Trading Glossary
Ask
The price at which someone who owns a security offers to sell it; also known as the asked price.
Assets
Any possessions that has value in an exchange.
Beta
A measure of the volatility of a stock relative to the overall market. A beta of less than one indicates lower risk than the market; a beta of more than one indicates higher risk than the market. Nasdaq.com uses the S&P 500 as the underlying index to measure the overall market for beta.
Bid
The price a prospective buyer is prepared to pay at a particular time for trading a unit of a given security.
Date of Record
The date on which a shareholder must officially own shares in order to be entitled to a dividend.
Distribution Date
Date on which the payout of realized capital gains on securities in the fund portfolio occurred.
Distribution Date
Date on which the payout of realized capital gains on securities in the fund portfolio occurred.
Earnings Per Share (EPS)
EPS represents the portion of a company's profit allocated to each outstanding share of common stock. Net income (reported or estimated) for a period of time is divided by the total number of shares outstanding (TSO) during that period; See growth rate measures for EPS.
Ex-dividend Date (most important date for dividends)
The date on or after which a security begins trading without the dividend (cash or stock) included in the contract price.
Limit Order
A Limit Order is an order to buy or sell a stock at a customer specified price.
Load Fund
Mutual Fund that is sold for a sales charge by a brokerage firm or other sales representative. Such funds may be stock, bond or commodity funds, with conservative or aggressive objectives.
Long Term Gain
A gain on the sale of a capital asset where the holding period was twelve months or more and the profit was subject to the long term capital gains tax.
Margin account
A brokerage account that permits an investor to purchase securities on credit and to borrow on securities already in the account. Buying on credit and borrowing are subject to standards established by the Federal Reserve and by the firm carrying the account. Interest is charged on any borrowed funds only for the period of time the loan is outstanding.
Market Makers
Market Order
A Market Order is an order to buy or sell a stock at the market's current best displayed price.
Maturity Date
The date on which the principal amount of a bond is to be paid in full.
Money Market Fund
Open-ended mutual fund that invests in commercial paper, banker's acceptances, repurchase agreements, government securities, certificates of deposit, and other highly liquid and safe securities, and pays money market rates of interest. The fund's net asset value remains a constant $1 a share, only the interest rate goes up or down.
Mutual Fund
Fund operated by an investment company that raises money from shareholders and invests it in stocks, bonds, options, commodities or money market securities.
Over the Counter Bulletin Board (OTCBB)
The OTCBB is a regulated quotation service that displays real-time quotes, last-sale prices, and volume information in over-the-counter (OTC) equity securities. An OTC equity security generally is any equity that is not listed or traded on NASDAQ or a national securities exchange. Approved by the SEC in 1997, OTCBB securities include national, regional, and foreign equity issues, warrants, units, American Depositary Receipts (ADRs), and Direct Participation Programs (DPPs).
Payment Date
The date on which a dividend or split will be paid to stockholders by the issuers' paying agents. The payable date is the date on which one must own the shares (at the close of the session) in order to receive the split.
Securities and Exchange Commission (SEC)
The federal agency created by the Securities Exchange Act of 1934 to administer that act and the Securities Act of 1933. The statutes administered by the SEC are designed to promote full public disclosure and protect the investing public against fraudulent and manipulative practices in the securities markets. Generally, most issues of securities offered in interstate commerce or through the mails must be registered with the SEC.
Settlement Date
The date specified for delivery of securities between securities firms, usually three business days after the execution of an order.
Short Selling
Short selling is the selling of a security that the seller does not own, or any sale that is completed by the delivery of a security borrowed by the seller. Short selling is a legitimate trading strategy. Short sellers assume the risk that they will be able to buy the stock at a more favorable price than the price at which they sold short.
The Nasdaq Short Sale Rule prohibits NASD members from selling a Nasdaq National Market stock at or below the inside best bid when that price is lower than the previous inside best bid in that stock.
Short Term Gain
The profit realized from the sale of securities or other capital assets held twelve months or less.
