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Stock market terms...
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Yamini Bhaskar
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Wink Stock market terms... - December 18th, 2008

hi folks i m starting new post of terms used in stock market .. kindly provide ur inputs too..
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Re: Stock market terms... - December 18th, 2008

butterfly spread

An options strategy built on four trades at one expiration date and three different strike prices. For call options, one option each at the high and low strike price are bought, and two options at the middle strike price are sold. For put options, the trades are reversed. This is a limited risk, limited return strategy that pays off when the price of the underlier remains around the middle strike price. This strategy is essentially a combination of a bull and bear spread.

REAL ESTATE INVESTMENT TRUST
REIT. A corporation or trust that uses the pooled capital of many investors to purchase and manage income property (equity REIT) and/or mortgage loans (mortgage REIT). REITs are traded on major exchanges just like stocks. They are also granted special tax considerations. REITs offer several benefits over actually owning properties. First, they are highly liquid, unlike traditional real estate. Second, REITs enable sharing in non-residential properties as well, such as hotels, malls, and other commercial or industrial properties. Third, there\'s no minimum investment with REITs. REITs do not necessarily increase and decrease in value along with the broader market. However, they pay yields in the form of dividends no matter how the shares perform. REITs can be valued based upon fundamental measures, similar to the valuation of stocks, but different numbers tend to be important for REITs than for stocks.

DEFENSIVE STOCK
A STOCK THAT TENDS TO REMAIN STABLE UNDER DIFFICULT ECONOMIC CONDITIONS. DEFENSIVE STOCKS INCLUDE FOOD, TOBACCO, OIL, AND UTILITIES. THESE STOCKS HOLD UP IN HARD TIMES BECAUSE DEMAND DOES NOT DECREASE AS DRAMATICALLY AS IT MAY IN OTHER SECTORS. DEFENSIVE STOCKS TEND TO LAG BEHIND THE REST OF THE MARKET DURING ECONOMIC EXPANSION BECAUSE DEMAND DOES NOT INCREASE AS DRAMATICALLY IN AN UPSWING.

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.
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Smile Re: Stock market terms... - December 21st, 2008

Bear Market

A bear market refers to a continuous phase of declining share prices. Bear markets are characterised by overall pessimism as market participants expect prices to decline in the future.

Book Building

The process of securing the optimum price for a company's share. The issuing company decides the price of the security by asking investors how many shares at what price they would be interested in.

Bull Market

A bull market refers to a continuous phase of rising prices. Bull markets are charaterised by optimism about the upward movement of prices in the future.

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Re: Stock market terms... - December 27th, 2008

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.
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Re: Stock market terms... - December 27th, 2008

BOOK VALUE

1)the value at which an asset is carried on a balance sheet.since the asset is subjected to depreciation,the book value is lower every year.cost minus accumulated depreciation will thus show the book value ok an asset.

2)the net asset value(NAV)of a company's share.take the total assets of a company and deduct current liabilities,long term liabilities,and preferance shares.what remains is shareholders fund,divide this by the number of shares issued.the result is the book value of a share.

Note: a good company should focus on increasing its book value(asset) year after year.

ARBITRAGE

profiting from differences in peice of the same share traded on two or more stock exchanges.An arbtrageur makes money by buying in lower market and immediately thereafter selling in the higher market,or vice versa,thereby making a profit.

ASSET VALUE OR NAV

term used by mutual funds and other investment trusts,to indicate the net tangible asset value of each share,calculated by taking the total value of an investment portfolio on market rates on a certain date and dividing it by the number of outstanding shares.the net asset value of a mutual fund indicates how well or badly the fund managers have played the stock market.


BASE MARKET VALUE

Average market price of a group of shares at a given time.Used for plotting changes in market indexing.
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Re: Stock market terms... - January 15th, 2009

its help me alot so thanks u dude &good 2 have u
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Re: Stock market terms... - January 16th, 2009

Fundamental analysis


A method of security valuation which involves examining the company's financials and operations, especially sales, earnings, growth potential, assets, debt, management, products, and competition. Fundamental analysis takes into consideration only those variables that are directly related to the company itself, rather than the overall state of the market or technical analysis data.

leaseback

Arrangement in which one party sells a property to a buyer and the buyer immediately leases the property back to the seller. This arrangement allows the initial buyer to make full use of the asset while not having capital tied up in the asset. Leasebacks sometimes provide tax benefits. also called sale and leaseback.

open-end fund

A fund operated by an investment company which raises money from shareholders and invests in a group of assets, in accordance with a stated set of objectives. Open-end funds raise money by selling shares of the fund to the public, much like any other type of company which can sell stock in itself to the public. Mutual funds then take the money they receive from the sale of their shares (along with any money made from previous investments) and use it to purchase various investment vehicles, such as stocks, bonds and money market instruments. In return for the money they give to the fund when purchasing shares, shareholders receive an equity position in the fund and, in effect, in each of its underlying securities. For most open-end funds, shareholders are free to sell their shares at any time, although the price of a share in an open-end fund will fluctuate daily, depending upon the performance of the securities held by the fund. Benefits of open-end funds include diversification and professional money management. Open-end funds offer choice, liquidity, and convenience, but charge fees and often require a minimum investment. also called mutual fund.

Its basically a fund operated by an investment company by raising money from general public in order to invest their money in a joint ,in return for the money they give to the fund when purchasing share, shareholder receive an equity position
For most of the open ended funds, shareholders are free to sell
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Re: Stock market terms... - January 16th, 2009

cash flows from investing activities


An accounting of funds related to the company's investments, reported on the cash flow statement of a company's annual report. This number shows how much money the company has received (or lost) from its investing activities. It includes money that the company has made (or lost) by investing its excess cash in different investments (stocks, bonds, etc), money the company has made (or lost) from buying or selling subsidiaries, and all the money the company has spent on its physical property, such as plants and equipment.

sector

A distinct subset of a market, society, industry, or economy, whose components share similar characteristics. Stocks are often grouped into different sectors depending upon the company's business. Standard & Poor's breaks the market into 11 sectors. Two of these sectors, utilities and consumer staples, are said to be defensive sectors, while the rest tend to be more cyclical in nature. The other nine sectors are: transportation, technology, health care, financial, energy, consumer cyclicals, basic materials, capital goods, and communications services. Other groups break up the market into different sector categorizations, and sometimes break them down further into subsectors.
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Re: Stock market terms... - January 16th, 2009

ex-date

In a stock split, the date that the share price changes to reflect the split.
For a dividend, the first day of the ex-dividend period. The ex-date was created to allow all pending transactions to be completed before the record date. If an investor does not own the stock before the ex-date, he or she will be ineligible for the dividend payout. Further, for all pending transactions that have not been completed by the ex-date, the exchanges automatically reduce the price of the stock by the amount of the dividend. This is done because a dividend payout automatically reduces the value of the company (it comes from the company's cash reserves), and the investor would have to absorb that reduction in value (because neither the buyer nor the seller are eligible for the dividend). also called ex-dividend date.

lead manager


The commercial or investment bank which has primary responsibility for organizing a given credit or bond issuance. This bank will find other lending organizations or underwriters to create the syndicate, negotiate terms with the issuer, and assess market conditions. also called syndicate manager, managing underwriter or lead underwriter.

rate of exchange

Rate at which one currency may be converted into another. Generally, one unit of the home currency is expressed in terms of another currency. For example, an American bank may quote the exchange rate between the dollar and the Yen as the number of dollars needed to buy one yen. also called exchange rate or foreign exchange rate or currency exchange rate.
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Re: Stock market terms... - April 25th, 2009

i hv also posted the stock market terms in details as per alphabatically order u can have a look



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