Glossary of investing terms
# A B C D E F G H
I J K
L M N O P Q
R S T U
V W X
Y Z
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return (1-year,
3-month, 3-year) (The rate of return from a mutual
fund investment, expressed as a percentage. It is calculated as the
value per share of a mutual fund's price appreciation plus income
distributions, divided by the fund's net asset value. )
52-week high
(
The highest price for a security or fund during the past 52 weeks.
)
52-week low
(
The lowest price for a security or fund during the past 52 weeks.
)
A
ask (The price at
which a holder of a security is willing to sell, as opposed to the
bid price, which is what someone has offered to pay.)
average daily
volume (The total shares (or other units) of a security traded
during the current (or most recent) trading day.)
average maturity
(days) (The date on which a bond's principal must be repaid at
the face amount.)
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B
beta (A measure of
the sensitivity of a stock, bond, or fund to swings of an index or
the overall market. A beta of more than 1.0 indicates higher
volatility than the overall market. A beta of less than 1.0
indicates lower volatility than the overall market. )
bid (The price
someone has offered to pay for a security (as opposed to the ask
price, which is what the seller is willing to accept).)
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C
change (The difference
between the preceding day's closing price for a security and the
most recent price. Note: Prices are usually delayed by at least 20
minutes.)
current dividend
yield (The dividend yield for a security is reported as the
amount of its current per-share dividend, divided by the share
price.)
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D
day's high
(The highest price of a security during the current
day's trading.)
day's low
(The lowest price of a security during the current day's
trading.)
days until
expiration ( The date that an option expires. This is the last
day that the option holder can choose to purchase shares at the
strike price (or sell shares at the strike price, if the option is
a put).
For stock options, this is the Saturday immediately following the
third Friday of the expiration month; however, brokerage firms may
set an earlier deadline for notification of an option buyer's
intention to exercise. If Friday is a holiday, the last trading day
will be the preceding Thursday.)
dividends paid per
share (The cash payment per share made by a company to its
shareholders. )
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E
earnings date
(The date on which a company's earnings will next be
reported.)
earnings per share
(EPS) ( A company's net income divided by common shares
outstanding. EPS is a measure used as the basis for many
calculations that are used to assess whether a stock is overpriced
or underpriced. )
exchange
(An
organization that provides a marketplace for the trading of a
listed security. There are many exchanges around the world, but in
the United States, the New York Stock Exchange and the Nasdaq are
among the biggest.)
expiration date
(
The date that an option expires. This is the last day that the
option holder can choose to purchase shares at the strike price (or
sell shares at the strike price, if the option is a put).
For stock options, this is the Saturday immediately following the
third Friday of the expiration month; however, brokerage firms may
set an earlier deadline for notification of an option buyer's
intention to exercise. If Friday is a holiday, the last trading day
will be the preceding Thursday.)
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F
forward P/E
(Forward year price-earnings ratio (forward P/E) is the
analysts' consensus estimate for earnings per share in the
following 12 months divided by current price.)
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G
gain/loss
(The profit or loss on a given security or portfolio
expressed in dollars. It is calculated as market value minus cost
basis.)
grace period
(Period of time during which actions such as the
assessment of late fees are not taken, even though payment is due.
In some cases, interest may not be charged during a grace
period.)
gross pay
(Wages or salary before taxes and other
deductions.)
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I
industry full name
(The full name of the industry in which a company does
business.)
institutional
ownership (The share of a company's sotck that is owned by banks,
mutual funds, pension funds, insurance companies, and other
institutions that usually trade in very large lots.)
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L
last (The current
trading price of one unit of a particular security. Note: Prices
are usually delayed by at least 20 minutes.)
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M
market capital
(The value of a company's outstanding shares, calculated
as the total number of common shares outstanding multiplied by
their current price.)
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N
net assets
(A
figure, recorded in millions, that represents the current total
value of a mutual fund's holdings.)
Net Asset Value
(NAV) (The current value of an asset, calculated by
subtracting the asset's liabilities from its assets. For mutual
funds, the NAV is reported as the fund's current value divided by
the number of outstanding shares and is usually the price for one
share. )
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O
open (The price paid
in a security's first transaction of the current trading day.
)
open interest
(
The number of contracts outstanding for a given option or
commodities future. It measures how much interest there is in a
particular option or future. )
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P
percent change
(The percentage difference between the preceding day's
closing price and the current price. Note: Prices are usually
delayed by at least 20 minutes.)
previous close
(A
security's price at the end of the previous day's trading
session.)
P/E (price-earnings
ratio) (A stock's latest closing price divided by the latest 12
months' earnings per share. The P/E ratio is the most common way of
measuring how expensive a stock is. The higher the P/E ratio, the
more investors are willing to pay for it.)
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R
rating (The
Morningstar fund rating uses a scale of 1 (lowest) to 5 (highest)
stars to rank a fund's risk-adjusted return on investment in
comparison to other funds in its Morningstar category.)
return (The rate of
return from a mutual fund investment, expressed as a percentage. It
is calculated as the value per share of a mutual fund's price
appreciation plus income distributions, divided by the fund's net
asset value. )
risk (The
possibility that a security will lose value.)
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S
strike price
(
The price specified in an option contract. For a call, it's the
price at which the option holder can buy a stock; for a put, it's
the price at which the option holder can sell the stock.
)
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T
total shares
outstanding (The total number of shares issued by a company or
fund. )
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V
volume ( The total
shares (or other units) of a security traded during the current (or
most recent) trading day. )
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W
Windows Live ID
(An
online service that enables you to use your e-mail address and a
single password to sign in to any service or Web site that uses
Windows Live ID.)
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Y
yield (The income
(dividends, capital gains, or interest payments) from an
investment, as a percentage of the current price of the
investment.)
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