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- C
- C
- Fifth letter of a Nasdaq stock descriptor specifying that issue is exempt from Nasdaq listing requirements for a temporary period.
- CA
- The two-character ISO 3166 country code for CANADA.
- CAD
- The ISO 4217 currency code for Canada Dollar.
- CAMPS
- See: Cumulative Auction Market Preferred Stocks
- CAPM
- See: Capital asset pricing model
- CAPS
- See: Convertible adjustable preferred stock
- CARs
- See: Certificates of Automobile Receivables
- CARDs
- See: Certificates of Amortized Revolving Debt
- CATS
- See: Certificate of Accrual on Treasury Securities (CATS)
- CAX
- The ISO 4217 currency code for Canadian Cent.
- CBO
- See: Collateralized Bond Obligation.
- CBOE
- See: Chicago Board Options Exchange
- CC
- The two-character ISO 3166 country code for COCOS (KEELING) ISLANDS.
- CD
- See: Certificate of deposit
- CD
- The two-character ISO 3166 country code for CONGO, THE DEMOCRATIC REPUBLIC OF.
- CDN
- See: Canadian Dealing Network
- CEC
- See: Commodities Exchange Center
- CEG
- See: Canadian Exchange Group
- CF
- The two-character ISO 3166 country code for CENTRAL AFRICAN REPUBLIC.
- CFAT
- Cash flow after taxes.
- CFAT
- See: Cash flow after taxes
- CFC
- See: Controlled foreign corporation
- CFTC
- See: Commodity Futures Trading Commission
- CG
- The two-character ISO 3166 country code for CONG.
- CH
- The two-character ISO 3166 country code for SWITZERLAND.
- CHAP
- See: Clearing House Automated Payments System
- CHESS
- See: Clearing House Electronic Subregister System
- CHF
- The ISO 4217 currency code for Swiss Franc.
- CHIPS
- See: Clearing House Interbank Payments System
- CI
- The two-character ISO 3166 country code for COTE D'IVOIRE.
- CK
- The two-character ISO 3166 country code for COOK ISLANDS.
- CL
- The two-character ISO 3166 country code for CHILE.
- CLF
- The ISO 4217 currency code for Chile Unidades de Fomento.
- CLP
- The ISO 4217 currency code for Chilean Peso.
- CM
- The two-character ISO 3166 country code for CAMEROON.
- CMBS
- See: Commercial Mortgage Backed Securities
- CME
- See: Chicago Mercantile Exchange
- CML
- See: Capital market line
- CMO
- See: Collateralized mortgage obligation
- CN
- The two-character ISO 3166 country code for CHINA.
- CNY
- The ISO 4217 currency code for Chinese Renminbi (Yuan).
- CO
- The two-character ISO 3166 country code for COLOMBIA.
- COP
- The ISO 4217 currency code for Colombian Peso.
- CR
- The two-character ISO 3166 country code for COSTA RICA.
- CRC
- The ISO 4217 currency code for Costa Rican Colon.
- CTA
- See: Cumulative Translation Adjustment
- CU
- The two-character ISO 3166 country code for CUBA.
- CUP
- The ISO 4217 currency code for Cuban Peso.
- CUSIP
- See: Committee on Uniform Securities Identification Procedures
- CV
- The two-character ISO 3166 country code for CAPE VERDE.
- CVE
- The ISO 4217 currency code for Cape Verde Islands Escudo.
- CX
- The two-character ISO 3166 country code for CHRISTMAS ISLAND.
- CY
- The two-character ISO 3166 country code for CYPRUS.
- CYP
- The ISO 4217 currency code for Cyprus Pound.
- CZ
- The two-character ISO 3166 country code for CZECH REPUBLIC.
- CZK
- The ISO 4217 currency code for Czech Republic Koruna.
- Cabinet crowd
- NYSE members who trade bonds with a low daily traded volume. See: Automated Bond System.
- Cabinet security
- A stock or bond listed on a major exchange with low daily traded volume.
- Cable
- Exchange rate between British pound sterling and the U.S. dollar.
- CAC 40 index
- A broad-based index of common stocks composed of 40 of the 100 largest companies listed on the forward segment of the official list of the Paris Bourse.
- Cage
- A section of a brokerage firm used for receiving and disbursing funds.
- Calendar
- List of new issues scheduled to come to market shortly.
- Calendar effect
- Describes the tendency of stocks to perform
differently at different times, including performance anomalies like the January
effect, month-of-the-year effect, day-of-the-week effect, and holiday effect.
- Calendar spread
- Applies to derivative products. A strategy in which there is a simultaneous purchase and sale of options of the same class at different strike prices, but with the same expiration date.
- Call
- An option that gives the holder the right to buy the underlying futures contract.
- Call date
- A date before maturity, specified at issuance, when the issuer of a bond may retire part of the bond for a specified call price.
- Call feature
- Part of the indenture agreement between
the bond issuer
and buyer describing the schedule and price of redemption's
prior to maturity.
- Call loan
- A loan repayable on demand. Sometimes used as a synonym for broker loan or broker overnight loan.
- Call loan rate
- See: Call money rate
- Call money rate
- Also called the broker loan rate
, the interest rate that banks charge brokers
to finance margin loans to investors.
The broker charges the investor the call
money rate plus a service charge.
- Call option
- An option contract that gives its holder the right (but not the obligation) to purchase a specified number of shares of the underlying stock at the given strike price, on or before the expiration date of the contract.
- Call an option
- To exercise a call option.
- Call premium
- Premium in price above the par value of a bond or share of preferred stock that must be paid to holders to redeem the bond or share of preferred stock before its scheduled maturity date.
- Call price
- The price, specified at issuance, at which the issuer of a bond may retire part of the bond at a specified call date.
- Call protection
- A feature of some callable bonds that establishes an initial period when the bonds may not be called.
- Call provision
- An embedded option granting a bond issuer the right to buy back all or part of an issue prior to maturity.
- Call risk
- The combination of cash flow uncertainty and reinvestment risk introduced by a call provision.
- Call swaption
- A swaption in which the buyer has the right to enter into a swap as a fixed-rate payer. The writer therefore becomes the fixed-rate receiver/floating-rate payer.
- Callability
- Feature of a security that allows the issuer to redeem the security prior to maturity by calling it in, or forcing the holder to sell it back.
- Callable
- Applies mainly to convertible securities. Redeemable by the issuer before the scheduled maturity under specific conditions and at a stated price, which usually begins at a premium to par and declines annually. Bonds are usually called when interest rates fall so significantly that the issuer can save money by issuing new bonds at lower rates.
- Called away
- Convertible: Redeemed before maturity.
Option: Call or put option exercised against the stockholder.
Sale: Delivery required on a short sale.
- Cumulative Auction Market Preferred Stocks (CAMPS)
- Stands for Cumulative Auction Market Preferred Stocks, Oppenheimer & Company's Dutch Auction preferred stock product.
- Canadian agencies
- Agency banks established by Canadian Banks
in the US
- Canadian Dealing Network (CDN)
- The organized OTC market of Canada. Formerly known as the Canadian Over-the-Counter Automated Trading System (COATS), the CDN became a subsidiary of the Toronto Stock Exchange in 1991.
- Canadian Exchange Group (CEG)
- The CEG is an association among the Toronto Stock Exchange, the Montreal Exchange, the Vancouver Stock Exchange, the Alberta Stock Exchange, and the Winnipeg Stock Exchange for the purpose of providing Canadian market data to customers outside Canada.
- "Can get $xxx"
- Refers to over-the-counter trading. "I have a buyer who will pay $xxx
for the stock". Usually a standard markdown (1/8) from $xxx is applied
to this price in bidding the seller for its stock.
Antithesis of cost me.
- Cancel
- To void an order to buy or sell from (1) the floor, or (2) the trader/salesperson's scope. In Autex, the indication still remains on record as having once been placed unless it is expunged.
- "Cannot compete"
- In the context of general equities, cannot accommodate customers at that price level (i.e., compete with other market makers), often because there is no natural opposite side of the trade.
- "Cannot complete"
- In the context of general equities, inability to finish an order on a principal or agency basis, given prevailing price instructions and/or market conditions.
- Cap
- An upper limit on the interest rate on a floating-rate note (FRN) or an adjustable-rate mortgage (ARM).
- Capacity
- Credit grantors' measurement of a person's ability to repay loans.
- Capital
- Money invested in a firm.
- Capital account
- Net result of public and private international investment and lending activities.
- Capital allocation decision
- Allocation of invested funds between risk-free assets and the risky portfolio.
- Capital appreciation
- See: Capital growth
- Capital appreciation fund
- See: Aggressive growth fund
- Capital asset
- A long-term asset, such as land or a building, not purchased or sold in the normal course of business.
- Capital asset pricing model (CAPM)
- An economic theory that describes the relationship between risk and expected return, and serves as a model for the pricing of risky securities. The CAPM asserts that the only risk that is priced by rational investors is systematic risk, because that risk cannot be eliminated by diversification. The CAPM says that the expected return of a security or a portfolio is equal to the rate on a risk-free security plus a risk premium multiplied by the assets systematic risk. Theory was invented by William Sharpe (1964) and John Lintner (1965).
- Capital budget
- A firm's planned capital expenditures.
- Capital budgeting
- The process of choosing the firm's long-term capital assets.
- Capital Builder Account (CBA)
- A Merrill Lynch brokerage account that allows investors to access the loan value of his or her eligible securities to buy or sell securities. Excess cash in a CBA can be invested in a money market fund or an insured money market deposit account without losing access to the money.
- Capital expenditures
- Amount used during a particular period to acquire or improve long-term assets such as property, plant, or equipment.
- Capital flight
- The transfer of capital abroad in response to fears of political risk.
- Capital formation
- Expansion of capital or capital goods through savings, which leads to economic growth.
- Capital gain
- When a stock is sold for a profit, the capital gain is the difference between the net sales price of the securities and their net cost, or original basis. If a stock is sold below cost, the difference is a capital loss.
- Capital gains distribution
- A distribution to the shareholders of a mutual fund out of profits from selling stocks or bonds, that is subject to capital gains taxes for the shareholders.
- Capital gains tax
- The tax levied on profits from the sale of capital assets. A long-term capital gain, which is achieved once an asset is held for at least 12 months, is taxed at a maximum rate of 20% (taxpayers in 28% tax bracket) and 10% (taxpayers in 15% tax bracket). Assets held for less than 12 months are taxed at regular income tax levels, and, since January 1, 2000, assets held for at least five years are taxed at 18% and 8%.
- Capital gains yield
- The price change portion of a stock's return.
- Capital goods
- Goods used by firms to produce other goods, e.g., office buildings, machinery, equipment.
- Capital growth
- The increase in an asset's market price. Also called capital appreciation.
- Capital-intensive
- Used to describe industries that require large investments in capital assets to produce their goods, such as the automobile industry. These firms require large profit margins and/or low costs of borrowing to survive.
- Capital International Indexes
- Market indexes maintained by Morgan
Stanley that track major stock markets
worldwide.
- Capital investment
- See: Capital expenditure.
- Capital lease
- A lease obligation that has to be capitalized on the balance sheet.
- Capital loss
- The difference between the net cost of a security and the net sales price, if the security is sold at a loss.
- Capital market
- The market for trading long-term debt instruments (those that mature in more than one year).
- Capital market efficiency
- The degree to which the present asset price accurately reflects current
information in the market place. See: Efficient
market hypothesis.
- Capital market imperfections view
- The view that issuing debt is generally valuable, but that the firm's optimal choice of capital structure involves various other views of capital structure (net corporate/personal tax, agency cost, bankruptcy cost, and pecking order), that result from considerations of asymmetric information, asymmetric taxes, and transaction costs.
- Capital market line (CML)
- The line defined by every combination of the risk-free asset and the market portfolio. The line represents the risk premium you earn for taking on extra risk. Defined by the capital asset pricing model.
- Capital rationing
- Placing limits on the amount of new investment undertaken by a firm, either by using a higher cost of capital, or by setting a maximum on the entire capital budget or parts of it.
- Capital requirements
- Financing required for the operation of a business, composed of long-term and working capital plus fixed assets.
- Capital shares
- One of two types of shares in a dual-purpose investment company, which entitle the holder to the appreciation or depreciation in the value of a portfolio, as well as the gains from trading in the portfolio. Antithesis of income shares.
- Capital stock
- Stock authorized by a firm's charter and having par value, stated value, or no par value. The number and the value of issued shares are usually shown, together with the number of shares authorized, in the capital accounts section of the balance sheet. See: Common stock.
- Capital structure
- The makeup of the liabilities and stockholders' equity side of the balance sheet, especially the ratio of debt to equity and the mixture of short and long maturities.
- Capital surplus
- Amounts of directly contributed equity capital in excess of the par value.
- Capital turnover
- Calculated by dividing annual sales by average stockholder equity (net worth). The ratio indicates how much a company could grow its current capital investment level. Low capital turnover generally corresponds to high profit margins.
- Capitalization
- The debt and/or equity mix that funds a firm's assets.
- Capitalization method
- A method of constructing a replicating portfolio in which the manager purchases a number of the most highly capitalized names in the stock index in proportion to their capitalization.
- Capitalization rate
- The rate of interest used to calculate the present value of a number of future payments.
- Capitalization ratios
- Also called financial leverage ratios, these ratios compare debt to total capitalization and thus reflect the extent to which a corporation is trading on its equity. Capitalization ratios can be interpreted only in the context of the stability of industry and company earnings and cash flow.
- Capitalization table
- A table showing the capitalization of a firm, which typically includes the amount of capital obtained from each source - long-term debt and common equity - and the respective capitalization ratios.
- Capitalized
- Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year.
- Capitalized interest
- Interest that is not immediately expensed, but rather is considered as an asset and is then amortized through the income statement over time.
- Captive finance company
- A company, usually a subsidiary that is wholly owned, whose main function is financing consumer purchases from the parent company.
- Caput
- An exotic option. It represents a call option on a put option. That is, you
- Car
- A loose quantity term sometimes used to describe the amount of a commodity underlying one commodity contract; e.g., "a car of bellies." Derived from the fact that quantities of the product specified in a contract once corresponded closely to the capacity of a railroad car.
- Carrot equity
- British slang for an equity investment with the added benefit of an opportunity to purchase more equity if the company reaches certain financial goals.
- Carry
- Related: Net financing cost.
- Basel Accord
- Agreement concluded among country representatives in 1988 in Switzerland to develop standardized risk-based capital requirements for banks across countries.
- Carryforwards
- Tax losses allowed to be applied to offset future income in some specified number of future years.
- Carrying charge
- The fee a broker charges for carrying securities on credit, such as on a margin account.
- Carrying costs
- Costs that increase with increases in the level of investment in current assets.
- Carrying value
- Book value.
- Cartel
- A group of businesses or nations that act together as a single producer to obtain market control and to influence prices in their favor by limiting production of a product. The United States has laws prohibiting cartels.
- Cash
- The value of assets that can be converted into cash immediately, as reported by a company. Usually includes bank accounts and marketable securities, such as government bonds and banker's acceptances. Cash equivalents on balance sheets include securities that mature within 90 days (e.g., notes).
- Cash account
- A brokerage account that settles transactions on a cash-rather than credit-basis.
- Cash asset ratio
- Cash and marketable securities divided by current liabilities. See: Liquidity ratios.
- Cash basis
- Refers to the accounting method that recognizes revenues and expenses when cash is actually received or paid out.
- Cash and equivalents
- The value of assets that can be converted into cash immediately, as reported by a company. Usually includes bank accounts and marketable securities, such as government bonds and Banker's Acceptances. Cash equivalents on balance sheets include securities (e.g., notes) that mature within 90 days.
- Cash budget
- A forecasted summary of a firm's expected cash inflows and cash outflows as well as its expected cash and loan balances.
- Cash & carry
- Applies to derivative products. Combination of a long position in a stock/index/commodity and short position in the underlying futures, which entails a cost of carry on the long position.
- Cash commodity
- The actual physical commodity, as distinguished from a futures contract.
- Cash conversion cycle
- The length of time between a firm's purchase of inventory and the receipt of cash from accounts receivable.
- Cash cow
- A company that pays out most of its earnings per share to stockholders as dividends. Or, a company or division of a company that generates a steady and significant amount of free cash flow.
- Cash cycle
- In general, the time between cash disbursement and cash collection. In net working capital management, it can be thought of as the operating cycle less the accounts payable payment period.
- Cash deficiency agreement
- An agreement to invest cash in a project to the extent required to cover any cash deficiency the project may experience.
- Cash delivery
- The provision of some futures contracts that requires not delivery of underlying assets but settlement according to the cash value of the asset.
- Cash discount
- An incentive offered to purchasers of a firm's product for payment within a specified time period, such as ten days.
- Cash dividend
- A dividend paid in cash to a company's shareholders. The amount is normally based on profitability and is taxable as income. A cash distribution may include capital gains and return of capital in addition to the dividend.
- Cash earnings
- A firm's cash revenues less cash expenses, which excludes the costs of depreciation.
- Cash-equivalent items
- Examples include Treasury bills and Banker's Acceptances.
- Cash flow
- In investments, cash flow represents earnings before depreciation, amortization, and non-cash charges. Sometimes called cash earnings. Cash flow from operations (called funds from operations by real estate and other investment trusts) is important because it indicates the ability to pay dividends.
- Cash flow after interest and taxes
- Net income plus depreciation.
- Cash flow break-even point
- The point below which the firm will need either to obtain additional financing or to liquidate some of its assets to meet its fixed costs.
- Cash flow per common share
- Cash flow from operations minus preferred stock dividends, divided by the number of common shares outstanding.
- Cash flow coverage ratio
- The number of times that financial obligations (for interest, principal payments, preferred stock dividends, and rental payments) are covered by earnings before interest, taxes, rental payments, and depreciation.
- Cash flow matching
- Also called dedicating a portfolio, this is an alternative to multiperiod immunization that calls for the manager to match the maturity of each element in the liability stream, working backward from the last liability to assure all required cash flows.
- Cash flow from operations
- A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses that are deducted in calculating net income.
- Cash flow time line
- Line depicting the operating activities and cash flows for a firm over a particular period.
- Cash investments
- Short-term debt instruments—such as commercial paper, banker's acceptances, and Treasury bills—that mature in less than one year. Also known as money market instruments or cash reserves.
- Cash management
- Refers to the efficient management of cash in a business in order to put the cash to work more quickly and to keep the cash in applications that produce income, such as the use of lock boxes for payments.
- Cash management bill
- Very short-maturity bills that the Treasury occasionally sells because its cash balances are down and it needs money for a few days.
- Cash markets
- Also called spot markets, these are markets that involve the immediate delivery of a security or instrument. Related: Derivative markets.
- Cash offer
- Often used in risk arbitrage. Proposal, either hostile or friendly, to acquire a target company through the payment of cash for the stock of the target. Compare to exchange offer.
- Cash-on-cash return
- A method used to find the return on investments when there is no active secondary market. The yield is determined by dividing the annual cash income by the total investment. See: Current yield or yield to maturity.
- Cash on delivery (COD)
- In the context of securities, this refers to the practice of institutional investors paying the full purchase price for securities in cash.
- Cash plus convertible
- Convertible bond that requires cash payment upon conversion.
- Cash position
- The percentage of a mutual fund's
assets invested in short-term
reserves, such as US
Treasury bills or other money market
instruments.
- Cash price
- Applies to derivative products. See: Spot price.
- Cash ratio
- The proportion of a firm's assets held as cash.
- Cash reserves
- See: Cash investments
- Cash sale/settlement
- Transaction in which a contract
is settled on the same day as the trade date, or the next day if the trade occurs after 2:30 p.m. EST and the parties agree to this procedure. Often occurs because a party is strapped for cash and cannot wait until the regular five-business day settlement. See: Settlement date.
- Cash settlement contracts
- Futures contracts such as stock index futures that settle for cash and do not involve delivery of the underlying.
- Cash-surrender value
- The amount an insurance company will pay if the policyholder tenders or
cashes in a whole life insurance
policy.
- Cash transaction
- A transaction in which exchange is immediate in the form of cash, unlike a forward contract (which calls for future delivery of an asset at an agreed-upon price).
- Cashbook
- An accounting book that is composed of cash receipts plus disbursements. This balance is posted to the cash account in the ledger.
- Cashier's check
- A check drawn directly on a customer's account, making the bank the primary obligor, and assuring firms that the amount will be paid.
- Cashout
- Occurs when a firm runs out of cash and cannot readily sell marketable securities.
- Casualty-insurance
- Insurance protecting a firm or homeowner against loss of property, damage, and other liabilities.
- Casualty loss
- A financial loss caused by damage, destruction, or loss of property as a result of an unexpected or unusual event.
- Catastrophe call
- Early redemption of a municipal revenue bond because a catastrophe has destroyed the project that provided the revenue source backing the bond.
- Cats and dogs
- Speculative stocks with short histories of sales, earnings, and dividend payments.
- Caveat emptor, caveat subscriptor
- Latin expressions for "buyer beware" and "seller beware," which warn of overly risky, inadequately protected markets.
- CEDEL
- A centralized clearing system for Eurobonds.
- Ceiling
- The highest price, interest rate, or other numerical factor allowable in a financial transaction.
- Central bank
- A country's main bank whose responsibilities include the issue of currency, the administration of monetary policy, open market operations, and engaging in transactions designed to facilitate healthy business interactions. See: Federal Reserve System.
- Central Limit Theorem
- The Law of Large Numbers states that as a sample of independent,
identically distributed random numbers approaches infinity, its probability density function
approaches the normal distribution. See: Normal Distribution.
- Centralized cash flow management
- Provision of consolidated cash management decisions to all MNC units from one location, usually at the parent's headquarters.
- Cents per share
- The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned.
- Checkwriting
- Free checkwriting privileges offered with nonretirement accounts for select mutual funds.
- Certainty equivalent
- An amount that would be accepted today (risk free) in lieu of a chance to receive a possibly higher, but uncertain, amount.
- Certainty Equivalent
Return
- The certain (zero risk) return an investor would trade for a given (larger) return with an associated risk. For example, a particular
investor might trade an uncertain expected 4%
active return with 6% risk, for a certain active
return of 1.5%.
- Certificate
- A formal document used to record a fact and used as proof of the fact, such as stock certificates, that evidence ownership of stock in a corporation.
- Certificate of Accrual on Treasury Securities (CATS)
- Refers to a zero-coupon US Treasury issue
that is sold at a deep discount from the face
value and pays no coupon interest during
its lifetime, but returns the full face
value at maturity.
- Certificate of deposit (CD)
- Also called a time deposit this is a certificate issued by a bank or thrift that indicates a specified sum of money has been deposited. A CD has a maturity date and a specified interest rate, and can be issued in any denomination. The duration can be up to five years.
- Certificates of Amortized Revolving Debt (CARD)
- Pass-through securities backed by credit card receivables.
- Certificates of Automobile Receivables (CAR)
- Pass-through securities backed by automobile loan receivables.
- Certificateless municipals
- Municipal bonds with one certificate which is valid for the entire issue, and having no individual certificates, easing transactions. See: Book-entry securities.
- Certified check
- A bank guaranteed check for which funds are immediately withdrawn, and for which the bank is legally liable.
- Certified Financial Planner (CFP)
- A person who has passed examinations accredited by the Certified Financial Planner Board of Standards, showing that the person is able to manage a client's banking, estate, insurance, investment, and tax affairs.
- Certified financial statements
- Financial statements that include an accountant's opinion.
- Certified Public Accountant (CPA)
- An accountant who has met certain standards, including experience, age, and licensing, and passed exams in a particular state.
- Chair of the board
- Highest-ranking member of a Board of Directors, who presides over its meetings and who is often the most powerful officer of a corporation.
- Chaos
- A deterministic non-linear dynamic system that can produce random looking
results. A chaotic system must have a fractal dimension, and exhibit sensitive
dependence on initial conditions. See: Fractal Dimension, Lyapunov Exponent, Strange Attractor.
- Chapter 7 Proceedings
- Provisions of the Bankruptcy Reform
Act under which the debtor firm's assets
are liquidated by a court because reorganization
would fail to establish a profitable business.
- Chapter 11 Proceedings
- Provisions of the Bankruptcy Reform Act under which the debtor firm is reorganized by a court because the estimated value of the reorganized firm exceeds the expected proceeds from its liquidation.
- Changes in financial position
- Sources of funds provided from operations that alter a company's cash flow position: depreciation, deferred taxes, other sources, and capital expenditures.
- Characteristic line
- The market model applied to a single security; a regression of security returns on the benchmark return. The slope of the regression line is a security's beta.
- Characteristic portfolio
- A portfolio which efficiently
represents a particular asset characteristic. For a
given characteristic, it is the minimum risk portfolio, with portfolio characteristic equal to 1. For example, the
characteristic portfolio of asset betas is the benchmark. It is the minimum risk beta = 1
portfolio.
- Charge off
- See: Bad debt
- Charitable remainder trust
- An irrevocable trust that pays income to a designated person or persons until the grantor's death, when the income is passed on to a designated charity. A charitable lead trust by contrast allows the charity to receive income during the grantor's life, and the remaining income to pass to designated family members upon the grantor's death.
- Charter
- See: Articles of incorporation
- Chartered Financial Analyst (CFA)
- An experienced financial analyst who has passed examinations in economics, financial accounting, portfolio management, security analysis, and standards of conduct given by the institute of Chartered Financial Analysts.
- Chartists
- A technical analyst who charts the patterns of stocks, bonds, and commodities to find trends in patterns of trading used to advise clients. Related: Technical analysts.
- Chasing the market
- Purchasing a security at a higher price than expected because prices are rapidly climbing, or selling a security at a lower level when prices are quickly falling.
- Chastity bonds
- Bonds redeemable at par value in the case of a takeover.
- Chatter
- See: Whipsawed
- Chattel Mortgage
- A loan agreement that grants to the lender a lien on property other than real estate. Chattel is personal or movable property.
- Cheapest to deliver issue
- The acceptable Treasury security with the highest implied repo rate; the rate that a seller of a futures contract can earn by buying an issue and then delivering it at the settlement date.
- Check
- A bill of exchange representing a draft on a bank from deposited funds that pays a certain sum of money to a certain person or party.
- Checking the market
- Searching for bid and offer prices from market makers to find the best deal.
- Chicago Board Options Exchange (CBOE)
- A securities exchange created in the
early 1970s for the public trading of standardized option
contracts. Primary place stock
options,
foreign currency options, and index
options (S&P 100, 500, and OTC 250
index)
- Chicago Board of Trade (CBOT)
- The largest futures exchange
in the US, and was a pioneer in the development of financial futures
and options.
- Chicago Mercantile Exchange (CME)
- A not-for-profit corporation owned by its members. Its primary functions
are to provide a location for trading futures
and options, to collect and disseminate market
information, to maintain a clearing mechanism, and to enforce trading rules.
Applies to derivative products. Primary place futures
(OTC 250 industrial stock
price index, S& P 100 and 500 index) and futures
options (S&P
500 stock index) are traded.
- Chicago Stock Exchange (CHX)
- A major exchange trading only stocks, with 90% of trades taking place on an automated execution system, called MAX.
- Chief Executive Officer (CEO)
- A title held often by the Chairperson of the Board, or the president. The person principally responsible for the activities of a company.
- Chief Financial Officer (CFO)
- The officer of a firm is responsible for handling the financial affairs of a company.
- Chief Operating Officer (COO)
- The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president.
- Chinese hedge
- Applies mainly to convertible securities. Trading
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Financial Glossary