Financial Dictionary

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Calendar Spread

An investment strategy which refers to purchasing and sale of put and call options with the same strike price but with different expiration dates. Also called a Horizontal Spread.

Call Date

The date on which and after which selected issues of Treasury bonds can be redeemed before maturity.

Call Loan

A loan used to finance the purchase of securities, and which may be terminated (called) at the discretion of the borrower or the lender on demand.

Call Option

An option contract that gives the holder the right, but not the obligation, to buy predetermined quantity (usually 100) of underlying securities from the writer of the option at predetermined price (strike price) before maturity date of the option. When market price of the underlying security is greater than the strike price determined in the […]

Call Protection

The degree of security that an investor has against a bond being redeemed. Practically, the number of years between today and the call date.

Call Spread

Client buys a call and sells a call on the same security but with different expiration dates, different exercise prices, or both.

Callable

A securities feature that allows the issuer to retire the issue when desired. Should the issue be called, the issuer usually pays a premium.

Callable Bond

A bond whose issuer reserves the right to redeem it before it is due. This feature represents a risk to the investor in that bonds are generally called when interest rates fall, and thus usually cannot be replaced with a similar yielding issue of the same quality.

Callable Stock

A stock which can be repurchased by the issuing company at a specific price. Callable stocks are often issued for subordinate company by the parent company.

Cambrist

Someone who is deemed to have above-average knowledge of the foreign exchange market. A cambrist can relate to anyone who deals with currencies and foreign exchange on a regular basis and is adept at recognizing factors and situations that affect foreign exchange. Foreign exchange traders often come to mind when discussing cambrists.

Candlestick

One of the most popular types of visual representation of daily performance of one particular security. A candlestick is configured of a body and a vertical line contained within the body. If a candlestick body is green (or white) colored, body top border represents closing price, and body bottom border represents opening price of the […]

Capital Appreciation

Refers to the increase in the value of an asset, such as mutual fund shares. Capital appreciation is often the investment objective of mutual funds that purchase securities whose value is expected to rise.

Capital Expenditure (CAPEX)

A capital investment in physical assets, building or equipment. This type of investment is made in order to improve production output, or to maintain current level of usability of some assets. Capital Expenditure, or CAPEX for short, differs between industries, for large manufacturing companies it can be big expense, but relative small for a company […]

Capital Gain

A trading profit. Trading gains that occur in one year or less are short-term capital gains; those that occur in periods longer than one year are long-term capital gains. Short-term and long-term capital gains are treated differently for tax purposes.

Capital Injection

A investment of capital generally in the form of cash or equity – and rarely, assets – into a company or institution. The word “injection” connotes that the company or institution into which capital is being invested may be floundering or in some distress, although it is not uncommon for the term to also refer […]

Capital Intensive

A business or an industry, that requires high level of financial resources to start up and maintain production chain. Oil refineries are a good example of capital intensive businesses.

Capital Rationing

The act of placing restrictions on the amount of new investments or projects undertaken by a company. This is accomplished by imposing a higher cost of capital for investment consideration or by setting a ceiling on the specific sections of the budget.

Capitalization

The total dollar value of all common stock, preferred stock, and bonds issued by a corporation.

Carry Trade

Basically, the concept revolves around a play on currency yields. It consists in borrowing a low-yielding currency and investing the amount in a currency that is offering a higher yield; the yield difference representing your gain (minus tax and commissions). An example of this could be to borrow 1,000 Yen and convert them into USD […]

Cartel

The group of producers who try to manipulate prices of goods or services by increasing or diminishing supplies. Also called a “trust” and is forbidden in the US.

Cash Account

An account at a brokerage firm that settles transactions on a cash basis and specifies that full settlement is due within three business days after a buy or sell order has been given to cover purchases.

Cash Dividend

Dividends that corporations pay on a per-share basis to stockholders from their earnings.

Cash Flow

Amount of total payments, interest and occasionally principal received as current income from Treasury and agency securities.