Education Glossary

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Term Definition
Accrual Bond

A bond sold at a substantial discount on its face value and pays no coupons. Although there is no actual cash flow , the presumptive interest on an accrual bond is taxable under U.S. tax laws.

At-The-Market

A broker's instruction (order) to buy or sell at the prevalent bid or ask at the time the order is processed. 

At-Or-Better

A broker's instruction (order) to fill the order at a specific price or above.

Annual Report

A corporation's year-end financial statistics and operations summary filed annually with the Securities and Exchange Commission. The report details the company's financial condition, liabilities and forward-thinking plans.

Annuity

A financial product that is designed to accept and grow funds from an individual and then, upon pay out, a schedule of payments to the individual at a later time.

Accumulation/Distribution

A leading indicator that tracks the relationship between price and volume. Following a stock's accumulations or distributions may signal significant price moves.

Auction Market

A market in which buyers specify the highest price they will pay and sellers indicate the lowest price they will accept. A transaction occurs when the buyer and seller reach an agreement on price. The New York Stock Exchange (NYSE) operates as an Auction Market.

Arms Index

A market sentiment indicator designed by Richard Arms that evaluates Advance/Decline data and trading volume.

Aggregate Exercise Price

A put or call option's strike price multiplied by its contract size.

Advancing Issues

A quantity of securities that have increased in price during a specific time frame.

Assessment Bond

A special Municipal bond used primarily for development projects, where the interest due to the lender is collected through taxes levied on the community benefiting from the development project.

Active Trading

A speculative trading strategy that buys and sells securities to take advantage of short-term movements in price on high demand markets such as stocks and currencies, typically within one day.

Adjusted Closing Price

A stock's closing price on any specific day of trading that has been changed to include distribution and company activity that took place at any time prior to the next day's open.

Average Directional Index

A techncial indicator designed by J. Welles Wilder that measures the strength or weakness of a trend.

Amplitude

A technical analysis term that refers to the difference in price from the midpoint of a trench to the midpoint of a peak of a security.

Accumulative Swing Index

A technical indicator designed by J. Welles Wilder that quantifies the breakout potential of a given market. The current Open, High, Low and Close are compared to the prices of a previous period, with results plotted on a scale of 0 to +100 and 0 to  -100. 

Advance/Decline Index

A technical indicator that conveys the total difference between the number of advancing and declining security prices.

Algorithmic Trading

A technology driven system of trading which facilitates transaction decision making using advanced mathematical tools. It is also often referred to as algo trading or black box trading.

Abandon

A trader's decision to not sell or excercise an option. This typically occurs when an option has reached its time expiration or has reached "out-of-the-money' status.

Accumulation Bond

Also known as a "Discount Bond", this is a bond sold at a price below its face value and then redeemed at its face value at maturity.

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