Financial Dictionary

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B – School

Abbreviation of business school, an educational institution that focuses on teaching business-related courses. While business schools may offer courses ranging from undergraduate degrees to postdoctoral programs, their prime offering is the Master of Business Administration (MBA) program. Top-tier business schools are usually renowned for the high quality of their graduates, many of whom climb the […]

Baby Bonds

Fixed income securities issued in small denominations, generally with a maximum face value of $5,000. The small denominations enhance the attraction of baby bonds to the average retail investor. Baby bonds are now issued mainly by municipalities, counties and states to fund expensive infrastructure projects and capital expenditures. These tax-exempt municipal bonds are generally structured […]

Back Door Listing

A way for private companies to go public if they do not meet the strict Securities and Exchange Commission filing requirements of public company. They acquire public company and use the acquisition for gaining a listing on public exchange.

Back Office

Departments of a financial institution that perform work out of sight of customers, including bookkeeping and the processing of checks and loan payments.

Back Spread

A type of options spread in which a trader holds more long positions than short positions. The premium collected from the sale of the short option is used to help finance the purchase of the long options. This type of spread enables the trader to have significant exposure to expected moves in the underlying asset […]

Bad Will

A “feel” among shareholders and general public which reflects negative effects of management decisions. Bad will usually cannot be expressed in dollar amount, but will affect the clients, suppliers, market share or downturn in company stock.

Bagel Land

A slang term that describes stocks that have fallen from grace to nearly $0 in price. Bagel land usually occurs because of bad business decisions, which in most cases may not be recoverable. However, there is a chance for a company to return from bagel land, but the chance that investors will lose their entire […]

Balanced Fund

A mutual fund that seeks both growth and income in a portfolio with a mix of common stock, preferred stock or bonds. The companies selected are in different industries and different geographic regions.

Balloon Loan

A long term loan, which does not fully amortize during the term, and has one large payment at the end of the term. That final payment is called balloon payment. The major problem with balloon loans are that the borrower must be self disciplined spender and forward thinking.

Bar Chart

One of the most popular graphical representations of daily price changes. Bar chart is consisted of a vertical line, whose top represents daily high, while bottom represents the daily low. Closing and opening prices are also represented on the chart. Opening price is on the left side, while closing price is on the right side […]

Basing

An occurrence on the chart when stock price has very little or no trend at all. It usually occurs after a strong upward or downward movement of the stock, when it needs a significant period of time before trend is reversed. Result of basing phenomena on the chart is a flat line, and it is […]

Basis Price

A method of pricing municipal bonds, T bills, and certain other instruments. It is an expression of yield to maturity.

Basis Rate Swap

A type of swap in which two parties swap variable interest rates based on different money markets. This is usually done to limit interest-rate risk that a company faces as a result of having differing lending and borrowing rates.

Basket Of Goods

A fixed set of consumer products and services valued and used on an annual basis to track inflation in a specific market or country. The goods in the basket are often adjusted periodically to account for changes in consumer habits The basket of goods is used primarily to calculate the Consumer Price Index (CPI).

Bear CD

A certificate of deposit whose interest rate fluctuates in inverse relationship to the value of an underlying index. Bear CDs are used either for hedging or speculation purposes. For example, if investor has long position in some security that is correlated with the market index, he could invest in bear certificate of deposit in order […]

Bear Flattener

A yield-rate environment in which short-term interest rates are increasing at a faster rate than long-term interest rates. This causes the yield curve to flatten as short-term and long-term rates start to converge.

Bear Market

An extended period of general price declines in an individual security or other asset, such as silver or real estate; a group of securities; or the securities market as a whole. Nevertheless, even during widespread bear markets, it is possible to have bull markets in particular stocks or groups of stocks. For example, stocks of […]

Bearer Stocks/Shares

Securities for which no register of ownership is kept by the company. A bearer certificate has an intrinsic value. Dividends are not received automatically from the company but must be claimed by removing and returning “coupons” attached to the certificate

Bearish Engulfing Pattern

A chart pattern consisted of small white candlestick with short shadows followed by large black candlestick that engulfs the small one. Bearish Engulfing Pattern is used as an indicator of possible bearish trend. On the other hand, it is very important not to take this pattern for granted. Make sure to think about any relevant […]

Bearish Harami

A technical analysis trend indicator that shows a trend reversal, change from bullish to bearish attitude. Bearish Harami is composed of large candlestick followed by smaller one whose body is positioned within the vertical range of the larger candlestick. When we see a small black candlestick, which follows a bull market confirmed by large white […]

Beating the Gun

A slang term used to describe the successful purchase or sell of an asset at a beneficial price, by using information before the market and other investors that are able to respond. The key moment for beating the gun is market timing, which enables professional and experienced investors to earn extra provisions on their investments.

Before the Bell

The time of day before the start of the regular trading day or before the opening bell. For the NYSE, this would be the time in the morning before 9:30 AM, which is the time when the open bell sounds and trading begins on the New York Stock Exchange.

Behavioral Finance

A theory stating that many investing decisions are dictated by psychological variables of investors and therefore makes the market unpredictable without cognition of human reactions to stock prices changes.

Bellwether

A stock or bond that represent overall market condition in general. In some opinions it can even foretell the whole market performance. It past years it was believed that GM stocks and bonds were US market trend indicators.