One one-hundredth of one percentage point. Such a small measurement is especially helpful in expressing the often small but significant variations in bond yields. For example, the difference between a 12.83% yield and a 12.88% yield is 5 basis points.

For generations, bulls and bears on Wall Street have referred to two decidedly different types of investors - the bulls being those who expect stock prices to rise, the bears being those who believe prices are about to decline.

A term to describe a market of declining prices.

Collectively called the "quote," the bid refers to the highest price a buyer is willing to pay for a stock, while the asked is the lowest price a seller will accept.

A large holding or transaction of stock. Generally 10,000 or more shares or any quantity worth over $200,000 is considered a block.

A company known nationally for the quality of its products or services, its reliability, and its ability to operate profitably in good and bad economic times.

A popular name for various state laws enacted to protect the public against securities fraud. The term is believed to have originated when a judge ruled that a particular stock had about the same value as a patch of blue sky.

A debt secured by a specific asset of the issuing corporation.  The term bond, debenture and note are often used interchangeably.  All three represent debt obligations of the issuing entity.  The majority of these instruments are issued in multiples of  $1,000 face amounts at a specified coupon, or interest rate, with a set maturity date at which time the obligation must be repaid.  Many debt issues may be redeemed, or called, by the issuer prior to the maturity date if specified in the issue’s indenture.

A contract that gives the holder the right to buy the underlying stock at a specified price (the strike price) within a fixed period of time.

A callable bond may be redeemed, by the issuer, before the maturity date at a price at or above the par value of the issue.  An issuer’s ability to call a bond must be specified in the indenture (or contract terms) for the issue.  If a bond is callable it may be called only at specified times and prices.  Many callable bonds are issued with five or ten-year call protection, during which time, the issue may not be redeemed.  Calls may be for the entire outstanding amount of the issue or a portion of the outstanding amount.  See also Partial Call.

Profit earned on the sale of securities, either through dividends or by selling the securities at a higher price than they originally cost.

A transaction on the floor of the Stock Exchange that calls for delivery of the securities the same day. In regular stock trades, the seller is to deliver on the third business day. Bonds must be delivered on the next day after a trade.

Provides information on securities sales representatives and supervisory personnel. This data base is compiled from application forms, Exchange developed examinations, reported enforcement actions, and related information. The NASD owns the CRD system and its facilities, operating them on behalf of the NYSE, state regulators, and other users.

An agreement with a bank that you will leave your money on deposit for a specified period of time in return for a specific amount of interest.

Established in 1848, is a futures and options on futures exchange.

The largest futures exchange in the United States.  The CME offers futures and options on futures primarily in four product areas:  interest rates, stock indexes, foreign exchange and commodities.

A closed-end fund is one of three basic types of professionally managed investment companies along with open-end funds (more commonly known as mutual funds), and unit investment trusts. Closed-end funds have a fixed number of shares outstanding. Following an initial public offering, those shares trade throughout the day on an exchange between investors. Share prices are determined by the forces of supply and demand and can be more or less than the fund's net asset value (NAV). This differs from open-end funds, which continuously offer their shares to investors and whose share prices are based on their NAV, determined at the close of each business day.

The broker's basic fee for purchasing or selling securities as an agent.

Securities that represent an ownership interest in a corporation. If the company has also issued preferred stock, both common and preferred have ownership rights. Common stockholders assume the greater risk, but generally exercise the greater control and may gain the greater award in the form of dividends and capital appreciation. The terms common stock and capital stock are often used interchangeably when the company has no preferred stock.

A debt issue that may be exchanged, or converted, by the owner for a fixed number of common shares, or other securities, usually of the same company, in accordance with the terms of the issue. Companies also issue convertible preferred shares.

A debt security issued by a corporation.

The stated interest paid on a bond as a percent of its face amount (or par value).  A $1,000 bond with a coupon of 6%, pays $60 per year, usually in two payments of $30.

An option whose writer (seller) maintains the appropriate opposing position in the underlying security.

A stock having a provision that if one or more dividends are omitted, the omitted dividends must be paid before dividends may be paid on the company's common stock.

The interest paid on the bond as a percent of the current market price.  If, for example, a bond with a stated coupon interest of 7% (paying $70 per year on its $1,000 par value) has a current market price of 95, (95% of its par value) or $950, the current yield would be 7.4%.