Category: R

a trust wherein the employee is not taxed because the plan’s assets can be claimed by creditors. This name is used because the first of these type of trusts was set up

Cancelling insurance due to fraud or misrepresentation.

Rebuying securities for cash value. Essentially money is borrowed, collateralized, and a repo rate is charged. AKA repo. Refer to dollar role, general collateral, gensaki, open repo, overnight repo, special, and term

The time a stock currency or commodity is held in order to produce profit when sold.

Named to illustrate an attempt of fleeing to Rio if this strategy fails, it is an attempt to reverse losses by executing a large and risky trade.

The attempt to reduce financial and operating risk by withdrawal from high risk ventures of risk pooling resulting in diversification. Refer to loss control and loss financing.

A securities order typically carrying lower returns or charges than odd lots that are traded in the standard size in accordance with the market.

A hostile buyer who tries to buy another company. They usually strip assets or get greenmail payments. This was common in the 1980s but there are still buyers like this out there.

Regrouping principal and interest after it has been stripped. This creates arbitrage opportunities. This happens when longterm securities are split into zero coupon bonds. Refer to stripping.

Renegotiating a loan with new terms that help the debtor avoid foreclosure. Refer to renegotiated loan.

A loan given to a municipalities project that is repaid by revenue from the project itself such as a toll road. Refer to general obligation bond.

A bullish signal shown by charting rising prices and an increasing support level. Refer to ascending top, descending bottom, and falling top.

Preserving a portion of financial and/or operating risk as opposed to transferring or hedging. Refer to hedging, retention, group, risk transfer, and selfinsurance.

When an exchange traded derivative is bought and sold quickly.

A financial professional who generates new business for an institution. This person is very successful in their area of trade.

When a portfolio is sold exposure is reduced to protect both parties. The cash settlement is paid and the derivatives are rewritten at current market levels. The process is repeated at the

Funds set aside to cover costs. They are established as contraacounts on a balance sheet. They can be hidden or implied for a security.

When a forward/future is purchased at a price less than the spot price plus the cost of carry and the difference is loaned until maturity creating a profit. Refer to cashandcarry arbitrage.

The attempt to profit by merger, acquisition, hostile takeover, recapitalization, spinoff, or other transactions based on the advice of a risk arbitrageur who analyzes future opportunities.

The spreading of exposure by combining firms with similar risk factors by risk pooling. Similar to group captive this is a retention vehicle.