a certificate of debt (usually interest-bearing or discounted) that is issued by a government or corporation in order to raise money; the issuer is required to pay a fixed sum annually until maturity and then a fixed sum to repay the principal
If a firm wants to borrow one million dollars for two years and agrees to pay 10% interest, it prepares bond certificates in advance.
call Options 94 The Price of Put Options 95 Markets for Trading in Gold Options 95 EARNING A PROFIT ON THE EXPIRATION DATE 96 WHERE OPTIONS COME FROM 96 AN OPTION WRITER’S PROFIT OR LOSS 97 Introduction 97 Profit 97 The Maximum Loss on a Call Option 97 The Maximum Loss on a put Option 97 A SHORT SUMMARY OF OPTIONS 98 INDEX OPTIONS 98 DATA REGARDING INDEX OPTIONS 99 Specifications Appearing in the Short Name of a DJX Option 100 The Strike Price 100 The Expiration Date 100 CLASSIFYING OPTIONS 101
an order to a broker to sell or buy stocks or commodities at the prevailing market price
Market Order 32 TYPES OF ORDERS WITH AN EXPIRY DATE 32 SHORT SELLING 33 How Short Selling Works 33 The Risks in Short Selling 34 THE TRADING SEQUENCE 35 Suspension of Trading 35 PRACTICAL TERMS 41 Market Capitalization (Market Cap) 41 Yield 41 Shareholders' Equity (Net Assets) 41 Stock Splits 42 DIVIDENDS 43 HOW TO PICK "GOOD" STOCKS 44 The P/E Ratio 45 Dividend Yield 46 THE STOCK INDICES 47 The Dow Jones Industrial Average (DJIA) 47 The S&P 500 47 The NASDAQ Composite Index 47 READING THE STOCK
the option to sell a given stock (or stock index or commodity future) at a given price before a given date
put Option 97 A SHORT SUMMARY OF OPTIONS 98 INDEX OPTIONS 98 DATA REGARDING INDEX OPTIONS 99 Specifications Appearing in the Short Name of a DJX Option 100 The Strike Price 100 The Expiration Date 100 CLASSIFYING OPTIONS 101 Class 101 Series 101 Level 101 MANAGEMENT OF OPTIONS TRADE 102 Options duration 102 THE CLASSES AND SERIES OF OPTIONS TRADING 102 Setting the Available Strike Prices 102 Adding new Strike Prices 103 FACTORS AFFECTING THE PRICE OF AN OPTION 104 Call Options 104 The Impact of
Voting Rights 21 Management Stock 21 RAISING CAPITAL 24 THE ANNUAL GENERAL SHAREHOLDERS MEETING AND THE ELECTION OF DIRECTORS 26 TRADING UNITS 28 BROKERS 29 TRADING STOCKS 30 BUY AND SELL ORDERS 31 TYPES OF ORDERS WITH RESPECT TO THE PRICE 31 LMT - Limit Order 31 MKT - Market Order 32 TYPES OF ORDERS WITH AN EXPIRY DATE 32 SHORT SELLING 33 How Short Selling Works 33 The Risks in Short Selling 34 THE TRADING SEQUENCE 35 Suspension of Trading 35 PRACTICAL TERMS 41 Market Capitalization (Market
a bond that can be converted to other securities under certain conditions
STOCKS 44 The P/E Ratio 45 Dividend Yield 46 THE STOCK INDICES 47 The Dow Jones Industrial Average (DJIA) 47 The S&P 500 47 The NASDAQ Composite Index 47 READING THE STOCK LISTINGS 48 CHAPTER 3 - BONDS 49 INTEREST 50 Factors Affecting the Interest Rate 51 Base Interest 51 BANK LOANS 52 PUBLIC LOANS 53 Buying Bonds 54 BOND PRICE 54 THE ANNUAL YIELD TO MATURITY 55 MAINTAINING THE VALUE OF MONEY 58 CONSUMER PRICE INDEX - CPI 58 TREASURY BONDS & NOTES 60 CORPORATE BOND RATINGS 61 CONVERTIBLE BONDS
an increase in the number of outstanding shares of a corporation without changing the shareholders' equity
41 Stock Splits 42 DIVIDENDS 43 HOW TO PICK "GOOD" STOCKS 44 The P/E Ratio 45 Dividend Yield 46 THE STOCK INDICES 47 The Dow Jones Industrial Average (DJIA) 47 The S&P 500 47 The NASDAQ Composite Index 47 READING THE STOCK LISTINGS 48 CHAPTER 3 - BONDS 49 INTEREST 50 Factors Affecting the Interest Rate 51 Base Interest 51 BANK LOANS 52 PUBLIC LOANS 53 Buying Bonds 54 BOND PRICE 54 THE ANNUAL YIELD TO MATURITY 55 MAINTAINING THE VALUE OF MONEY 58 CONSUMER PRICE INDEX - CPI 58 TREASURY BONDS
the letters used to identify listed companies on the securities exchanges where they are traded
12 BACKGROUND 12 CHAPTER 2 - STOCKS 13 ISSUING STOCKS 14 PAR VALUE (PV) 17 A STOCK'S NAME 17 Stock Symbol 18 STOCK PRICE 18 HOW IS PROFIT EARNED ON A STOCK?
the value of a security that is set by the company issuing it; unrelated to market value
12 BACKGROUND 12 CHAPTER 2 - STOCKS 13 ISSUING STOCKS 14 PAR VALUE (PV) 17 A STOCK'S NAME 17 Stock Symbol 18 STOCK PRICE 18 HOW IS PROFIT EARNED ON A STOCK?
sale of securities or commodity futures not owned by the seller (who hopes to buy them back later at a lower price)
SHORT SELLING 33 How Short Selling Works 33 The Risks in Short Selling 34 THE TRADING SEQUENCE 35 Suspension of Trading 35 PRACTICAL TERMS 41 Market Capitalization (Market Cap) 41 Yield 41 Shareholders' Equity (Net Assets) 41 Stock Splits 42 DIVIDENDS 43 HOW TO PICK "GOOD" STOCKS 44 The P/E Ratio 45 Dividend Yield 46 THE STOCK INDICES 47 The Dow Jones Industrial Average (DJIA) 47 The S&P 500 47 The NASDAQ Composite Index 47 READING THE STOCK LISTINGS 48 CHAPTER 3 - BONDS 49 INTEREST 50 Factors
43 HOW TO PICK "GOOD" STOCKS 44 The P/E Ratio 45 Dividend Yield 46 THE STOCK INDICES 47 The Dow Jones Industrial Average (DJIA) 47 The S&P 500 47 The NASDAQ Composite Index 47 READING THE STOCK LISTINGS 48 CHAPTER 3 - BONDS 49 INTEREST 50 Factors Affecting the Interest Rate 51 Base Interest 51 BANK LOANS 52 PUBLIC LOANS 53 Buying Bonds 54 BOND PRICE 54 THE ANNUAL YIELD TO MATURITY 55 MAINTAINING THE VALUE OF MONEY 58 CONSUMER PRICE INDEX - CPI 58 TREASURY BONDS & NOTES 60 CORPORATE BOND
an exchange where security trading is conducted by professional stockbrokers
Both Types of Options 105 TRADING IN INDEX OPTIONS 106 THE METHOD OF TRADING 107 Types of Orders 107 PRACTICAL TERMS 108 In the Money 108 At the Money 108 Out of the Money 108 USING PUT OPTIONS AS A HEDGE 109 HOW TO FOLLOW TRADING IN INDEX OPTIONS 112 USD-EURO OPTIONS 113 Specifications of USD-Euro Options 113 Abbreviated Option Name 113 Underlying Asset Price 113 Exercise Price 113 Premium 113 Uses of USD-Euro Options 114 CHAPTER 7 - NEW YORK STOCK EXCHANGE 115 THE AMERICAN SECURITIES MARKET
a regulated investment company that issues a fixed number of shares which are listed on a stock market
The following link refers to the stocks listed on “The Wall Street Journal” website: Closed-End Funds Chapter 6 - Options Introduction This chapter provides the reader with preliminary knowledge about stock market options.
an index of the cost of all goods and services to a typical consumer
41 Stock Splits 42 DIVIDENDS 43 HOW TO PICK "GOOD" STOCKS 44 The P/E Ratio 45 Dividend Yield 46 THE STOCK INDICES 47 The Dow Jones Industrial Average (DJIA) 47 The S&P 500 47 The NASDAQ Composite Index 47 READING THE STOCK LISTINGS 48 CHAPTER 3 - BONDS 49 INTEREST 50 Factors Affecting the Interest Rate 51 Base Interest 51 BANK LOANS 52 PUBLIC LOANS 53 Buying Bonds 54 BOND PRICE 54 THE ANNUAL YIELD TO MATURITY 55 MAINTAINING THE VALUE OF MONEY 58 CONSUMER PRICE INDEX - CPI 58 TREASURY BONDS
assets in the form of cash (or easily convertible into cash)
Current Assets: Inventory, cash and cash equivalents, and debts owed to the company by customers who purchased the company’s products, but have not yet paid for them.
Selling Price 81 Calculating the Purchase Price 81 Discount Sales 81 PROSPECTUS 83 SPECIALIZED FUNDS 83 CHAPTER 6 - OPTIONS 84 INTRODUCTION 85 WHAT IS AN OPTION 86 OPTIONS ON GOLD 86 A PURCHASE (CALL) OPTION 89 A SELL (PUT) OPTION 90 THE SPECIFICATIONS OF AN OPTION 93 THE NAME OF AN OPTION 93 A PRELIMINARY LOOK AT OPTIONS TRADING 94 The Price of call Options 94 The Price of Put Options 95 Markets for Trading in Gold Options 95 EARNING A PROFIT ON THE EXPIRATION DATE 96 WHERE OPTIONS COME FROM 96
SHAREHOLDERS MEETING AND THE ELECTION OF DIRECTORS 26 TRADING UNITS 28 BROKERS 29 TRADING STOCKS 30 BUY AND SELL ORDERS 31 TYPES OF ORDERS WITH RESPECT TO THE PRICE 31 LMT - Limit Order 31 MKT - Market Order 32 TYPES OF ORDERS WITH AN EXPIRY DATE 32 SHORT SELLING 33 How Short Selling Works 33 The Risks in Short Selling 34 THE TRADING SEQUENCE 35 Suspension of Trading 35 PRACTICAL TERMS 41 Market Capitalization (Market Cap) 41 Yield 41 Shareholders' Equity (Net Assets) 41 Stock Splits 42
the price at which something is actually purchased
Purchase Price 81 Discount Sales 81 PROSPECTUS 83 SPECIALIZED FUNDS 83 CHAPTER 6 - OPTIONS 84 INTRODUCTION 85 WHAT IS AN OPTION 86 OPTIONS ON GOLD 86 A PURCHASE (CALL) OPTION 89 A SELL (PUT) OPTION 90 THE SPECIFICATIONS OF AN OPTION 93 THE NAME OF AN OPTION 93 A PRELIMINARY LOOK AT OPTIONS TRADING 94 The Price of call Options 94 The Price of Put Options 95 Markets for Trading in Gold Options 95 EARNING A PROFIT ON THE EXPIRATION DATE 96 WHERE OPTIONS COME FROM 96 AN OPTION WRITER’S PROFIT OR
sale of securities or commodity futures not owned by the seller (who hopes to buy them back later at a lower price)
After the 1929 crash of the NYSE, it was regulated that a short sale cannot be carried out unless the price of the transaction preceding it is higher than was the case during the prior transaction.
an estimation of the value of a business that is obtained by multiplying the number of shares outstanding by the current price of a share
Market Capitalization (Market Cap) 41 Yield 41 Shareholders' Equity (Net Assets) 41 Stock Splits 42 DIVIDENDS 43 HOW TO PICK "GOOD" STOCKS 44 The P/E Ratio 45 Dividend Yield 46 THE STOCK INDICES 47 The Dow Jones Industrial Average (DJIA) 47 The S&P 500 47 The NASDAQ Composite Index 47 READING THE STOCK LISTINGS 48 CHAPTER 3 - BONDS 49 INTEREST 50 Factors Affecting the Interest Rate 51 Base Interest 51 BANK LOANS 52 PUBLIC LOANS 53 Buying Bonds 54 BOND PRICE 54 THE ANNUAL YIELD TO MATURITY 55
The three main stock exchanges in the US are the New York Stock Exchange (NYSE), the American Stock Exchange (AMEX) and the National Association of Securities Dealers Automated Quotations system (NASDAQ).
one of 12 regional banks that monitor and act as depositories for banks in their region
Base Interest The base interest is the interest rate charged by the US central bank, otherwise known as the Federal Reserve Bank, on loans to other banks (also called the discount rate).