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

Category: T

TOO BIG TO FAIL

A financial institution that cannot fail without effecting the market. So they are granted help from central bank and possibly given bail out.

TRIPLE WITCHING HOUR

When futures, options, and equity settle on the same day. This happens once each quarter.

TEMPERATURE DERIVATIVE

A derivative effected by the temperature index.Payment is made based on temperature movement. It is traded on a seasonal basis. Refer to temperature linked bond.

TIER 2 CAPITAL

Additional capital acquired by a bank. Refer to economic capital and tier 1 capital.

TOTAL CONTROL

When company control is gained through ownership. It is common for family owned businesses. Refer to legal mechanism, majority, management, minority, and voting trust control.

TURKEY

A bad business move deal that once looked promising.

T TABLES

tables used to calculate finding for retirement benefits. Interest, as well as mortality rates, are factored in.

TENDER OFFER

A public offer to buy stock in a takeover effort. The offer is made at a premium to make the sale attractive. Refer to twotier bid, hostile takeover, friendly takeover, takeover, and

TIGHT MARKET

A liquid market with large volume, strong two way flows, and a small spread. Refer to thin market.

TRACKING ERROR

The difference between a portfolios actual performance and its target. Indexing is used to minimize error. AKA tracking risk.

TWININ BARRIER OPTION

An option created with a barrier is breached. Two additional barriers are added to make the option more expensive. Refer to Twin out barrier option and barrier option.

TAG ALONG RIGHTS

The right to protect minority interest in the event of a hostile takeover bid. If the bid passes the minority can join the majority. Refer to drag along rights.

TENDER PANEL

A syndicate of banks that sells notes for an issuer. They purchase the remaining unsold securities.

TIME DECAY

Daily change effecting the time value of a premium.

TRACKING STOCK

Stock with no voting or ownership rights. It is traded and priced independantly of a companies primary stock offerings..

TWINOUT BARRIER OPTION

A option that is ended when a barrier is breached. The addition of two options makes this option cheaper. Refer to barrier option and twin in barrier option.

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.

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