Exchange that provides a means to trade stocks not listed on the national exchanges.
over - the - counter market (OTC)
Bonds that are unsecured(i.e. not backed by any collateral such as equipment).
The first public offering of a corporation's stock.
initial public offering (IPO)
An action by a company that gives stockholders two or more shares of stock for each one they own.
Purchasing stocks by borrowing some of the purchase cost from the brokerage firm.
buying stock on margin
High risk, high interest bonds.
Shares of ownership in a company.
A registered representative who works as a market intermediary to buy and sell securities for clients.
Part of a firms profits that the firm may distribute to stockholders as either cash payments or additional shares of stock
The most basic form of ownership in a firm; it confers voting rights and the right to share in the firms profits through dividends, if approved by the firm's board of directors.
Stock that gives its owners preference in the payment of dividends and an earlier claim on assets than common stockholders if the company is forced out of business and its assets sold.
The average cost of 30 selected industrial stocks, used to give an indication of the direction(up or down) of the stock market over time.
Dow Jones Industrial Average (the Dow)
A nationwide electronic system that links dealers across the nation so that they can buy and sell securities electronically.
A corporate certificate indicating that a person ahs lent money to a firm (or a government.)
The exact date the issuer of a bond must pay the principal to the bondholder
The payment the issuer of a bond makes to the bondholders for use of the borrowed money.
Collections of stocks and bonds that are traded on exchanges but are traded morelike individual stocks than like mutual funds.
exhange - traded funds (ETFs)
Federal agency that has responsibility for regulating the various stock exchanges.
Securities & Exchange Commision (SEC)
A condensed version of economic and financial information that a company must file with the SEC before issuing stock; the prospectus must be sent to prospective investors.
Evidence of stock ownership that specifies the name of the company, the number of shares it represents, and the type of stock being issued.
A reserve account in which the issuer of a bond periodically retires some part of the bond principle prior to maturity so that enough capital will be accumulated by the maturity date to pay off the bond.
Large organizations - such as pension funds, and insurance companies - that invest their own funds or funds of others.
Buying several different alternatives to spread the risk of investing.
An organization whose members can buy and sell (exchange) securities for companies and individual investors.
The positive difference between the purchase price of a stock and its sale price.
Giving instructions to computers to automatically sell if the price of a stock dips to a certain point to avoid potentail losses.
An organization that buys stocks and bonds and then sell shares in those securities to the public.
Specialists who assist in the issue and sale of new securities.