Financial Dictionary

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Raider

A company or individual seeking for undervalued stocks, and then trying to hostile takeover the company by purchasing undervalued shares.

Rain Check

A term, originally from baseball, referring to a promise of the seller of some item, that the item is currently unavailable or out of stock, to the buyer to pay today’s price for later delivery when item is available

Rainmaker

A brokerage who creates a significant amount of business to the brokerage firm’s client base. Rainmaker also refers to the employee who creates business for the company, usually a well-connected manager in the company. Rainmakers are well awarded for their efforts.

Rally

A period of significant rise in the price of a security or a bond. Rallies are created due to substantial amount of money entering the market and enlarged trade scale. Rallies will be followed by a general decline in the price, when balance in that security or bond takes place. Rally can happen during both […]

Random Walk Theory

An investing theory created by Burton Malkiel, that states that stock prices do not follow any trends, but makes random ups and downs, which makes it impossible to predict the direction of any stock, and therefore, market as a whole. Follower of random walk theory believes that market cannot be outperformed without taking on additional […]

Rare Books

Investing in rare and antique books bears a close resemblance to other collectibles like guns, stamps, an violins. Likewise, this hard asset holds lucrative profit potential and is also nuanced with low-liquidity levels, which makes an investment in rare books appealing for those who are willing to do their homework and stomach the inherent risks. […]

Rate-Improvement Mortgage

A fixed rate mortgage provision that gives the one-time option to the borrower to reduce the interest rate on the mortgage without refinancing, but only once and early in the mortgage. Rate-Improvement Mortgage will usually have higher costs or higher initial interest rate, but when option is exercised, the borrower will actually save some money […]

Ratio Call Write

An option strategy, in which investor writes more “at the money” call options than the amount of underlying assets owned. If there is little volatility in the underlying stock, an investor will collect the premium from the sold options. However, if the price of underlying assets increases significantly, the trader will lose a lot of […]

Ratio Spread

An options investing technique (an options strategy) when investor holds an unequal number of long and short positions simultaneously. There is usually a common ratio of two shorts for every long position.

Reading the Tape

Refers to attempt to predict short term price changes by reading financial information from ticker tape, like volume and price information.

Reaganomics

A term referring to economic policies utilized during Ronald Reagan administration. Ronald Reagan deregulated domestic markets, called emphasized law-taxes and social service spending and increased military spending. Reaganomics was partially based on trickledown theory and supply-side economics principles, which are saying that best way to stimulate global economic growth. Reaganomics brought large budget deficits, low […]

Real Capital

Consisted of machineries and equipment that are used to produce goods from which the company expects returns. Real capital is not the same is financial capital, which appears on either the liabilities or the shareholders equity section on the balance sheet and is actually used to acquire real capital, which appears on the asset side […]

Real Estate Mortgage Investment Conduit (REMIC)

A pool of mortgage security that is divided into varying classes of securities with different risk rates and maturities. REMIC is a fixed pool that is broken apart in order to market every part as individual security to investors.

Real Estate Operating Company

A company that operates in the real estate niche, and whose shares are traded on exchanges. Real Estate Operating Company is similar to REIT, except REOC is a more flexible company when speaking of types of investments they make. In addition, Real Estate Operating Company will not distribute its earnings to its unit holders but […]

Real Gross Domestic Product

Gross Domestic Product = the value of all finished goods produced in national boundaries in one year which shows the national standard of living global country economic health. Real Gross Domestic Product is a GDP that is inflation adjusted and therefore provides more accurate figure because it reflects the price change. Real Gross Domestic Product […]

Rebate

In a short sale agreement it is a dividend or portion of interest earned by the lender, which are paid to the borrower of the shares. In such agreement, the rate at which the short seller will be compensated is usually negotiated. Rebate in an options transaction is the amount paid to the holder if […]

Recapture

A contract between the buyer and the seller, by which the seller of the asset has the right to repurchase a portion of sold assets, if agreed. Recapture is limited for only a certain period of time, which is specified in the contract. For example, if the seller of shares in not sure about the […]

Receivables Turnover Ratio

An accounting measure, an activity ratio that measures how effective a company is in using its assets. Receivables turnover ratio is calculated by dividing Net Credit Sales by Average Accounts Receivable. High Receivables turnover ratio tells us that there is efficient extension of credits, or the company is operating on a cash basis. Low receivables […]

Receive versus Payment

A clause that only cash will be accepted in exchange for the issued securities, because institutions are often required to accept cash only.

Record Date

The date when the company identifies its shareholders, or holders of records. The date is determined by the company in order to ensure that checks will be sent to right shareholders. Record Date is also called “Date of Record.”

Record High

Represents the highest historical price level that a security, commodity or index has reached during trading. Record highs are considered a significant identifier in a company future performance, because investors always watch closely to find companies that perform extraordinary well, hoping that the growth rate will remain the same.

Record Highs and Lows

Counts from the first day of trade, and are updated with every new high or low achieved. They are announced in nominal value, without inflation being accounted.

Record Low

Represents the lowest historical price level that a security, commodity or index has reached during trading. Record lows are considered a significant identifier in a company future performance because investors always watch closely to avoid investing in companies that continuously reach new record lows, even if some investors may be tempted to buy at such […]

Red Chip

A slang term that refers to a well standing, internationally incorporated Chinese company that is listed on the Hong Kong stock exchange. These stocks, also known as H-shares, are a main source for foreign investors who wish to participate in the fast growing China economy. Hang Seng China-Affiliated Corporations Index is compounded of 30 red […]