Financial Dictionary


U.S. Savings Bonds

Non-transferable and non-callable bonds issued by the US government and backed by its full faith and credit, which offer fixed interest rate over fixed period of time. Like Treasury bonds, US savings bonds are free from state and local tax, but earnings are due to federal taxes. However, federal taxes may be deferred until bonds […]

Ulcer Index

A technical analysis indicator used to measure risk and downward volatility involved in investments. Ulcer Index was created by Peter G. Martin in 1987 as a measure of risk in various contexts. Higher Ulcer index means that the security represents undue risk and when experiences a decline, it will have trouble to recover. Therefore, risk […]

Ultimate Oscillator

A technical analysis indicator, developed by Larry Williams in order to help investors notice buy and sell signals. Ultimate oscillator uses weighted average of three different overlapping time periods (usually 7, 14 and 28 days) and is expressed as percentage. Buy signals are emphasized when prices make new lows buy the oscillator does not or […]

Ultra Exchange Traded Funds

Funds that employ leverage in order to achieve double returns of a benchmark. For each 1% that index moves, Ultra ETF will move 2%. Ultra ETF can correlate with broad range of benchmarks, from S&P 500 to specific industrial sectors. In addition, Ultra ETFs cannot achieve double returns on flat markets and sometimes may produce […]


Refers to process of acquiring a company only because of one of its line of business. When unbundling, a company buys another company with many lines of business, which is to be sold while retaining only the most valuable line of business. Sold lines of business can be used to help fund the takeover.

Unconsolidated Subsidiary

A company that is owned by a parent company, but whose individual financial statements are not included in the consolidated or combined financial statements of the parent company to which it belongs. Instead, this type of company appears in the combined financial statement as an investment.

Uncovered Options

Option contracts (a call option written or a put option bought) where buyer or the seller has no underlying asset in his possession. Uncovered options are also called “naked options” and can provide both great returns and huge losses, depending on the direction the underlying asset has moved. Therefore, uncovered options are very risky and […]

Under Pricing

Refers to Initial Public Offering that is offered at price lower than its market value. IPOs are often underpriced because of uncertainty about the level at which the issue will trade. Issuers are constrained to sell the stock below its market value in order to encourage investors to enter the IPO, but stock will be […]


Refers to different securities in the case of derivatives and in the case of equities.Underlying in the case of derivatives (such as option) is the security, usually a stock, which must be delivered when the option contract is exercised. Underlying in the case of equities is the common stock that must be delivered when a […]

Underlying Bid

The bid or bids that are listed in the Level II Nasdaq market but are not the best (highest) bid price.


A company that administers the issuance and distribution of securities from the issuer. Underwriter is usually an investment bank that acts as an intermediary between the issuer and investors. Both the issuing company and underwriter determine the offering price of securities, than the underwriter buys the securities from the issuing body in order to sell […]

Underwriting Spread

Refers to the difference between the amount the underwriter pays to the issuing company and the amount he receives from selling the securities. Underwriting spread depends on negotiation abilities of the underwriter, his expectation of market demand for particular securities and risk involved in the issuance.

Unemployment Rate

The unemployment rate is basically the percentage of the people in the work force without jobs but is able and willing to work. It is measured by getting the ratio of unemployed people who are willing and able to work versus the total number of people in the work force. It is important to discern […]


At issuance, a “package” of securities, such as a bond and warrant, which become separable at a later date.

Unit Investment Trust

A registered investment company that purchases a fixed portfolio of income-producing securities in order to sell them to investors. Capital gains, interests and dividend payments are distributed to shareholders on regular time-basis. Unit Investment Trusts, in general, are considered low risk investments, but therefore offer low returns. Unlike mutual funds, these funds are not actively […]

Unit Trust

Similar to a mutual fund. A portfolio of securities, including mortgage-backed securities, offered by a brokerage or mutual fund.

United States debt-ceiling crisis

The United States debt-ceiling crisis was a financial crisis in 2011 that started as a debate in the United States Congress about increasing the debt ceiling. The immediate crisis ended when a complex deal was reached that raised the debt ceiling and reduced future government spending. However, similar debates are anticipated for the 2012 and […]


Refers to a company that operates without the use of borrowed money. By operating only by using assets in their possession, companies reduce the risk involved in their business. However, the negative side of unleveraged companies is reduced possibility of growth, which can be obtained by borrowing money and injecting it in the operations.

Unlisted Trading Privilege

The ability of an exchange to trade securities that are not listed on that exchange. These privileges are offered to member firms, but only after that exchange file an application with the Securities and Exchange Commission for approval.

Unqualified Opinion

An opinion given by the professional auditor if company’s financial conditions and operations are fairly presented in its financial statements and are in accordance with GAAP. Even if it sounds as a bad financial opinion, unqualified opinion is the best possible type of report a company may receive from professional auditor. Unqualified opinion is the […]

Unseasoned Issue

Refers to issue that has not been previously traded on the market. Because it just started trading and it has not established any trading patterns under different market conditions, investors are not sure how it will perform during difficult times on the open market.