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

Category: I

INCURRED LOSS

A loss that occured already that hasnt yet been paid. Also see ratio.

INFLATION

When currency loses its value due to constantly raising prices.

INTEREST RATE

The cost of borrowing funds or the capital earned on loaned funds.

INTRODUCING BROKER

A broker who helps their client with their strategy. They cannot hold funds to they use the FCM.

INFLATION SWAP

A swap of actual and fixed inflation rates. They mature in 10 or more years and are structured as annual inflation or a zero coupon inflation swap. Also called a consumer price

INFLATION-LINKED SECURITY

A bond that guarantees a return based on inflation. The coupon is the fixed rate and the principal adjusts according to the changing inflation rates. Refer to the terms ajustabonos and treasury

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.

INDEMNITY TRIGGER

An event that suspends coupon interest and principal when losses meet the agreed upon amount. This is also called an index or parametric trigger.

INITIAL PUBLIC OFFERING (IPO)

The first public offering of a companies stock in the market. A retail client will buy the stock and sell it to their customers. Refer to addon and rights issues.

INTERMARKET SPREAD

When two assets prices are averaged together to make the basic price more stable.

INDEX ARBITRAGE

When index futures are rich buyers keep stocks and sell the futures. When the futures are cheap they sell stock and buy the futures.

INSIDE DIRECTOR

A director of the board who is somehow related to the company they oversee. They are not independant voters as they have personal connections. Refer to outside director.

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