dollars were spent "priming the pump" to encourage economic growth.
The phrase was rarely used in economic policy discussions after World War II, even though programs developed and used since then, such as unemployment insurance and tax cuts, are automatic pump primers of sorts. However, during the financial crisis of 2007/2008 the term came back into use, as interest rate lowering and infrastructure spending was thought to be the best path to economic recovery.