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- D
- D
- Fifth letter of a NASDAQ stock symbol specifying that it is a new issue, such as the result of a reverse split.
- DCF
- See: Discounted Cash Flows
- DDM
- The ISO 4217 currency code for East Germany Ostmark.
- DE
- The two-character ISO 3166 country code for GERMANY.
- DEM
- The ISO 4217 currency code for Deutschemark.
- DDM
- See: Discounted Dividend Model
- DISC
- See: Domestic International Sales Corporation
- DJ
- The two-character ISO 3166 country code for DJIBOUTI.
- DJF
- The ISO 4217 currency code for Djibouti Franc.
- DK
- The two-character ISO 3166 country code for DENMARK.
- DKK
- The ISO 4217 currency code for Danish Krone.
- DM
- The two-character ISO 3166 country code for DOMINICA.
- DNR Order
- See: Do Not Reduce Order
- DO
- The two-character ISO 3166 country code for DOMINICAN REPUBLIC.
- DOP
- The ISO 4217 currency code for Dominican Republic Peso.
- DOT
- See: Designated Order Turnaround System
- DRP
- See: Dividend Reinvestment Plan
- DTC
- See: Depository Transfer Check
- DTC
- See: Depository Trust Company
- DZ
- The two-character ISO 3166 country code for ALGERIA.
- DZD
- The ISO 4217 currency code for Algerian Dinar.
- Daily price limit
- The level at which many commodity, futures, and options markets are allowed to rise or fall in a day. Exchanges usually impose a daily price limit on each contract.
- Daisy chain
- Manipulation of the market by traders to create the illusion of active volume to attract investors.
- Date of issue
- Used in the context of bonds to refer to the date on which a bond is issued and when interest accrues to the bondholder. Used in the context of stocks to refer to the date trading begins on a new stock issued to the public.
- Date of payment
- Date dividend checks are mailed.
- Date of record
- Date on which holders of record in a firm's stock ledger are designated as the recipients of either dividends or stock rights.
- Dated date
- The date one uses to calculate accrued interest on various debt instruments, specifically bonds.
- Dates convention
- Treating cash flows as being received on exact dates-date 0, date 1, and so forth-as opposed to the end-of-year convention.
- Dating
- Credit extension beyond normal terms of a credit supplier.
- Dawn raid
- A term of British origin used to describe the purchase of all available shares of a target company at the market's open by a raider. A dawn raid is a surprise technique that allows the raider to gain a substantial share of the target company before the target company knows what is happening
- Day around order
- A day order that supersedes (cancels and replaces) the previous order by altering its size or price limit.
- Day of deposit to day of withdrawal account
- A bank account that pays interest according to the number of days that the money is actually on deposit.
- Day loan
- A loan from a bank to a broker prior to the delivery of securities. Upon the delivery of the securities, a day loan becomes a regular broker call loan for which securities serve as collateral.
- Day order
- In the context of general equities, request from a customer to either buy
or sell stock, that, if not canceled or executed
the day it is placed, expires automatically. All orders are day orders unless
otherwise specified. Traders often make
calls before the opening to check for renewals.
- Day trading
- Establishing and liquidating the same position or positions within one day's trading.
- Days in receivables
- Average collection period.
- Days' sales in inventory ratio
- The average number of days' worth of sales that is held in inventory.
- Days' sales outstanding
- Average collection period.
- De facto
- Existing in actual fact although not by official recognition.
- Dead cat bounce
- A small upmove in a bear market.
- Deal flow
- In investment banking, the rate at which new deals are referred to a brokerage firm.
- Deal stock
- Stock subject to merger or acquisition, either publicly announced or rumored.
- Dealing desk (Trading desk)
- Personnel at an international bank who trade spot
and forward foreign exchange.
- Dealer
- An entity that stands ready and willing to buy a security for its own account (at its bid price) or sell from its own account (at its ask price). Individual or firm acting as a principal in a securities transaction. Principals are market makers in securities, and thus trade for their own account and risk. Antithesis of broker. See: Agency.
- Dealer loan
- Overnight, collateralized loan from a money market bank made to a dealer financing his position by borrowing.
- Dealer market
- Where trader's specializing in particular
commodities buy
and sell assets for their own accounts.
- Dealer options
- Over-the-counter options, such as those offered by government and mortgage-backed securities dealers.
- Dealer's spread
- See: markdown; underwriting spread.
- Dear money
- British term for tight money.
- Death-backed bonds
- Bonds backed by loans of a policyholder against a life insurance policy. The policyholder will repay the loans while alive or with the benefits from the insurance policy upon death.
- Death play
- A stock strategy that buys stock on the belief that a key executive will die, the company will be dissolved, and shares will command a higher price at their private market value.
- Death Valley Curve
- In venture capital, refers to the period before a new company starts generating revenues, when it is difficult for the company to raise money.
- Debenture
- Any debt obligation backed strictly by the borrower's integrity, e.g. an unsecured bond. A debenture is documented in an indenture.
- Debenture bond
- An unsecured bond whose holder has the claim of a general creditor on all assets of the issuer not pledged specifically to secure other debt. Compare subordinated debenture bond and collateral trust bonds.
- Debenture stock
- A type of stock that makes fixed payments at scheduled intervals of time. Debenture stock differs from a debenture in that it has the status of equity, not debt, in liquidation.
- Debit balance
- The amount that is owed to a broker by a margin customer for loans the customer uses to buy securities.
- Debit spread
- Applies to derivative products. Difference in the value of two options, when the value of the option bought exceeds the value of the one sold. One buys a "debit spread." Antithesis of a credit spread.
- Debt
- Money borrowed.
- Debt bomb
- A default on debt and obligations by a major financial institution that disrupts the stability of the economic system.
- Debt capacity
- Ability to borrow. The amount a firm can borrow up to the point where the firm value no longer increases.
- Debt ceiling
- See: Debt limit
- Debt displacement
- The amount of borrowing that leasing displaces. Firms that do a lot of leasing are curtailed in their debt capacity.
- Debt/equity ratio
- Indicator of financial leverage. Compares assets provided by creditors to assets provided by shareholders. Determined by dividing long-term debt by common stockholder equity.
- Debt-for-equity swap
- A swap agreement to exchange equity/returns
for debt returns or the converse over a prearranged length of time.
- Debt instrument
- An asset requiring fixed dollar payments, such as a government or corporate bond.
- Debt leverage
- Amplification of the return earned on equity when an investment or firm is financed partially with borrowed money.
- Debt limit
- The maximum amount that a municipality can borrow.
- Debt limitation
- A bond covenant that restricts the firm's ability to incur additional indebtedness in some way.
- Debt market
- The market for trading debt instruments.
- Debt outstanding
subject to limitation
- Obligations incurred by the Treasury subject to the statutory limit set by
Congress. Until World War 1, a specific amount of debt was authorized for each separate
security issue. Beginning with the Second Liberty
Loan Act of 1917, the nature of the limitation was modified until, in 1941, it developed
into an overall limit on the outstanding Federal debt. As of March 1999, the debt limit
was $5,950,000 million; the limit may change from year to year.
The debt subject to limitation includes most of the Treasury's public debt except securities issued to the Federal Financing
Bank, upon which there is a limitation of $15 billion, and certain categories of older debt (totaling approximately $595 million as of
February 1991).
- Debt ratio
- Total debt divided by total assets.
- Debt relief
- Reducing the principal and/or interest payments on Less developed country loans.
- Debt retirement
- The complete repayment of debt. See: Sinking fund.
- Debt securities
- IOUs created through loan-type transactions-commercial paper, bank CDs, bills, bonds, and other instruments.
- Debt service
- Interest payment plus repayments of principal to creditors (retirement of debt).
- Debt service coverage
- The ratio of cash flow available to the borrower to the annual interest and principal payments on a loan or other debt.
- Debt-service coverage ratio
- Earnings before interest and income taxes, divided by interest expense plus the quantity of principal repayments divided by one minus the tax rate.
- Debt service parity approach
- Payment alternatives that provide the firm with the exact same schedule of after-tax debt payments (including both interest and principal).
- Debt swap
- A set of transactions in which a firm buys a country's dollar bank debt at a discount and swaps this debt with the central bank for local currency that it can use to acquire local equity. Also called a debt-equity swap.
- Debtholder
- See: Bondholder
- Debtor
- Borrower of money.
- Debtor in possession
- A firm that continues to operate under the Chapter 11 bankruptcy process.
- Debtor-in-possession financing
- New debt obtained by a firm during the Chapter 11 bankruptcy process.
- Decile rank
- Performance over time, rated on a scale of 1-10. 1 indicates that a mutual fund's return is in the top 10% of funds being compared; while 3 means the return is in the top 30%.
- Decimal trading
- The quotation and trading of stock or bond prices in decimals, as opposed to the quotation of in fractions.
- Decimalization
- The quotation and trading of stock or bond prices in decimals, as opposed to fractions such as eighths.
- Decision Break-Point
Analysis
- A type of sensitivity analysis that indicates the value at which a key variable will result in a negative NPV for an investment project.
- Decision tree
- Schematic way of representing alternative sequential decisions and the possible outcomes from these decisions.
- Declaration date
- The date on which a firm's directors meet and announce the date and amount of the next dividend.
- Declare
- The Board of Directors motion to authorize dividend payments.
- Dedicated capital
- Total par value (number of shares issued, multiplied by the par value of each share). Also called dedicated value.
- Dedicating a portfolio
- Related: Cash flow matching
- Dedication strategy
- Refers to multiperiod cash-flow matching.
- Deductible contribution
- Amount paid into an IRA, an employer-sponsored
retirement plan, or other type of retirement plan for a particular tax year that is a
deduction from income for tax purposes.
- Deduction
- An expense that is allowable as a reduction of gross taxable income by the IRS e.g., charity donations.
- Deductive reasoning
- Using known fact to draw a conclusion about a specific situation.
- Deed of trust
- See: Indenture
- Deep-discount bond
- A bond issued with a very low coupon or no coupon that sell at a price far below par value. A bond that has no coupon is called a zero-coupon bond.
- Deep in/out of the money
- A call option with an exercise price substantially below the underlying stock's market price (deep in the money) or substantially above the market price (deep out of the money). Also put option with an exercise price substantially above the underlying stock's market price (deep in the money) or substantially below the underlying stock's market price (deep out of the money).
- Default
- Failure to make timely payment of interest or principal on a debt security or to otherwise comply with the provisions of a bond indenture.
- Default premium
- A differential in promised yield that compensates the investor for the risk inherent in purchasing a corporate bond that entails some risk of default.
- Default risk
- The risk that an issuer of a bond may be unable to make timely principal and interest payments. Also referred to as credit risk (as gauged by commercial rating companies).
- Defeasance
- The setting aside by a borrower of cash or bonds sufficient to service the borrower's debt. Both the borrower's debt and the offsetting cash or bonds are removed from the balance sheet.
- Defensive securities
- Low-risk stocks or bonds that will provide a predictable and safe return on an investor's money.
- Deferred account
- A type of account that delays taxes on that account until some later date.
- Deferred annuities
- Tax-advantaged life insurance products. Deferred
annuities offer deferral of taxes with
the option of withdrawing one's funds in the form of life annuity.
- Deferred call
- A provision that prohibits the company from calling the bond before a certain date. During this period the bond is said to be call protected.
- Deferred charge
- An expenditure treated as an asset that carries forward until it becomes pertinent to the business at hand, e.g., advance rent payment.
- Deferred compensation
- An amount that has been earned but is not actually paid until a later date, typically through a payment plan, pension, or stock option plan.
- Deferred equity
- A common term for convertible bonds, which recognizes their equity component and the expectation that the bond will ultimately be converted into shares of common stock.
- Deferred futures
- The most distant months of a futures contract.
- Deferred interest bond
- A bond that pays interest at a later date, usually in one lump sum, effectively reinvesting interest earned over the life of the bond. See: Zero coupon bond.
- Deferred nominal life Annuity
- A monthly fixed-dollar payment beginning at retirement age. It is nominal because the payment is fixed in a dollar amount at any particular time, up to and including retirement.
- Deferred payment annuity
- An annuity that stipulates payments be made to the annuitant at a later date, such as when the annuitant reaches a certain age.
- Deferred taxes
- A non-cash expense that provides a source of free cash flow. Amount allocated during the period to cover tax liabilities that have not yet been paid.
- Deficiency letter
- Notification from the SEC to a prospective issuer of securities that revisions or additions need to be made to the preliminary prospectus.
- Deficit
- An excess of liabilities over assets, of losses over profits, or of expenditure over income.
- Deficit spending
- When government spending overwhelms government revenue resulting in government borrowing.
- Defined asset fund
- A unit investment trust consisting of a fixed portfolio of securities, including blue chips, REITs, or high-yielding stocks on a major exchange such as the NYSE or FTSE.
- Defined benefit plan
- A pension plan obliging the sponsor to make specified dollar payments to qualifying employees. The pension obligations are effectively the debt obligation of the plan sponsor. Related: Defined contribution plan
- Defined contribution plan
- A pension plan whose sponsor
is responsible only for making specified contributions into the plan on behalf
of qualifying participants. Related: Defined
benefit plan
- Deflation
- Decline in the prices of goods and services. Antithesis of inflation.
- Deflator
- A statistical factor used to convert current dollar purchasing power into inflation-adjusted purchasing power. Enabling the comparison of prices while accounting for inflation in two different time periods.
- Delayed issuance pool
- Refers to mortgage backed securities (MBS) that at the time of issuance were collateralized by seasoned loans originated prior to the MBS pool issue date.
- Delayed opening
- Postponement of the start of trading in a stock until correction of a gross imbalance in buy and sell orders. Such an imbalance is likely to follow on the heels of a significant event such as a takeover offer. See: Suspended trading.
- Delayed settlement/delivery
- In the context of general equities, transaction in which a contract is settled in excess of five full business days. Seller's option. See: Dividend play, settlement.
- Delinquency
- Failure to make a payment on a debt or obligation by the specified due date.
- Delisting
- Removal of a company's security from listing on an exchange because the firm has not abided by specific regulations.
- Deliver
- The sale of a futures or forward contract may require the seller to deliver the commodity.
- Deliverable bills
- The Treasury bills that fulfill a set of guidelines set forth by the exchange on which the bills are traded.
- Deliverable instrument
- The asset in a forward contract that will be delivered in the future at an agreed-upon price.
- Delivery
- The tender and receipt of an actual commodity or financial instrument in settlement of a futures contract.
- Delivery date
- Date by which a seller must fulfill the obligations of a forward or futures contract.
- Delivery notice
- The written notice given by the seller of its intention to make delivery against an open, short futures position on a particular date. Related: Notice day.
- Delivery options
- The options available to the seller of an interest rate futures contract, including the quality option, the timing option, and the wild card option. Delivery options mean that the buyer is uncertain of which Treasury bond will be delivered or when it will be delivered.
- Delivery points
- Locations designated by futures exchanges
at which the financial instrument or
commodity covered by a futures
contract may be delivered in fulfillment of such a contract.
- Delivery price
- The price fixed by the clearinghouse at which deliveries on futures are invoiced; also the price at which the futures contract is settled when deliveries are made.
- Delivery versus payment
- A transaction in which the buyer's payment for securities is due at the time of delivery (usually to a bank acting as agent for the buyer) upon receipt of the securities. The payment may be made by bank wire, check, or direct credit to an account.
- Delta
- The ratio of the change in price of a call option to the change in price of the underlying stock. Also called the hedge ratio. Applies to derivative products. Measure of the relationship between an option price and the underlying futures contract or stock price. For a call option, a delta of 0.50 means a half-point rise in premium for every dollar that the stock goes up. As options near expiration, in-the-money call option contracts approach a delta of 1.0, while in the money put options approach a delta of -1. See: hedge ratio, neutral hedge.
- Delta cross-hedge
- A futures hedge that has both maturity and currency mismatches with an underlying exposure.
- Delta hedge
- A dynamic hedging strategy using options that calls for constant adjustment of the number of options used, as a function of the delta of the option.
- Delta neutral
- Describes value of a portfolio not affected by changes in the value of the asset on which the options are written.
- Demand deposits
- Checking accounts that pay no interest and from which funds can be withdrawn upon demand.
- Demand line of credit
- A bank line of credit that enables a customer to borrow on a daily or on-demand basis.
- Demand loan
- A loan which can be called by the lender at any time and carries no set maturity date.
- Demand master notes
- Short-term securities that are repayable immediately upon the holder's demand.
- Demand-pull inflation
- A theory of inflation or price increases resulting from so-called excess demand. Related: Cost-push inflation.
- Demand shock
- An event that affects the demand for goods and services in an economy.
- Denomination
- Corresponds to the face value of currency units, coins, and securities.
- Dependent
- Acceptance of a capital budgeting project contingent on the acceptance of another project.
- Deposit insurance
- See: FDIC: Federal Deposit Insurance Corporation
- Depository Institutions Deregulation and Monetary Control Act
- The 1980 federal legislation that ended the regulation of the banking industry.
- Depository preferred
- Device enabling an issuer to circumvent an arbitrary corporate limit on the number of preferred shares issuable. Applies mainly to convertible securities.
- Depository receipt
- See: ADR American Depository Receipt
- Depository transfer check (DTC)
- Check made out directly by a local bank to a particular firm or person.
- Depository Trust Company (DTC)
- DTC is a user-owned securities depository that accepts deposits of eligible securities for custody, executes book-entry deliveries and records book-entry pledges of securities in its custody, and provides for withdrawals of securities from its custody. Central securities repository where stock and bond certificates are exchanged. Most of these exchanges now take place electronically, and few paper certificates actually change hands. The DTC is a member of the Federal Reserve System and is owned by most of the brokerage houses on Wall Street and the NYSE
- Depreciate
- To allocate the purchase cost of an asset over its life.
- Depreciated cost
- In terms of economics: The measure of cost of capital consumption during production, e.g., machine and equipment wear.
In terms of finance: The process of amortization of fixed assets (equipment) to spread the cost over the depreciable life of the assets.
- Depreciation
- A non-cash expense that provides a source of free cash flow. Amount allocated during the period to amortize the cost of acquiring long-term assets over the useful life of the assets.
- Depreciation tax shield
- The value of the tax write-off on depreciation of plant and equipment.
- Depressed market
- Market in which supply overwhelms demand, leading to weak and lower prices.
- Depressed price
- In the context of stocks, stock whose market price is low in comparison to stocks in its sector.
- Depression
- Period when excess aggregate supply overwhelms aggregate demand, resulting in falling prices, unemployment problems, and economic contraction.
- Deregulation
- The reduction of government's role in controlling markets, which lead to freer markets, and presumably a more efficient marketplace.
- Derivative
- A financial contract whose value is based on, or "derived" from,
a traditional security (such as a stock or bond),
an asset (such as a commodity), or a market index.
- Derivative instruments
- Contracts such as options and futures whose price is derived from the price of an underlying financial asset.
- Derivative markets
- Markets for derivative instruments.
- Derivative security
- A financial security such as an option or future whose value is derived in part from the value and characteristics of another security, the underlying asset.
- Descending tops
- A chart pattern which in which each successive peak in a security's price is lower than the preceding peak over a period of time. Antithesis of ascending tops.
- Descriptor
- A variable describing assets, used as an element of a risk index. For example, a volatility risk index, distinguishing high volatility assets from low volatility assets, could
consist of several descriptors based on short term volatility, long term volatility,
systematic and residual volatility, etc.
- Designated order turnaround system (DOT)
- Computerized order entry system that allows orders to buy or sell large baskets of stock to be transmitted immediately to the specialist on the exchange, where execution will occur quickly, depending on the basket size. Also used for odd-lot transactions to occur at the prices and quantities available. See: AOS.
- Desk
- The New York Federal Reserve Bank's trading desk (or securities department) where all transactions of the Federal Reserve System are executed in the money market or the government securities market.
- Detachable warrant
- A warrant entitles the holder to buy a given number of shares of stock at a stipulated price. A detachable warrant is one that may be sold separately from the package it may have originally been issued with (usually a bond).
- Determinism
- Fully ordained in advance. A deterministic chaos system is one that gives random looking results,
even though the results are generated from a system of equations.
- Deterministic models
- Liability-matching models that assume that the liability payments and the asset cash flows are known with certainty. Related: Stochastic models.
- Detrend
- To remove the general drift, tendency, or bent of a set of statistical data as related to time. Often accomplished by regressing a variable or a time index and perhaps time-squared and capturing the residuals.
- Deutsche Börse AG (DBAG)
- Deutsche Börse AG (DBAG) is the operating company for the German cash and derivatives markets. It has four subsidiaries: Deutsche Börse Clearing AG, Deutsche Börse Systems AG, Frankfurter Wertpapierbörse (FWB), and the derivatives market, EUREX Deutschland (formerly the Deutsche Terminbörse ).
- Devaluation
- A decrease in the spot price of a currency. Often initiated by a government announcement.
- Diagonal spread
- An options strategy requiring a long and a short position in the same class of option at different strike prices and different expiration dates. For example, two puts or two calls in the same stock. See: Calendar spread; vertical spread.
- Dialing and smiling
- See: Cold calling
- Dialing for dollars
- A term used to describe the practice of cold calling, but which has negative implications as it is frequently applied to salespeople selling speculative or fraudulent investments.
- Diamonds
- Units of interest in the diamonds trust, a unit investment trust that serves as an index to the Dow Jones Industrial Average in that its holdings consist of the 30 component stocks of the Dow.
- Diff
- Short version of Euro rate differential, which is a Chicago Mercantile Exchange Futures contract that is founded on the interest rate spread between the U.S. dollar and the British pound, the German mark, or the Japanese yen.
- Difference check
- The difference in interest
payments that is paid to a swap counterparty to close out a deal.
- Difference from S&P
- A mutual fund's return minus the change in the Standard & Poor's 500 index for the same time period. A notation of -5.00 means the fund return is 5 percentage points less than the gain in the S&P, while 0.00 means that the fund and the S&P have the same return.
- Differential
- A small charge, typically 1/8 point, added to the purchase price and subtracted from the selling price by the dealer for odd-lot quantities.
- Differential disclosure
- The practice of reporting conflicting or markedly different information in official corporate statements including annual and quarterly reports and 10-Ks and 10-Qs.
- Differential swap
- Swap between two LIBOR rates of interest, e.g., yen LIBOR for dollar LIBOR Payments are in one currency.
- Diffusion process
- A conception of the way a stock's price changes that assumes that the price takes on all intermediate values.
- Digits deleted
- Designation on securities exchange tape meaning that because the tape has been delayed, some digits have been dropped (e.g., 26 1/2 becomes 6 1/2).
- Dilution
- Diminution in the proportion of income to which each share is entitled.
- Dilution protection
- Standard provision that changes the conversion ratio in the case of a stock dividend or extraordinary distribution to avoid dilution of a convertible bondholder's potential equity position. Adjustment usually requires a split or stock dividend in excess of 5% or issuance of stock below book value.
- Dilutive effect
- Result of a transaction that decreases earnings per common share (EPS).
- Dip
- Slight drop in securities prices after
a sustained uptrend. Analysts often advise
investors to buy on dips, meaning to buy when
a price is momentarily weak. See: Correction,
break, crash.
- Direct Claim
- A financial claim issued by a deficit unit to acquire funds for investment in real assets.
- Direct costs of financial
distress
- Costs such as fees or penalties incurred as a result of bankruptcy or liquidation proceedings.
- Direct deposit service
- A service that electronically transfers all or part of any recurring
payment—including dividends, paychecks, pensions, and Social Security
payments—directly to a shareholder's account.
- Direct estimate method
- A method of cash budgeting based on detailed estimates of cash receipts and cash disbursements category by category.
- Direct Exchange Rate
- The home currency price of one
unit of a foreign currency.
- Discount Interest
- Interest at a beginning of the loan. For example if you take out a one-year
loan of $100 at a discount interest rate of 10%, you would receive $90 at
the outset.
- Direct investment
- The purchase of a controlling interest in a company or at least enough interest to have enough influence to direct the course of the company.
- Direct lease
- Contract in which a lessor purchases new equipment from the manufacturer and leases it to the lessee.
- Direct overhead
- A fraction of overhead costs devoted to the manufacturing sector of a firm to cover expenses such as rent and utilities.
- Direct paper
- Commercial paper sold directly by the issuer to investors.
- Direct participation program
- An investment program enabling investors to directly participate in the cash_flow and tax benefits of the partnership invested in by the investor, typically a form of passive investment.
- Direct placement
- Selling a new issue not by offering it for sale publicly, but by placing it with one of several institutional investors.
- Direct quote
- For foreign exchange, the number
of US dollars needed to buy one unit of a foreign
currency.
- Direct rollover
- Movement of tax-deferred retirement plan money from one qualified plan
or custodian to another. No immediate tax liabilities or penalties are incurred, but there is
an IRS reporting
requirement.
- Direct search market
- Buyers and sellers seek each other directly and transact directly.
- Direct stock-purchase programs
- Investors purchase securities directly from the issuer.
- Direct terms
- The price of a unit of foreign currency in domestic currency
terms, such as $.9850/Euro for a US resident. See: Indirect terms.
- Director
- See: Board of directors.
- Directorship
- Used in the context of general equities. Stock status whereby a trader may not maintain positions in the security, due to an investment bank employee serving as a director on the corporation's board of directors done to avoid conflicts of interest; signified by a flashing "D" on Quotron. Contrast to restricted.
- Dirty float
- A system of floating exchange rates in which a government may intervene to change the direction of the value of the country's currency.
- Dirty price
- Bond price including accrued interest, i.e., the price paid by the bond buyer.
- Dirty stock
- A stock that fails to fulfill prerequisites to attain good delivery status.
- Disability income insurance
- An insurance policy that insures a worker in the event of an occupational mishap resulting in disability. Insurance benefits compensate the injured worker for lost pay.
- Disbursement float
- A decrease in book cash but no immediate change in bank cash, generated by checks written by the firm.
- Discharge of bankruptcy
- The termination of bankruptcy proceedings, resulting in cancellation of the debtor's obligations.
- Discharge of lien
- An order terminating a lien on property.
- Disclaimer of opinion
- An auditor's statement that does not express any opinion regarding the company's financial condition.
- Disclosure
- A company's release of all information pertaining to the company's business activity, regardless of how that information may influence investors.
- Discontinued operations
- Divisions of a business that have been sold or written off and that no longer are maintained by the business.
- Discount
- Convertible: Difference between gross parity and a given convertible price. Most often invoked when a redemption is expected before the next coupon payment, making it liable for accrued interest. Antithesis of premium.
General: Information that has already been taken into account and is built into a stock or market.
Straight equity: Price lower than that of the last sale or inside market.
- Discount bond
- Debt sold for less than its principal value. If a discount bond pays no coupon, it is called a zero coupon bond.
- Discount broker
- A brokerage house featuring relatively low commission rates in comparison to a full-service broker.
- Discount factor
- Present value of $1 received at a stated future date.
- Discount period
- The period during which a customer can deduct the discount from the net amount of the bill when making payment.
- Discount rate
- The interest rate that the Federal Reserve charges a bank to borrow funds when a bank is temporarily short of funds. Collateral is necessary to borrow, and such borrowing is quite limited because the Fed views it as a privilege to be used to meet short-term liquidity needs, and not a device to increase earnings.
- Discount securities
- Non-interest-bearing money market
instruments that are issued
at a discount and redeemed at maturity
for full face value, e.g., US Treasury
bills.
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Financial Glossary