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

Category: Finance Dictionary

SHORT SQUEEZE

When a group or institution buy a portion of an asset to cause their prices to go up. This way the short position has to cover it. Refer to bear trap.

SOFTS

Perishable commodities and derivatives. Excluding grain, cotton, and orange juice.

STAGFLATION

When the economy is plagued by little to no growth, rising prices, and high unemployment.

STOP OUT PRICE

The selling in an auction market of government bills at the lowest acceptable price.

TERM LOAN

A loan that lasts between 1 and 10 years. It has a specific amount to be repaid on a schedule at floatin interest. Refer to theta and time decay.

TIME DEPOSIT

A deposit made by a bank to pay coupons. This is done until maturity when the funds can be accessed. Refer to lockup certificate of deposit, certificate of deposit, interbank deposit, and

TRANCHE

A portion of securities with a unique set of characteristics. They are used in securitization.

TWIST

Moving a yield curve up or down to adjust the value of a portfolio or a fixed income transaction. This is done using basis points to move the long and short term

VALUED CONTRACT

Insurance that pays out an agreed upon amount if loss should occur. Commonly life insurance. Refer to indemnity contract.

WEAK HANDS

A holder of a derivative contract that plans to close out before maturity. Retail investors are commonly weak hands. Refer to strong hands.

WORKING CAPITAL

The shortterm operating resources of a company. Refer to loan, gross working and net working capital.

INDICATIVE QUOTE

An offer given to a dealer that is uncertain. It is used as a guideline for future business offers.

INTENSITY MODEL

When a company estimates failure rate to predict default. Structural or markto market models are ways to do this.

JOURNALIZING

A double entry bookkeeping system of financial data pertaining to a specific transaction, in a journal usually taken from a journal voucher. Needed transaction data: (1) date done; (2) debit amount and

JUNK MAIL

Direct marketing or direct mail that is unsolicited. For introducing new products, books and magazines, investment opportunities, merchandise catalogs. It is a very big business in industrialized countries, specifically the US, UK,

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