Your Free Online Legal Dictionary • Featuring Black’s Law Dictionary, 2nd Ed.

Category: Finance Dictionary

SPREAD

A strategy whereby several financial factors combine to expose or protect the price of a commodity. Refer to bull spread, bear spread, effective spread, quoted spread, and realized spread.

STANDSTILL AGREEMENT

A contract where additional shares of a target will not be purchased by a raider or acquiring firm until a mutual agreement can be accomplished.

SWINGLINE

Short term back up credit given to a borrower as needed. They are used when commercial paper issuers when investors won’t roll over maturing paper. AKA backup line.

TAP ISSUE

UK government bills sold to their own entities. No gilt edge market makers are used.

THIN MARKET

A market that is illiquid. It has low volume, high spreads, and high volatility. Refer to tight market.

TREYNOR INDEX

Comparing the risk premium and risk of a portfolio. It uses the security market line as the benchmark.

UNDERBANKED

A new issue with little interest in it. The price and deal terms must be changed in order to change this.

UP AND OUT OPTION

An option that ends an european option if the price goes beyond a barrier. If the barrier is not crossed the european option is safe. Refer to down and in, down and

VISIBLE

Any good brought into or shipped out of a country. A key element in balance of trade or balance of payment accounts. Refer to invisible.

WHISPER STOCK

Stock of a target company of hostile takeover. Price and volume will be erratic due to the rumor.

ZAITECH

The final speculation of a japanese company to boost nonoperating income.

INDEMNITY CONTRACT

A contract that repays the insurer losses back to them. Also called indemnity, or valued contract.

INITIAL MARGIN

Security paid to protect a clearinghouse and to support loans. Refer to clearing, variation, and maintenance margin.

INTERLOCKING DIRECTORSHIP

When executives sit on eachothers boards. They are considered independant. Refer to filz and interlocking directorate.

JOBBING

Constantly buying assets to boost profits.

JUNIOR CAPITAL POOL (JCP)

This practice, only regulated in Canada, is for a company issuing stock options instead of being an operational business structure.

JUST IN TIME MANUFACTURING

For quicker response to customer needs with no large finished goods or goods-in-process inventories, JIT inventory system is applied to production lines.

KELVIN (K)

Irish physicist William Thomson (1824-1907),honored as 1st Baron Kelvin (Lord William Kelvin), developed this scale. Temperature scale beginning at absolute zero (273.15

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