Financial Glossary
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T
- A Nasdaq stock symbol specifying that the stock has warrants or rights.
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T Distribution
- A type of probability distribution that is theoretical and resembles a normal distribution. A T distribution differs from the normal distribution by its degrees of freedom. The higher the degrees of freedom, the closer that distribution will resemble a standard normal distribution with a mean of 0, and a standard deviation of 1.
The T distribution is also known as the “Student's T Distribution”.
- A type of probability distribution that is theoretical and resembles a normal distribution. A T distribution differs from the normal distribution by its degrees of freedom. The higher the degrees of freedom, the closer that distribution will resemble a standard normal distribution with a mean of 0, and a standard deviation of 1.
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T+1 (T+2,T+3)
- Abbreviations that refer to the settlement date of security transactions. The T stands for transaction date, which is the day the transaction takes place. The numbers 1, 2 or 3 denote how many days after the transaction date the settlement or the transfer of money and security ownership takes place.
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T. Boone Pickens
- One of America's foremost oil and gas entrepreneurs, T. Boone Pickens chairs the BP Capital Management Hedge Fund. He is one of the richest men in the world, with a net worth in the billions. He became well known for his successful business takeover tactics in the 1980s.
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Tactical Asset Allocation - TAA
- An active management portfolio strategy that rebalances the percentage of assets held in various categories in order to take advantage of market pricing anomalies or strong market sectors.
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Taft-Hartley Act
- A Federal law that was enacted in 1947 that prohibited certain union practices and required improvement in union disclosure of financial and political dealings.
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Tag-Along Rights
- A contractual obligation used to protect a minority shareholder (usually in a venture capital deal). If a majority shareholder sells his or her stake, then the minority shareholder has the right to join the transaction and sell his or her minority stake in the company.
Also referred to as "co-sale rights".
- A contractual obligation used to protect a minority shareholder (usually in a venture capital deal). If a majority shareholder sells his or her stake, then the minority shareholder has the right to join the transaction and sell his or her minority stake in the company.
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Tail Risk
- A form of portfolio risk that arises when the possibility that an investment will move more than three standard deviations from the mean is greater than what is shown by a normal distribution.
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Tailgating
- When a broker or advisor buys or sells a security for a client(s) and then immediately makes the same transaction in his or her own account.
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Tainted Alpha
- An alpha return that cannot be attributed solely to the money manager due to consequential beta exposure. Tainted alpha is seen when money managers invest in individual equities, instead of using market neutral strategies such as arbitrage, and hedging.
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Taiwan OTC Exchange (TWO) .TWO
- An alternative securities exchange in Taiwan with listing criteria that are lower than those of the Taiwan Stock Exchange (TSE). For companies making an initial public offering, listing on the TWO can be a step toward getting listed on the TSE. Initial funding of the non-profit TWO was donated by the Taiwan Securities Association, the TSE Corp. and the Taiwan Depository & Clearing Corp.
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Taiwan Stock Exchange (TAI) .TW
- The securities trading center in Taiwan. The Taiwan Stock Exchange (TWSE) was established in 1961 and began operations in February 1962. Its listed securities include stocks, government bonds, convertible bonds, entitlement certificates of convertible bonds, exchange-traded funds, call warrants, put warrants and Taiwan Depository Receipts. Its trading system has been fully computerized since 1993.
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Takaful
- A type of Islamic insurance, where members contribute money into a pooling system in order to guarantee each other against loss or damage. Takaful-branded insurance is based on Sharia, Islamic religious law, and explains how it is the responsibility of individuals to cooperate and protect each other.
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Take A Bath
- A slang term referring to the situation of an investor who has experienced a large loss from an investment or speculative position. Investors whose shares have declined significantly are said to have taken a bath.
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Take A Flier
- The slang term for a decision to invest in highly speculative investments.
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Take A Report
- A slang phrase signifying that an individual's trade order has been executed. "Take a report" is also trader slang for "get out of my face" or "you're done".
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Take or Pay
- A provision, written into a contract, whereby one party has the obligation of either taking delivery of goods or paying a specified amount.
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Take-Profit Order - T/P
- An order used by currency traders specifying the exact rate or number of pips from the current price point where to close out their current position for a profit. The rate deemed to be the level where the trader wants to take a profit is sometimes referred to as the "take-profit point".
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Takedown
- 1. The price at which underwriters obtain securities to be offered to the public.
2. The portion of securities that each investment banker will distribute in a secondary or initial pubic offering.
- 1. The price at which underwriters obtain securities to be offered to the public.
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Takeout
- A slang term denoting the purchase of a company through an acquisition, merger or other form of buyout. A takeout can refer to a hostile takeover, a friendly merger, or a leveraged or management buyout.
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Takeout Value
- The estimated value of a company if it were to be taken private or acquired. A firm's takeout value considers various metrics, such as cash flows, assets, earnings and multiples used in similar takeovers. The current mergers and acquisitions environment can also affect the takeout value of a company.
There is not an exact formula for takeout valuation, since a variety of metrics, such as EBIDTA multiple, P/E ratio and even firm-specific information can be taken into account.
- The estimated value of a company if it were to be taken private or acquired. A firm's takeout value considers various metrics, such as cash flows, assets, earnings and multiples used in similar takeovers. The current mergers and acquisitions environment can also affect the takeout value of a company.
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Takeover
- A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the acquiring company will make an offer for the outstanding shares.
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Takeover Artist
- An investor or company whose primary goal is to identify companies that are attractive to buy and that can be turned around to make a profit. A takeover artist will usually use a lot of debt (leverage) to make the purchase, and restructure the company for resale or add the company to an existing group of companies.
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Takeover Bid
- A type of corporate action in which an acquiring company makes an offer to the target company's shareholders to buy the target company's shares in order to gain control of the business. Takeover bids can either be friendly or hostile.
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Takeunder
- A corporate takeover where the target firm is offered a price per share that is less than its current market value.
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Taking The Street
- A slang phrase referring to the hedge fund tactic of buying large amounts of a particular stock from banks and brokers in an effort to clean out these institutions' inventory in a short period of time.
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Tangible Asset
- An asset that has a physical form such as machinery, buildings and land.
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Tangible Book Value Per Share - TBVPS
- A method of valuing a company on a per-share basis by measuring its equity after removing any intangible assets.
The tangible book value per share is calculated as follows:
- A method of valuing a company on a per-share basis by measuring its equity after removing any intangible assets.
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Tangible Common Equity - TCE
- A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. Tangible common equity (TCE) is calculated by subtracting intangible assets, goodwill and preferred equity from the company's book value. Measuring a company's TCE is particularly useful for evaluating companies that have large amounts of preferred stock, such as
- A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. Tangible common equity (TCE) is calculated by subtracting intangible assets, goodwill and preferred equity from the company's book value. Measuring a company's TCE is particularly useful for evaluating companies that have large amounts of preferred stock, such as
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Tangible Common Equity Ratio - TCE
- A ratio used to determine how much losses a bank can take before shareholder equity is wiped out. The Tangible Common Equity (TCE) ratio is calculated by taking the value of the company's total equity and subtracting intangible assets, goodwill and preferred stock equity and then dividing by the value of the company's tangible assets. Tangible assets is the company's total assets less goodwill and intangibles.
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Tangible Cost
- A quantifiable cost related to an identifiable source or asset. Tangible costs represent expenses arising from such things as purchasing materials, paying employees or renting equipment.
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Tangible Net Worth
- A measure of the physical worth of a company, which does not include any value derived from intangible assets such as copyrights, patents and intellectual property. Tangible net worth is calculated by taking a firm's total assets and subtracting the value of all liabilities and intangible assets.
- A measure of the physical worth of a company, which does not include any value derived from intangible assets such as copyrights, patents and intellectual property. Tangible net worth is calculated by taking a firm's total assets and subtracting the value of all liabilities and intangible assets.
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Tangible Personal Property
- An tax term describing personal property that can be physically relocated, such as furniture and office equipment. Tangible personal property is always depreciated over either a five- or seven-year period using straight-line amortization, but is eligible for accelerated depreciation as well.
- An tax term describing personal property that can be physically relocated, such as furniture and office equipment. Tangible personal property is always depreciated over either a five- or seven-year period using straight-line amortization, but is eligible for accelerated depreciation as well.
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Tankan Survey
- An economic survey of Japanese business issued by the central Bank of Japan, which it then uses to formulate monetary policy. The report is released four times a year in April, July, October and mid-December.
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Tap Issue
- A procedure that allows borrowers to sell bonds or other short-term debt instruments from past issues. The bonds are issued at their original face value, maturity and coupon rate, but sold at the current market price.
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Tape Is Late
- A situation on the trading floor where trading volume is so heavy that the real-time ticker quotes are delayed by a minute or two. When the tape is late some price or volume digits will be deleted.
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Tape Shredding
- When a broker divides an order for securities into a number of smaller orders. For certain securities, smaller orders can be easier to fill, so brokers have the ability to tape shred when they believe that doing so will speed up the rate at which the order is filled.
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Taping Rule
- A rule created by the National Association of Securities Dealers (NASD) that requires that special supervisory procedures be put in place when a specific percentage of a firm's employees are hired from brokers/dealers that have been expelled or have had their registration revoked because they breached trading regulations.
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Target Firm
- A firm that has been targeted by another firm for a takeover.
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Target Risk Fund
- A fund that attempts to expose its investors to a specified amount of risk. The fund manager of a target risk fund is responsible for overseeing all the securities owned within the fund, to ensure that the level of risk isn’t greater or less than the fund's target amount of risk exposure.
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Target-Benefit Plan
- A benefit plan that is similar to a defined benefit plan since contributions are based on projected retirement benefits. However, unlike a defined benefit plan, the benefits provided to participants at retirement are based on the performance of the investments, and are therefore not guaranteed.
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Target-Date Fund
- A mutual fund in the hybrid category that automatically resets the asset mix (stocks, bonds, cash equivalents) in its portfolio according to a selected time frame that is appropriate for a particular investor. A target-date fund is similar to a life-cycle fund except that a target-date fund is structured to address some date in the future, such as retirement.
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Targeted Accrual Redemption Note - TARN
- An investment vehicle, calculated based on a variation of the LIBOR formula, which provides a guaranteed sum of coupons. Once the coupons you've recieved reaches the target cap, the note will be redeemed and you will be paid the par value of the note. Targeted Accrual Redemption Notes (TARN) typically have coupon payments that are based on an inverse floating LIBOR calculation. Thus, they may have good performance in the short-term if interest rates decrease, but may also underperform if interest rates rise.
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Targeted Amortization Class - TAC
- A type of credit derivative that is similar to a planned amortization class (PAC) in that it protects investors from prepayment; however, it is structured differently than a PAC. TACs protect investors from a rise in the prepayment rate or a fall in interest rates. They do not protect from a fall in the prepayment rate like PACs.
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Targeted-Distribution Fund
- A mutual fund that focuses on the distribution of income and capital gains to fund holders. These funds are becoming more popular as our population ages because they are aimed at income replacement, something that is crucial as traditional employer-sponsored pension plans disappear.
Also known as "Open-End Managed-Payout Funds."
- A mutual fund that focuses on the distribution of income and capital gains to fund holders. These funds are becoming more popular as our population ages because they are aimed at income replacement, something that is crucial as traditional employer-sponsored pension plans disappear.
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Tariff
- A taxation imposed on goods and services imported into a country. Also known as a duty tax.
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TARP Bonuses
- A buzzword coined by the financial media during the financial crisis of 2008/09 to describe bonuses paid to employees and executives of banks and other financial firms that received Troubled Asset Relief Program (TARP) funds. TARP bonuses were controversial because employees were receiving additional pay even as their companies required bailout funds.
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Tax Advisor
- A financial expert with advanced training and knowledge of tax law. The services of a tax advisor are usually retained in order to minimize taxation while remaining compliant with the law in complicated financial situations. Tax advisors can include Certified Public Accounts, tax attorneys and financial advisors.
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Tax Anticipation Notes - TAN
- Short-term debt securities issued in anticipation of future tax collections.
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Tax Attribute
- A type of loss or tax credit that must be reduced as a result of the exclusion of debt cancellation from a taxpayer's gross income. Tax attributes are adjusted when a taxpayer declares bankruptcy.
Tax attributes include net operating losses and carryovers, general business credit carryovers, alternative minimum tax credit carryovers, capital loss and foreign tax credit carryovers.
- A type of loss or tax credit that must be reduced as a result of the exclusion of debt cancellation from a taxpayer's gross income. Tax attributes are adjusted when a taxpayer declares bankruptcy.
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Tax Avoidance
- The use of legal methods to modify an individual's financial situation in order to lower the amount of income tax owed. This is generally accomplished by claiming the permissible deductions and credits. This practice differs from tax evasion, which is illegal.
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Tax Base
- The assessed value of a set of assets, investments or income streams that is subject to taxation, or the assessed value of a single asset that is subject to taxation. Anything that can be taxed has a tax base.
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Tax Bracket
- The rate at which an individual is taxed. Tax brackets are set based on income levels; individuals with lower income levels are taxed at a lower rate than individuals with higher income levels. Tax brackets serve as cutoff points for given income tax rates; therefore, if an individual's annual taxable income exceeds the cutoff point, that person is taxed according to the next tax bracket.
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Tax Court
- A court of law whose sole jurisdiction is to decide litigation involving federal income, death, and other taxes.
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Tax Credit
- A dollar-for-dollar reduction in the tax payment required from a person.
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Tax Deferred
- Refers to investment earnings such as interest, dividends or capital gains that accumulate free from taxation until the investor withdraws and takes possession of them. The most common types of tax-deferred investments include those in individual retirement accounts (IRAs) and deferred annuities.
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Tax Drag
- The reduction of potential income due to taxes. Drag describes the loss in returns owing to taxation, usually on an investment. Tax drag is commonly used when describing the difference between an investment vehicle that is tax-sheltered and one that is not. For many individuals, tax drag can have a significant effect on overall investment performance.
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Tax Efficiency
- An attempt to minimize tax liability when given many different financial decisions. There is a wide variety of tax-efficient vehicles, including tax-efficient mutual funds, irrevocable trusts and tax-exempt commercial paper.
- An attempt to minimize tax liability when given many different financial decisions. There is a wide variety of tax-efficient vehicles, including tax-efficient mutual funds, irrevocable trusts and tax-exempt commercial paper.
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Tax Equity And Fiscal Responsibility Act Of 1982 - TEFRA
- Federal tax legislation passed in 1982 that modified some aspects of the Economic Recovery Tax Act of 1981 (ERTA). Both of these pieces of tax legislation took place during the Reagan Presidency.
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Tax Evasion
- An illegal practice where a person, organization or corporation intentionally avoids paying his/her/its true tax liability. Those caught evading taxes are generally subject to criminal charges and substantial penalties.
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Tax Exempt
- To be free from, or not subject to, taxation by regulators or government entities. A tax exempt entity can be excused from a single or multiple taxation laws. Governments are often trying to encourage investment when exempting taxation.
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Tax Fairness
- A tax platform based on an ideal that aims to create a system of taxation that is fair, clear and equivalent for all taxpayers. Overall, tax fairness looks to limit the amount of tax legislation and rules that benefit one segment of the tax-paying population over another.
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Tax Freedom Day
- The day that the average American has earned enough money (in theory) to pay off his or her total tax obligations for the year. The calculation used to determine this date assumes that everyone in the nation works for eight hours a day beginning January 1, and that every dollar earned is not spent. The Tax Foundation calculates Tax Freedom Day and also publishes a short report that summarizes trends relating to this measure.
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Tax Gain/Loss Harvesting
- Selling securities at a loss to offset a capital gains tax liability. Tax gain/loss harvesting is typically used to limit the recognition of short-term capital gains, which are normally taxed at higher federal income tax rates than long-term capital gains.
Also known as "tax-loss selling".
- Selling securities at a loss to offset a capital gains tax liability. Tax gain/loss harvesting is typically used to limit the recognition of short-term capital gains, which are normally taxed at higher federal income tax rates than long-term capital gains.
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Tax Haven
- A country that offers individuals and businesses little or no tax liability.
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Tax Holiday
- A government incentive program that offers a tax reduction or elimination to businesses. Tax holidays are often used to reduce sales taxes by local governments, but they are also commonly used by governments in developing countries to help stimulate foreign investment.
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Tax Home
- An individual's primary place of work or residence. This is used when determining tax for travel or transportation expenses.
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Tax Identification Number - TIN
- As the name implies, this number is a nine-digit number used as a tracking number by the IRS for tax purposes. Whereas Social Security numbers are in the format of XXX-XX-XXXX, tax ID numbers are read as XX-XXXXXXX. This number is required information on all tax returns filed with the IRS.
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Tax Incidence
- An economic term for the division of a tax burden between buyers and sellers. Tax incidence is related to the price elasticity of supply and demand. When supply is more elastic than demand, the tax burden falls on the buyers. If demand is more elastic than supply, producers will bear the cost of the tax.
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Tax Increase Prevention and Reconciliation Act of 2005 - TIPRA
- A tax-related act signed by President George W. Bush in May 2006 that contains revisions to pre-existing tax laws. Revisions include topics concerning investor-related tax breaks, business provisions, individual retirement accounts, "kiddie tax" and alternative minimum taxes.
Also known as Public Law 109-222.
- A tax-related act signed by President George W. Bush in May 2006 that contains revisions to pre-existing tax laws. Revisions include topics concerning investor-related tax breaks, business provisions, individual retirement accounts, "kiddie tax" and alternative minimum taxes.
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Tax Liability
- The total amount of tax that an entity is legally obligated to pay to an authority as the result of the occurrence of a taxable event. Tax liability can be calculated by applying the appropriate tax rate to the taxable event's tax base. Taxable events include, but are not limited to, annual income, the sale of an asset, a fiscal year-end or an inheritance.
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Tax Lien
- A claim imposed by the federal government to liquidate a person's property until the tax and debt owed is fully paid.
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Tax Lien Certificate
- A certificate of claim against property that has a lien placed upon it as a result of unpaid property taxes.
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Tax Lot Accounting
- A record keeping technique that traces the dates of purchase and sale, cost basis, and transaction size for each security in your portfolio, even if you make more than one trade in the same security.
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Tax Preference Item
- A type of income, normally tax-free, that may trigger the alternative minimum tax (AMT) for taxpayers. Tax preference items include private-activity municipal-bond interest, the qualifying exclusion for small business stock and excess intangible drilling costs for oil and gas, if this amount exceeds 40% of AMT income. Tax preference items are added to the amount of AMT income in the tax formula.
- A type of income, normally tax-free, that may trigger the alternative minimum tax (AMT) for taxpayers. Tax preference items include private-activity municipal-bond interest, the qualifying exclusion for small business stock and excess intangible drilling costs for oil and gas, if this amount exceeds 40% of AMT income. Tax preference items are added to the amount of AMT income in the tax formula.
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Tax Rate
- 1. The rate at which a business or person is taxed on income.
2. The rate of tax on good and services.
- 1. The rate at which a business or person is taxed on income.
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Tax Reform Act Of 1986
- Federal legislation that modified many significant aspects of the U.S. tax system.
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Tax Refund
- The return of amounts excess amounts of income tax that a taxpayer pays to the state or federal government. In certain cases, taxpayers may even receive a refund if they owed no taxes, because certain tax credits are fully refundable.
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Tax Refund Anticipation Loan - RAL
- A loan provided by a third party against a taxpayer's expected refund. The tax refund anticipation loan is not provided by the U.S. Treasury or the IRS and is subject to the interest and fees set by the lender. These loans are most often offered by large tax preparation companies to taxpayers expecting refunds of a few thousands dollars or less.
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Tax Return
- 1. The tax form or forms used to file income taxes with the Internal Revenue Service (IRS). Tax returns often are set up in a worksheet format, where the income figures used to calculate the tax liability are written into the documents themselves. Tax returns must be filed every year for an individual or business that received income during the year, whether through regular income (wages), interest, dividends, capital gains, or other profits.
2. A return of excess taxes paid during a given tax year; this is more accurately known as a "tax refund".
- 1. The tax form or forms used to file income taxes with the Internal Revenue Service (IRS). Tax returns often are set up in a worksheet format, where the income figures used to calculate the tax liability are written into the documents themselves. Tax returns must be filed every year for an individual or business that received income during the year, whether through regular income (wages), interest, dividends, capital gains, or other profits.
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Tax Schedule
- A rate sheet used by individual taxpayers to determine their estimated taxes due. There are four main schedules used, based on the filing status of the individual:
Schedule X - single
Schedule Y-1 - married filing jointly, qualifying widow(er)
Schedule Y-2 - married filing separately
Schedule Z - head of household
The term is also used to describe the various addendum sheets to IRS Form 1040, which include schedules A (itemized deductions), B (dividend & interest income), C (business profit or loss) and D (capital gains).
Also known as a “rate schedule” or “tax rate schedule”.
- A rate sheet used by individual taxpayers to determine their estimated taxes due. There are four main schedules used, based on the filing status of the individual:
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Tax Selling
- A type of sale whereby an investor sells an asset with a capital loss in order to lower or eliminate the capital gain realized by other investments. The offsetting capital loss allows the investor to avoid paying capital gains tax on recently sold or appreciated assets.
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Tax Service Fee
- A legitimate closing cost used to ensure that mortgagors pay their property taxes. A tax service fee is typically paid by the buyer at the time the home is purchased, the lender then passes this sum on to a tax service agency. The role of a tax service agency is to look for delinquent property taxes and alert the mortgage company to prevent tax liens from existng against their mortgagors' homes. Since tax liens have priority over lender liens, banks wants to ensure that they, not the state, become the owner of these properties.
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Tax Shelter
- A legal method of minimizing or decreasing an investor's taxable income and, therefore, his or her tax liability. Tax shelters can range from investments or investment accounts that provide favorable tax treatment, to activities or transactions that lower taxable income. The most common type of tax shelter is an employer-sponsored 401(k) plan.
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Tax Shield
- A reduction in taxable income for an individual or corporation achieved through claiming allowable deductions such as mortgage interest, medical expenses, charitable donations, amortization and depreciation. These deductions reduce taxpayers' taxable income for a given year or defer income taxes into future years.
Tax shields vary from country to country, and their benefits will depend on the taxpayer's overall tax rate and cash flows for the given tax year.
- A reduction in taxable income for an individual or corporation achieved through claiming allowable deductions such as mortgage interest, medical expenses, charitable donations, amortization and depreciation. These deductions reduce taxpayers' taxable income for a given year or defer income taxes into future years.
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Tax Swap
- A method of crystallizing capital losses by selling losing positions and purchasing companies within similar industries that have similar fundamentals.
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Tax Table
- A table or chart displaying the amount of tax due based on income received. The tax rate may be shown as a discrete amount, a percentage rate, or a combination of both. Tax tables are used by individuals, companies and estates for both standard income and capital gains.
A typical tax table will show breakpoint income levels, above and below which different tax rates will apply.
- A table or chart displaying the amount of tax due based on income received. The tax rate may be shown as a discrete amount, a percentage rate, or a combination of both. Tax tables are used by individuals, companies and estates for both standard income and capital gains.
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Tax Treaty
- A bilateral agreement made by two countries to resolve issues involving double taxation of passive and active income. Tax treaties generally determine the amount of tax that a country can apply to a taxpayer's income and wealth. Tax haven countries are the only countries that typically do not enter into tax treaties.
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Tax Wedge
- 1. The difference between before-tax and after-tax wages. The tax wedge measures how much the government receives as a result of taxing the labor force.
2. A measure of the market inefficiency that is created when a tax is imposed on a product or service. The tax causes the supply and demand equilibrium to shift, creating a wedge of dead weight losses.
- 1. The difference between before-tax and after-tax wages. The tax wedge measures how much the government receives as a result of taxing the labor force.
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Tax Year
- The 12-month period for which you are filing your tax return.
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Tax-Deferred Savings Plan
- A savings plan or account that is registered with the government and provides deferral of tax obligations. Tax-deferred savings plans may defer taxable income earned within the account either until withdrawal or until a particular date.
They are used most commonly in retirement savings accounts such as IRAs, 401(k)s and RRSPs, but are also available for education savings plans and other accounts.
- A savings plan or account that is registered with the government and provides deferral of tax obligations. Tax-deferred savings plans may defer taxable income earned within the account either until withdrawal or until a particular date.
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Tax-Efficient Fund
- A mutual fund in which structure and operations are based on reducing the tax liability that its shareholders face. Reducing the tax liability of a fund is done in three main ways:
1. By purchasing tax-free (or low taxed) investments such as municipal bonds.
2. Keeping the fund's turnover low, especially if the fund invests in stock. Stocks held for more than one year are taxed at a lower long-term capital gains rate than short-term transactions.
3. Avoiding or limiting income-generating assets, such as dividend-paying stocks, which create a tax liability at each dividend issuance.
- A mutual fund in which structure and operations are based on reducing the tax liability that its shareholders face. Reducing the tax liability of a fund is done in three main ways:
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Tax-Equivalent Yield
- The pretax yield that a taxable bond needs to possess for its yield to be equal to that of a tax-free municipal bond. This calculation can be used to fairly compare the yield of a tax-free bond to that of a taxable bond in order to see which bond has a higher applicable yield.
Also known as "after-tax yield."
- The pretax yield that a taxable bond needs to possess for its yield to be equal to that of a tax-free municipal bond. This calculation can be used to fairly compare the yield of a tax-free bond to that of a taxable bond in order to see which bond has a higher applicable yield.
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Tax-Exempt Commercial Paper
- An unsecured short-term loan, usually issued to finance short-term liabilities, that provides the debt holders (bondholders) some level of tax preference on the earnings from their debt investment at a local, state or federal level, or a combination thereof.
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Tax-Exempt Interest
- Interest income that is exempt from federal income tax. Although it is not directly taxed, this income may still be required to determine other tax calculations such as Social Security benefits.
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Tax-Exempt Security
- A security in which the income produced is free from federal, state and local taxes. Most tax-exempt securities come in the form of municipal bonds, which represent obligations of a state, territory or municipality. For some investors, U.S. savings bond interest may also be free from federal income taxes.
- A security in which the income produced is free from federal, state and local taxes. Most tax-exempt securities come in the form of municipal bonds, which represent obligations of a state, territory or municipality. For some investors, U.S. savings bond interest may also be free from federal income taxes.
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Tax-Free Savings Account - TFSA
- An account that does not charge taxes on any contributions, interest earned, dividends or capital gains, and can be withdrawn tax free. Tax-free savings accounts were introduced in Canada in 2009 with a limit of $5,000 per year, which is indexed for subsequent years. The contributions are not tax deductible and any unused room can be carried forward. This savings account is available to individuals aged 18 and older and can be used for any purpose.
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Tax-Free Spinoff
- A corporate action in which a publicly traded company spins off one of its business units as an entirely new company. The spun off company becomes its own publicly traded corporation with its own ticker symbol, board of directors, management team, etc. This type of transaction is deemed to be "tax free" because the parent company is still able to divest the business it wants to separate from; however, the company does not incur capital gains tax on the divestiture, which would be the case in an outright sale of the business unit to another company.
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Tax-Sheltered Annuity
- A type of annuity that allows an employee to make contributions from his or her income into a retirement plan. The contributions are deducted from the employee's income and, as a result, the contributions and related benefits are not taxed until the employee withdraws them from the plan. Because the employer can also make direct contributions to the plan, the employee gains the benefit of having additional tax-free funds accruing.
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Taxable Bond
- A debt security whose return to the investor is subject to taxes at the local, state or federal level, or some combination thereof.
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Taxable Estate
- The total value of a deceased person's assets that are subject to taxation - minus liabilities and minus the prescribed tax-deductible portion of assets left behind by the deceased.
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Taxable Event
- Any event or transaction that results in a tax consequence for the party who executes the event. Common examples of taxable events for investors include receiving interest and dividends, selling securities for a gain and exercising options.
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Taxable Gain
- The portion of a sale that is liable to taxation.
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Taxable Income
- The amount of income that is used to calculate an individual’s or a company’s income tax due. Taxable income is generally described as gross income or adjusted gross income minus any deductions, exemptions or other adjustments that are allowable in that tax year.
Taxable income is also generated from appreciated assets that have been sold or capitalized during the year and from dividends and interest income. Income from these sources is generally taxed at a different rate and calculated separately by the tax entity.
- The amount of income that is used to calculate an individual’s or a company’s income tax due. Taxable income is generally described as gross income or adjusted gross income minus any deductions, exemptions or other adjustments that are allowable in that tax year.
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Taxable Preferred Securites
- A type of preferred equity security that does not qualify for the dividends-received deduction for corporations of typical preferred securities, defined in Section 243 of the Internal Revenue Service (IRS) Code. Taxable preferred securities are usually junior level liabilities, and the coupons tied to them can either be fixed or variable, and for indefinite or specific maturities.
As with regular preferred stocks, these securities trade like bonds with regular denominations of $25 par and $1,000 par. The dividends paid are treated as regular income instead of dividends to the investor, but receive favorable tax treatment for the issuing company.
Also known as "hybrid preferred securities".
- A type of preferred equity security that does not qualify for the dividends-received deduction for corporations of typical preferred securities, defined in Section 243 of the Internal Revenue Service (IRS) Code. Taxable preferred securities are usually junior level liabilities, and the coupons tied to them can either be fixed or variable, and for indefinite or specific maturities.
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Taxable Spinoff
- A divestiture of a subsidiary or division by a publicly traded company, which will be subject to capital gains taxation. The subsidiary will become completely independent from the parent corporation, operating entirely on its own. To qualify as a taxable transaction, the parent corporation must divest through direct sale of the division, or the assets it contains. The profits made from the sale will be taxed as capital gains.
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Taxation Without Representation
- A situation in which a government imposes taxes on a particular group of its citizens, despite the citizens not consenting or having an actual representative deliver their views when the taxation decision was made. This situation was one of the triggering events that spurred the original thirteen American colonies to revolt against the
- A situation in which a government imposes taxes on a particular group of its citizens, despite the citizens not consenting or having an actual representative deliver their views when the taxation decision was made. This situation was one of the triggering events that spurred the original thirteen American colonies to revolt against the
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Taxes
- An involuntary fee levied on corporations or individuals that is enforced by a level of government in order to finance government activities.
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Taxpayer Bill of Rights (TABOR)
- A measure created by conservative and libertarian groups that seeks to limit the growth of government and to police the actions of the Internal Revenue Service (IRS). The Taxpayer Bill of Rights (TABOR) was born out of years of taxpayer complaints about harassment and abuse of power by the IRS. TABOR also mandates that increases in tax revenue must be reasonably tied to increases in such factors as inflation and population.
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Taylors Rule
- A guideline for interest rate manipulation. It was introduced by Stanford economist John Taylor in order to set and adjust prudent rates that will stabilize the economy in the short-term and still maintain long-term growth. This rule is based on 3 factors:
1) Actual versus targeted inflation levels
2) Actual employment versus full employment levels
3) The appropriate short-term interest rate consistent with full employment.
- A guideline for interest rate manipulation. It was introduced by Stanford economist John Taylor in order to set and adjust prudent rates that will stabilize the economy in the short-term and still maintain long-term growth. This rule is based on 3 factors:
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Teacher Retirement System - TRS
- An organization that is specifically set up for teachers to help with or manage retirement planning. Because there are individual teacher retirement systems set up for each state, there are differences in what they each offer. For the most part, the organization helps arrange retirement benefits for its member and their beneficiaries.
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Tear Sheets
- A slang term used to describe Standard & Poor's one-page summary sheets for public companies. The summary page gives an overview of business segments, recent operating results and key fundamental analysis metrics.
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Tech Bubble
- A pronounced and unsustainable market rise attributed to increased speculation in technology stocks. A tech bubble is highlighted by rapid share price growth and high valuations based on standard metrics like price/earnings ratio or price/sales.
The technology stocks involved in a bubble may be confined to a particular industry (such as internet software or fuel cells), or cover the entire technology sector as a whole, depending on the strength and depth of investor demand. At the peak of a bubble, many fledging tech companies will seek to go public through initial public offerings (IPOs) in an attempt to capitalize on heightened investor demand.
- A pronounced and unsustainable market rise attributed to increased speculation in technology stocks. A tech bubble is highlighted by rapid share price growth and high valuations based on standard metrics like price/earnings ratio or price/sales.
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Tech Street
- A term used in the financial markets and the press to refer to the technology sector. Companies like Intel, Microsoft, Apple and Dell are all considered to be part of Tech Street.
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Technical Analysis
- A method of evaluating securities by analyzing statistics generated by market activity, such as past prices and volume. Technical analysts do not attempt to measure a security's intrinsic value, but instead use charts and other tools to identify patterns that can suggest future activity.
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Technical Bankruptcy
- The state of a company or person who has defaulted on a financial obligation and would be declared bankruptcy if the creditor makes a claim through the courts.
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Technical Correction
- A decrease in the market price of an asset or entire market after extensive price increases. A technical correction occurs even when there is no evidence that the increasing price trend should cease. It is often caused when investors temporarily slow down their purchases of securities, which commonly leads to a pullback toward a short-term support level.
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Technical Indicator
- Any class of metrics whose value is derived from generic price activity in a stock or asset. Technical indicators look to predict the future price levels, or simply the general price direction, of a security by looking at past patterns. Examples of common technical indicators include Relative Strength Index, Money Flow Index, Stochastics, MACD and Bollinger Bands.
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Technical Rally
- An upward movement in a security's price following a declining trend. The movement is caused by technical as opposed to fundamental factors affecting sentiment.
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Technically Strong Market
- A situation in which the stock market is rising on high volume or falling on low volume.
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Technically Weak Market
- A situation in which the stock market is rising on low volume or falling on high volume.
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Technology Sector
- A category of stocks relating to the research, development and/or distribution of technologically based goods and services. This sector contains businesses revolving around the manufacturing of electronics, creation of software, computers or products and services relating to information technology.
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Ted Spread
- The price difference between three-month futures contracts for U.S. Treasuries and three-month contracts for Eurodollars having identical expiration months.
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Teenie
- A measure of value representing a sixteenth (1/16 or .0625) of one point. Since decimalization, many traders have referred to a teenie as a cent.
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Tel Aviv Stock Exchange (TLV) .TA
- The securities market in Israel. Securities exchange in Israel began in 1935 through the Exchange Bureau for Securities, before Israel was a state. Israel became a state in 1948, and its securities market became formalized in 1953 with the Tel Aviv Stock Exchange (TASE). Its major index since 1992 has been the TA-25, a capitalization-weighted index of the Exchange's largest 25 stocks.
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Telecommunications Consumer Protection Act of 1991 - TCPA
- A U.S. federal law created in response to increased consumer concern and complaints directed at the Federal Communications Commission (FCC) regarding the use of telephones for solicitation of business.
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Telephone Booth
- A slang term referring to one of the many phone terminals on the floor of the New York Stock Exchange that is used by floor traders to receive orders.
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Teletax
- A fully automated phone service that offers prerecorded messages on various tax topics for callers. Teletax covers about 150 different tax-related issues commonly faced by taxpayers, such as who must file, tax credits, retirement accounts and payment arrangements.
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Temporal Method
- A method of foreign currency translation that uses exchange rates based on the time assets and liabilities are acquired or incurred. The exchange rate used also depends on the method of valuation that is used. Assets and liabilities valued at current costs use the current exchange rate and those that use historical exchange rates are valued at historical costs.
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Temporary Lender
- A mortgage lender that sells the loans it originates into the secondary market shortly after closing, as opposed to holding the loans in portfolio. Most lenders are temporary lenders.
These lenders have a few options when selling loans. Security dealers may be willing to purchase the loans for the purposes of securitizing the assets for resale to investors. Other lenders may buy the debt and hold it in their portfolios. The temporary lender may also sell its loans into its own trust, as part of a securitization process.
- A mortgage lender that sells the loans it originates into the secondary market shortly after closing, as opposed to holding the loans in portfolio. Most lenders are temporary lenders.
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Temporary Liquidity Guarantee Program (TLGP)
- The TGLP was instituted in 2008 by the FDIC during the worldwide banking crisis. The TGLP was one of many government interventions that resulted from the determination by the U.S. Treasury and Federal Reserve that the severe systemic risk warranted unprecedented action. Under the program, the FDIC increased its insurance coverage for depository accounts held at certain financial institutions, and also leant its guarantee to certain unsecured credit obligations of those institutions, most notably certificates of deposit and commercial paper. These two separate programs were known as the Transaction Account Guarantee Program and the Debt Guarantee Program
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Temporary New Account
- An account that is set up within a fund to hold a balance as a result of a significant cash inflow or outflow to a fund. The account is set up to hold these funds temporarily until they can be distributed to unit holders, used to acquire additional assets for the fund or for other large fund expenditures.
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Tenancy In Common
- A way for two or more people to have equal ownership interests in a property. Each owner has the right to leave his or her share of the property to any beneficiary upon the owner's death. Each party (owner) in a tenancy-in-common agreement has the right to use the property even if the physical size of the stake is different.
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Tenants By Entirety - TBE
- When a property is owned by two or more tenants. If one owner dies, the survivor takes the whole estate.
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Tenants In Common - TIC
- When a property is owned by two or more tenants. If one owner dies, the other does not automatically take the entire estate.
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Tenbagger
- A stock whose value increases 10 times its purchase price. This expression was coined by Peter Lynch, one of the greatest investors of all time, in his book "One Up On Wall Street" (1989).
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Tender
- 1. To accept a formal offer, such as a takeover bid or tender offer.
2. A means of settlement in a financial transaction.
3. A bid to buy treasury bills.
4. A notice from a futures-contract seller to offer money or goods for settlement of a futures contract.
- 1. To accept a formal offer, such as a takeover bid or tender offer.
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Tender Offer
- An offer to purchase some or all of shareholders' shares in a corporation. The price offered is usually at a premium to the market price.
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Tenement
- A housing structure that has several houses or units put together, often called an apartment. The word "tenement" was used most frequently many years ago to reference housing usually inhabited by lower income families. These buildings are simple rental properties that are more practical for those unable to afford a house or for those who would like to live in an area, such as city centers, where there are no houses to purchase.
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Tenkan-Sen
- A component of the Ichimoku Kinko Hyo indicator that is primarily used to measure short-term momentum. This line is calculated by using the following formula:
This line is generally constructed by only considering the highs and lows for the last seven to nine time periods. The resulting line is interpreted in the same manner as a short-term moving average.
- A component of the Ichimoku Kinko Hyo indicator that is primarily used to measure short-term momentum. This line is calculated by using the following formula:
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Tenor
- The amount of time left for the repayment of a loan or contract or the initial term length of a loan. Tenor can be expressed in years, months or days.
- The amount of time left for the repayment of a loan or contract or the initial term length of a loan. Tenor can be expressed in years, months or days.
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Tequila Effect
- Informal name given to the impact of the 1994 Mexican economic crisis on the South American economy. The Tequila Effect occurred because of a sudden devaluation in the Mexican peso, which then caused other currencies in the region (the Southern Cone and
Also referred to as the "Mexican Shock".
- Informal name given to the impact of the 1994 Mexican economic crisis on the South American economy. The Tequila Effect occurred because of a sudden devaluation in the Mexican peso, which then caused other currencies in the region (the Southern Cone and
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Term
- 1. The lifespan assigned to an asset or a liability, over which the value of the asset/liability is expected to either grow or shrink, depending on its nature.
2. The period of time assigned as the lifespan of any investment. In the case of debt, the time it takes for all payments to be made by the borrower and received by the lender. In the case of an equity investment, the time that elapses between the acquisition of the equity and its sale or removal from holdings for another reason.
- 1. The lifespan assigned to an asset or a liability, over which the value of the asset/liability is expected to either grow or shrink, depending on its nature.
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Term Asset-Backed Securities Loan Facility - TALF
- A program created by the U.S. Federal Reserve in November, 2008 to boost consumer spending to help jumpstart the economy. This is accomplished through the issuance of asset-backed securities. The collateral for these securities is made up of student, personal auto and credit card loans. Backing for these loans comes from the (up to) $1 trillion provided by the New York Federal Reserve Bank.
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Term Auction Facility - TAF
- A monetary policy program used by the Federal Reserve to help increase liquidity in the U.S. credit markets. TAF allows the Federal Reserve to auction set amounts of collateral-backed short-term loans to depository institutions that are judged to be in sound financial condition by their local reserve banks. Participants bid through the reserve banks, with a minimum bid set at an overnight indexed swap rate relating to the maturity of the loans. These auctions allow financial institutions to borrow funds at a rate that is below the discount rate.
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Term Bond
An issue of bonds that all have the same maturity date.
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Term Certain Annuity
- An insurance product that guarantees a periodic payment of a predetermined amount for a fixed term. Once the term has elapsed, these products are spent and offer no possibility of any future payments, even if the annuitant is still alive. Annuitants may choose to purchase these products gradually by making periodic payments, or they may make a purchase with a single lump sum payment. Usually, lump sum purchases are made at, or shortly after, the annuitant's retirement.
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Term Deposit
- A deposit held at a financial institution that has a fixed term. These are generally short-term with maturities ranging anywhere from a month to a few years. When a term deposit is purchased, the lender (the customer) understands that the money can only be withdrawn after the term has ended or by giving a predetermined number of days notice.
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Term Life Insurance
- A policy with a set duration limit on the coverage period. Once the policy is expired, it is up to the policy owner to decide whether to renew the term life insurance policy or to let the coverage end. This type of insurance policy contrasts with permanent life insurance, in which duration extends until the policy owner reaches 100 years of age (i.e. death).
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Term Loan
- A loan from a bank for a specific amount that has a specified repayment schedule and a floating interest rate. Term loans almost always mature between one and 10 years.
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Term Out
- The transfer of debt within a company's balance sheet without acquiring new debt. This is done through the capitalization of short-term to long-term debt.
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Term Securities Lending Facility - TSLF
- A lending facility through the Federal Reserve that allows primary dealers to borrow Treasury securities on a 28-day term by pledging eligible collateral. The eligible securities under the term securities lending facility include 'AAA' to 'Aaa' rated mortgage-backed securities (MBS) not under review for downgrade, and all securities eligible for tri-party repurchase agreements. In exchange for this collateral, the primary dealers receive a basket of Treasury general collateral, which includes Treasury bills, notes, bonds and inflation-indexed securities form the Fed's system open market account.
- A lending facility through the Federal Reserve that allows primary dealers to borrow Treasury securities on a 28-day term by pledging eligible collateral. The eligible securities under the term securities lending facility include 'AAA' to 'Aaa' rated mortgage-backed securities (MBS) not under review for downgrade, and all securities eligible for tri-party repurchase agreements. In exchange for this collateral, the primary dealers receive a basket of Treasury general collateral, which includes Treasury bills, notes, bonds and inflation-indexed securities form the Fed's system open market account.
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Term Sheet
- A non-binding agreement setting forth the basic terms and conditions under which an investment will be made.
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Term Structure Of Interest Rates
- A yield curve displaying the relationship between spot rates of zero-coupon securities and their term to maturity.
- A yield curve displaying the relationship between spot rates of zero-coupon securities and their term to maturity.
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Term To Maturity
- The remaining life of a financial instrument. In bonds, it is the time between when the bond is issued and when it matures (maturity date), at which time the issuer must redeem the bond by paying the principal (or face value).
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Terminal Capitalization Rate
- A rate used to estimate the resale value of a property at the end of the holding period. The expected net operating income (NOI) per year is divided by the terminal cap rate (expressed as a percentage) to get the terminal value. Terminal capitalization rates are based on forecasts and estimates and changes based on the person doing the calculation.
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Terminal Elevator
- An agricultural elevator that is considered to be the largest accumulator of the actual.
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Terminal Value - TV
- The value of an investment at the end of a period, taking into account a specified rate of interest.
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Terminal Year
- For income tax and estate planning, this refers to the year in which a person has died.
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Terminally Ill
- When a person is not expected to live more than 12 months.
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Termination Date
- The day on which a swap contract becomes invalid and no further exchanges will occur. A final payment is made upon a swap's termination.
The termination date is also referred to as a swap's "expiration date".
- The day on which a swap contract becomes invalid and no further exchanges will occur. A final payment is made upon a swap's termination.
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Terotechnology
- A word derived from the Greek root word "tero" or "I care", that is now used with the term "technology" to refer to the study of the costs associated with an asset throughout its life cycle - from acquisition to disposal. The goals of this approach are to reduce the different costs incurred at the various stages of the asset's life and to develop methods that will help extend the asset's life span.
Terotechnology uses tools such as net present value, internal rate of return and discounted cash flow in an attempt to minimize the costs associated with the asset in the future. These costs can include engineering, maintenance, wages payable to operate the equipment, operating costs and even disposal costs.
Also known as "life-cycle costing".
- A word derived from the Greek root word "tero" or "I care", that is now used with the term "technology" to refer to the study of the costs associated with an asset throughout its life cycle - from acquisition to disposal. The goals of this approach are to reduce the different costs incurred at the various stages of the asset's life and to develop methods that will help extend the asset's life span.
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Tertiary Industry
- The segment of the economy that provides services to its consumers. This includes a wide range of businesses including financial institutions, schools, transports and restaurants.
Also known as "tertiary sector of industry," or "service industry/sector".
- The segment of the economy that provides services to its consumers. This includes a wide range of businesses including financial institutions, schools, transports and restaurants.
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Test
In technical analysis, it is when a stock price approaches a support or resistance level set by the market. If the stock stays within the support and resistance levels, the test is passed. However, if the stock price reaches new lows and/or new highs, the test has failed.
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Testamentary Trust
- A trust created as a result of explicit instructions from a deceased's will.
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Testamentary Will
- A testamentary will is a traditional will, sometimes referred to as just a will. A will is a legal document that is used to transfer an estate to beneficiaries after the death of the testator (the person that makes the will). Testamentary wills are also used to appoint guardians for minor children, select executors of wills and set up trusts for beneficiaries. Any person over the age of majority and that is of sound mind can legally draft a will.
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Texas Ratio
- A ratio developed by Gerald Cassidy and other analysts at RDC Capital Markets to measure the credit problems of particular banks or regions of banks. The Texas ratio takes the amount of a bank's non-performing assets and loans, as well as loans delinquent for more than 90 days, and divides this number by the firm's tangible capital equity plus its loan loss reserve. A ratio of more than 100 (or 1:1) is considered a warning sign.
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THB (Thai Baht)
- The currency abbreviation for the Thai baht (THB), the currency for Thailand. The Thai baht is made up of 100 satang and is often presented as β. 25 satang is often referred to as a "salung" based on the predecimalization days, when one-quarter of a baht was known as a salung.
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The Bond Buyer
- The Bond Buyer is a municipal bond market daily trade publication. It began production in 1891 as The Daily Bond Buyer and is headquartered in Manhattan. It is under the umbrella of Source Media, a division of Thompson Financial and is considered a leading news source for people and organizations working in the municipal finance industry.
The publication's primary reader audience is municipal bond market brokers and dealers, followed by bond issuers, bond and tax counsel, bond rating agencies and credit enhancers, public finance bankers and, lastly, trustees.
- The Bond Buyer is a municipal bond market daily trade publication. It began production in 1891 as The Daily Bond Buyer and is headquartered in Manhattan. It is under the umbrella of Source Media, a division of Thompson Financial and is considered a leading news source for people and organizations working in the municipal finance industry.
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The Conference Board
- A not-for-profit research organization for businesses that distributes information about management and the marketplace. It is a widely quoted private source of business intelligence.
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The Global Dow
- An equal-weighted stock index consisting of the stocks of 150 top companies from around the world as selected by Dow Jones editors based on the companies' long history of success and popularity among investors. The Global Dow is designed to reflect the global stock market and gives preferences to companies with a global reach.
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The Great Recession
- A buzz word that describes the recession that started on December 2007 in terms of the Great Depression of the 1930s. Generally, the Great Recession lasted longer and was more severe than prior recessions. However, the severity of economic decline has not eclipsed the levels reached by the Great Depression.
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The Kelly Criterion
- A mathematical formula relating to the long-term growth of capital developed by John Larry Kelly Jr. The formula was developed by Kelly while working at the AT&T Bell Laboratories. The formula is currently used by gamblers and investors to determine what percentage of their bankroll/capital should be used in each bet/trade to maximize long-term growth.
- A mathematical formula relating to the long-term growth of capital developed by John Larry Kelly Jr. The formula was developed by Kelly while working at the AT&T Bell Laboratories. The formula is currently used by gamblers and investors to determine what percentage of their bankroll/capital should be used in each bet/trade to maximize long-term growth.
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The Wealth Effect
- The premise that when the value of stock portfolios rises due to escalating stock prices, investors feel more comfortable and secure about their wealth, causing them to spend more. For example, economists in 1968 were baffled when a 10% tax hike failed to slow down consumer spending. Later this continued spending was attributed to the wealth effect. While disposable income fell as a result of increased taxes, wealth was rising sharply as the stock market moved up. Undaunted, consumers continued their spending spree.
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The World Bank
- An international organization dedicated to providing financing, advice and research to developing nations to aid their economic advancement.
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Theoretical Dow Jones Index
- A method of calculating a Dow Jones index (most often the DJIA) that assumes all index components hit their high or low at the same time during the day.
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Theoretical Ex-Rights Price
- The market price that a stock will theoretically have following a new rights issue. Although the stock price is not likely to change immediately following the new rights issue, it will change as the rights expiration date approaches.
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Theory Of The Firm
- A microeconomic concept founded in neoclassical economics that states that firms (corporations) exist and make decisions in order to maximize profits. Businesses interact with the market to determine pricing and demand and then allocate resources according to models that look to maximize net profits.
The theory of the firm goes along with the theory of the consumer, which states that consumers seek to maximize their overall utility. Modern takes on the theory of the firm sometimes distinguish between long-run motivations (sustainability) and short-run motivations (profit maximization).
- A microeconomic concept founded in neoclassical economics that states that firms (corporations) exist and make decisions in order to maximize profits. Businesses interact with the market to determine pricing and demand and then allocate resources according to models that look to maximize net profits.
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There Ain't No Such Thing As A Free Lunch - TANSTAAFL
- An acronym that attempts to describe the cost of decision making and consumption. "There ain't no such thing as a free lunch" (TANSTAAFL) expresses the idea that even if something seems like it is free, there is always a cost, no matter how indirect or hidden.
In finance, TANSTAAFL refers to the opportunity cost paid to make a decision. The decision to consume one product usually comes with the trade-off of giving up the consumption of something else.
Also known as "there is no such thing as a free lunch" (TINSTAAFL).
- An acronym that attempts to describe the cost of decision making and consumption. "There ain't no such thing as a free lunch" (TANSTAAFL) expresses the idea that even if something seems like it is free, there is always a cost, no matter how indirect or hidden.
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Theta
- A measure of the rate of decline in the value of an option due to the passage of time. Theta can also be referred to as the time decay on the value of an option. If everything is held constant, then the option will lose value as time moves closer to the maturity of the option.
Theta is part of the group of measures known as the "Greeks" (other measures include delta, gamma and vega) which are used in options pricing.
- A measure of the rate of decline in the value of an option due to the passage of time. Theta can also be referred to as the time decay on the value of an option. If everything is held constant, then the option will lose value as time moves closer to the maturity of the option.
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Thin Market
- A market with a low number of buyers and sellers. Since few transactions take place in a thin market, prices are often more volatile and assets are less liquid. The low number of bids and asks will also typically result in a larger spread between the two quotes.
Also known as a "narrow market".
- A market with a low number of buyers and sellers. Since few transactions take place in a thin market, prices are often more volatile and assets are less liquid. The low number of bids and asks will also typically result in a larger spread between the two quotes.
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Thinly Traded
- An asset that cannot easily be sold or exchanged for cash without a substantial change in price. Thinly-traded securities in the financial markets are exchanged in low volumes and often have a limited number of interested buyers and sellers, which can often lead to volatile changes in price when a transaction does occur.
Also known as illiquid.
- An asset that cannot easily be sold or exchanged for cash without a substantial change in price. Thinly-traded securities in the financial markets are exchanged in low volumes and often have a limited number of interested buyers and sellers, which can often lead to volatile changes in price when a transaction does occur.
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Third Market
- Trading by non exchange-member brokers/dealers and institutional investors of exchange-listed stocks. In other words, the third market involves exchange-listed securities that are being traded over-the-counter between brokers/dealers and large institutional investors.
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Third Market Maker
- A third-party firm willing to buy or sell stocks listed on exchanges at publicly quoted prices.
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Third-Party Claims Administrator
- This type of administrator processes claims for a third-party company. Insurance companies and employee benefit providers often employ third-party administrators to process their claims. These administrators also often help to process employee retirement plans and flexible spending accounts.
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Third-Party Distributor
- The name given to institutions that sell or distribute mutual funds to investors for fund management companies without direct relation to the fund itself. For mediating these transactions, third-party distributors receive a portion of the trailer fees associated with mutual fund sales for acquiring new business.
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Third-Party Mortgage Originator
- 1. A person or company involved in the process of marketing mortgages and gathering borrower information for a mortgage application. This information is then transferred or sold to the actual mortgage lender. Mortgage brokers are third-party originators.
2. A person or company that is involved in any aspect of the mortgage origination process (underwriting, closing, funding, etc.) on behalf of the actual mortgage lender.
- 1. A person or company involved in the process of marketing mortgages and gathering borrower information for a mortgage application. This information is then transferred or sold to the actual mortgage lender. Mortgage brokers are third-party originators.
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Thirty-Year Treasury
- A U.S. Treasury debt obligation that has a maturity of 30 years. The 30-year Treasury is the benchmark U.S. bond and one of the world's most closely watched financial instrument.
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Three Black Crows
- A bearish candlestick pattern that is used to predict the reversal of the current uptrend. This pattern consists of three consecutive long-bodied candlesticks that have closed lower than the previous day with each session's open occurring within the body of the previous candle.
- A bearish candlestick pattern that is used to predict the reversal of the current uptrend. This pattern consists of three consecutive long-bodied candlesticks that have closed lower than the previous day with each session's open occurring within the body of the previous candle.
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Three White Soldiers
- A bullish candlestick pattern that is used to predict the reversal of the current downtrend. This pattern consists of three consecutive long-bodied candlesticks that have closed higher than the previous day, with each session's open occurring within the body of the previous candle.
- A bullish candlestick pattern that is used to predict the reversal of the current downtrend. This pattern consists of three consecutive long-bodied candlesticks that have closed higher than the previous day, with each session's open occurring within the body of the previous candle.
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Three-Year Rule
- Section 2035 of the tax code, which stipulates that assets that have been gifted through an ownership transfer, or assets for which the original owner has relinquished power, are to be included in the gross value of the original owner's estate if the transfer took place within three years of his or her death. If gifted assets do not meet the necessary requirements, the value of the assets is added to the value of the estate at the time of the original owner's death, increasing its value and the estate taxes imposed on it.
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Threshold List
- A daily public accounting of market settlement system failures (or 'fails') published by the National Securities Clearing Corporation in compliance with SEC regulations. A market settlement failure occurs when delivery on a security is not made within the alloted settlement period.
Also referred to as the "Regulation SHO Threshold Security List".
- A daily public accounting of market settlement system failures (or 'fails') published by the National Securities Clearing Corporation in compliance with SEC regulations. A market settlement failure occurs when delivery on a security is not made within the alloted settlement period.
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Thrift Bank
- A financial institution focusing on taking deposits and originating home mortgages. Thrift banks often have access to low-cost funding from Federal Home Loan Banks, which allows for higher savings account yields to customers and increased liquidity for mortgage loans.
Also known as "savings and loan associations".
- A financial institution focusing on taking deposits and originating home mortgages. Thrift banks often have access to low-cost funding from Federal Home Loan Banks, which allows for higher savings account yields to customers and increased liquidity for mortgage loans.
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Thrift Savings Plan - TSP
- A retirement savings plan created by the Federal Employee's Retirement System Act of 1986 for current or retired employees of the federal civil service. The thrift savings plan is a defined-contribution plan designed to give federal employees the same retirement savings related benefits that workers in the private sector enjoy with 401(k) plans. Contributions to the plan are automatically deducted from each paycheck.
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Through Bill Of Lading
- A bill of lading that allows the transportation of goods both within domestic borders and through international shipment. The through bill of lading is often required for the exportation of goods, as it serves as a receipt or carriage contract for the products. As with any bill of lading, this document outlines the type and quantity of transported good and notifies the shipper of its destination.
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Throwback
- A price move back toward the entry level of a security that has broken beyond the barrier of a price pattern or trendline. The retreat toward the level of the breakout is not uncommon and is used by many traders to confirm the validity of the new momentum. Notice how the price in the chart below retests the neckline of the head and shoulders pattern before continuing its move higher.
- A price move back toward the entry level of a security that has broken beyond the barrier of a price pattern or trendline. The retreat toward the level of the breakout is not uncommon and is used by many traders to confirm the validity of the new momentum. Notice how the price in the chart below retests the neckline of the head and shoulders pattern before continuing its move higher.
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Thrusting Line
- In technical analysis, the bearish or bullish thrusting line serves as a continuation indicator, adding evidence that a stock will continue its current price trend. The visual depiction of this pricing trend using candlestick graphs shows the second day of trading closing the opposite direction of the first, but failing to break through the midpoint of the real body (the range between the opening and closing prices).
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TIAA-CREF
- A nonprofit organization that provides investment and insurance services for those working in education, medicine, culture and research. TIAA-CREF, short for Teachers Insurance and Annuity Association - College Retirement Equities Fund, has a history that dates back to the late Andrew Carnegie, whose Carnegie Foundation for the Advancement of Teaching created the initial organization in order to service the pension needs of professors.
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Tick
- The minimum upward or downward movement in the price of a security.
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Tick Index
- The number of stocks trading on an uptick minus the number of stocks trading on a downtick.
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Tick Test Rules
- A now defunct rule that placed restrictions on when a short sale may be executed. Tick test rules dictated that a short sale could be made only in two situations:
1. When the price of the particular stock was higher than the last trade price (an uptick).
2. When there was no change in the last trade price. The previous trade price had to be higher than the trade price that preceded it (a zero uptick or zero plus tick)
Also known as the "short sale rule".
- A now defunct rule that placed restrictions on when a short sale may be executed. Tick test rules dictated that a short sale could be made only in two situations:
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Ticker Symbol
- An arrangement of characters (usually letters) representing a particular security listed on an exchange or otherwise traded publicly. When a company issues securities to the public marketplace, it selects an available ticker symbol for its securities which investors use to place trade orders. Every listed security has a unique ticker symbol, facilitating the vast array of trade orders that flow through the financial markets every day.
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Ticker Tape
- A computerized device that relays financial information to investors around the world, including the stock symbol, the latest price and the volume on securities as they are traded.
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Tide
- A metaphor for a long-term market trend.
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Tied Selling
- The illegal practice of a company providing a product or service on condition the customer purchases a product from the same or related company. It is mainly used in reference to banks and referred to as coercive tied selling.
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Tier 1 Capital
- A term used to describe the capital adequacy of a bank. Tier I capital is core capital, this includes equity capital and disclosed reserves.
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Tier 2 Capital
- A term used to describe the capital adequacy of a bank. Tier II capital is secondary bank capital that includes items such as undisclosed reserves, general loss reserves, subordinated term debt, and more.
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Tier 3 Capital
- Tertiary capital held by banks to meet part of their market risks, that includes a greater variety of debt than tier 1 and tier 2 capitals. Tier 3 capital debts may include a greater number of subordinated issues, undisclosed reserves and general loss reserves compared to tier 2 capital.
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Tiger Economy
- A nickname given to the economies of Southeast Asia. Some of the tigers are Indonesia, Singapore, Malaysia, Thailand, South Korea and China.
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Tight Monetary Policy
- A course of action undertaken by the Federal Reserve to constrict spending in an economy that is seen to be growing too quickly, or to curb inflation when it is rising too fast. The Fed will "make money tight" by raising short-term interest rates (also known as the Fed funds, or discount rate), which increases the cost of borrowing and effectively reduces its attractiveness.
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Tight Money
- A situation in which money or loans are very difficult to obtain in a given country. If you do have the opportunity to secure a loan, then interest rates are usually extremely high. Also known as "dear money".
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Tilt Fund
- A fund developed when an institution compiles a core holding of stocks that mimic a benchmark type index such as the S&P 500 to which additional securities are added to help tilt the fund toward outperforming the market. These funds are typically used by major investors in an effort to enhance overall investment returns. The right mix/tilt of stocks provides both safety and performance.
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Timber Investment Management Organization - TIMO
- A management group that aids institutional investors in managing their timberland investments. A TIMO acts as a broker for institutional clients. The primary responsibility of TIMOs are to find, analyze and acquire investment properties that would best suit their clients. Once an investment property is chosen, the TIMO is given the responsibility of actively managing the timberland to achieve adequate returns for the investors.
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Timberland Investment
- An investment instrument used primarily by large institutional investors (such as public and private pension funds). The two main assets that underlie timberland investments are tree farms and managed natural forests. The returns on these forestland investments come from biological growth, upward product class movement, timber price appreciation and land price appreciation.
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Time Decay
- The ratio of the change in an option price to the decrease in time to expiration. Since options are a wasting asset, their value declines over time. As an option approaches its expiry date without being in the money, its time value declines since the probability of that option being profitable (in the money) is reduced. Also known as "theta" and "time-value decay".
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Time Deposit
- A savings account or CD held for a fixed-term with the understanding that the depositor can only withdraw by giving written notice.
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Time Horizon
- The length of time over which an investment is made or held before it is liquidated. Time horizons can range from seconds, in the case of a day trader, all the way up to decades for a buy-and-hold investor. There is no "right" time frame - it depends on the investor's individual objectives.
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Time In Force
- A special instruction used when placing a trade to indicate how long an order will remain active before it is executed or expires. Time-in-force options allow traders to be more specific about the time parameters in which an order is activated. This is especially important for active traders.
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Time Segmented Volume - TSV
- A technical analysis indicator developed by Worden Brothers Inc. that segments a stock's price and volume according to time intervals. The price and volume data is then compared to uncover periods of accumulation (buying) and distribution (selling).
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Time Series
- A sequence of numerical data points in successive order, usually occurring in uniform intervals. In plain English, a time series is simply a sequence of numbers collected at regular intervals over a period of time.
- A sequence of numerical data points in successive order, usually occurring in uniform intervals. In plain English, a time series is simply a sequence of numbers collected at regular intervals over a period of time.
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Time Value
- The portion of the option premium that is attributable to the amount of time remaining until the expiration of the option contract.
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Time Value of Money (TVM)
- The idea that money available at the present time is worth more than the same amount in the future due to its potential earning capacity. This core principle of finance holds that, provided money can earn interest, any amount of money is worth more the sooner it is received.
Also referred to as "present discounted value".
- The idea that money available at the present time is worth more than the same amount in the future due to its potential earning capacity. This core principle of finance holds that, provided money can earn interest, any amount of money is worth more the sooner it is received.
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Time-Of-Day Order
- An order to buy or sell an asset that is placed at a specific time period during a trading session. A time-of-day order enters the market at a predetermined minute and remains good until canceled, unless otherwise specified.
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Time-Period Basis
- An implication surrounding the use of time-series data in which the final statistical conclusion can change based on to the starting or ending dates of the sample data. The concept discourages using a smaller time series, as chance events are more likely to be reflected in the conclusion.
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Time-Preference Theory Of Interest
- A theory that examines the nature of consumerism, and the factors that influence consumers to delay current consumption or expenditures in anticipation of greater future returns. The rate of time preference itself can be quantified as the amount of money required to compensate the consumer for foregoing current consumption. This theory also attempts to tie interest rates into the equation by comparing the perceived value of expected future returns with the rate of interest paid on current savings.
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Time-Weighted Rate of Return
- A measure of the compound rate of growth in a portfolio. Because this method eliminates the distorting effects created by inflows of new money, it is used to compare the returns of investment managers.
This is also called the "geometric mean return," as the reinvestment is captured by using the geometric total and mean, rather than the arithmetic total and mean.
- A measure of the compound rate of growth in a portfolio. Because this method eliminates the distorting effects created by inflows of new money, it is used to compare the returns of investment managers.
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Timeliness
- A proprietary rating system used to rate stocks while taking into account earnings changes and price performance in order to assess potential price performance over the short term. Common market factors are not measured in this stock rating system. The rating of "A" is the highest rating and a rating of "E" is the lowest. These ratings are updated daily. Although "A" and "B" stocks may yield higher returns compared to "C" and "D" stocks, these higher rated stocks tend to be much more volatile.
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Times Interest Earned - TIE
- A metric used to measure a company's ability to meet its debt obligations. It is calculated by taking a company's earnings before interest and taxes (EBIT) and dividing it by the total interest payable on bonds and other contractual debt. It is usually quoted as a ratio and indicates how many times a company can cover its interest charges on a pretax basis. Failing to meet these obligations could force a company into bankruptcy.
Also referred to as "interest coverage ratio" and "fixed-charged coverage".
- A metric used to measure a company's ability to meet its debt obligations. It is calculated by taking a company's earnings before interest and taxes (EBIT) and dividing it by the total interest payable on bonds and other contractual debt. It is usually quoted as a ratio and indicates how many times a company can cover its interest charges on a pretax basis. Failing to meet these obligations could force a company into bankruptcy.
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Timeshare
- An ownership model whereby many customers own allotments of usage in the same property. The timeshare model can be applied to many different types of properties such as condominiums, homes, campgrounds, recreational vehicles and private jets.
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Timing Risk
- The risk that an investor takes when trying to buy or sell a stock based on future price predictions. Timing risk explains the potential for missing out on beneficial movements in price due to an error in timing. This could cause harm to the value of an investor's portfolio because of purchasing too high or selling too low.
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Tip From A Dip
- Advice from a person who claims to have inside information, such as substantially higher than expected earnings or government approval of corporate mergers, that will materially impact a stock's price but actually doesn't.
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Tip Income
- Funds received over and above wages for services rendered. Also known as gratuities.
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Tipping
- The act of providing material non-public information about a publicly-traded company to a person who is not authorized to have the information. This is an illegal act. Information is considered non-public until it has been publicly released and the financial markets have had sufficient time to digest the impact the information may have had on prices.
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Tirone Levels
- A series of three sequentially higher horizontal lines used to identify possible areas of support and resistance for the price of an asset. The position of the center line is plotted by calculating the difference between the highest high and the lowest low for the asset price over a period of time and dividing it by 2. The top and bottom line are drawn 1/3 and 2/3 of the difference, respectively, between the same high and low that are used to calculate the center line.
- A series of three sequentially higher horizontal lines used to identify possible areas of support and resistance for the price of an asset. The position of the center line is plotted by calculating the difference between the highest high and the lowest low for the asset price over a period of time and dividing it by 2. The top and bottom line are drawn 1/3 and 2/3 of the difference, respectively, between the same high and low that are used to calculate the center line.
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Title
- The right to the ownership and possession of any item that may be legally recognized as belonging to someone or something. In its most basic sense, title is the recognition of ownership.
There are three components to the concept of title; possession or occupation, the right of possession and apparent ownership.
- The right to the ownership and possession of any item that may be legally recognized as belonging to someone or something. In its most basic sense, title is the recognition of ownership.
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Title Insurance
- Insurance that covers loss of an interest in a property due to legal defects and that is required if the property has a mortgage. Most title insurance is lender's title insurance, which is paid for by the borrower but protects only the lender.
Owner's title insurance is a separate policy, in some areas paid for by the seller, to protect the buyer's equity in the property.
- Insurance that covers loss of an interest in a property due to legal defects and that is required if the property has a mortgage. Most title insurance is lender's title insurance, which is paid for by the borrower but protects only the lender.
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Title Loan
- A loan where an asset is required as collateral. These loans are popular for two reasons. The first being that with this type of loan, the applicant's credit rating is not considered. The second being that title loans can be approved very quickly and for loan amounts as little as $100 in most cases.
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Title Search
- An examination of public records to determine and confirm a property's legal ownership, and find out what claims are on the property. A title search is usually performed by a title company or an attorney, who researches the vested owner, the liens or other judgments on the property, the loans on the property and the property taxes due.
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TND (Tunisian Dinar)
- The currency abbreviation for the Tunisian dinar (TND), the currency for Tunisia, a country located on the Mediterranean coast of Northern Africa. The Tunisian dinar is made up of 1,000 milim and is officially presented with the symbol DT, although TND is also used, and writing dinar after the amount is most common (100 DT, 100 TND or 100 dinar).
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To Be Announced - TBA
- A term used to describe a forward mortgage-backed securities trade. Pass-through securities issued by Freddie Mac, Fannie Mae and Ginnie Mae trade in the TBA market. The term TBA is derived from the fact that the actual mortgage-backed security that will be delivered to fulfill a TBA trade is not designated at the time the trade is made. The securities are "to be announced" 48 hours prior to the established trade settlement date.
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Today's High
- The intraday high trading price. In other words, this is the highest price at which a stock traded during the course of the day.
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Today's Low
- The intraday low trading price. In other words, this is the lowest price at which a stock traded during the course of the day.
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Toehold Purchase
- A purchase of less than 5% of a target company's outstanding stock made by an acquiring company.
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Toggle Note
- A payment-in-kind bond, where the issuer has the option to defer an interest payment by agreeing to pay an increased coupon in the future. With toggle notes, all deferred payments must be settled by the bond's maturity.
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Tokyo Price Index - TOPIX
- An index that measures stock prices on the Tokyo Stock Exchange (TSE). This capitalization-weighted index lists all firms that are considered to be under the 'first section' on the TSE, which groups all of the large firms on the exchange into one pool. The second section groups all of the remaining smaller firms.
- An index that measures stock prices on the Tokyo Stock Exchange (TSE). This capitalization-weighted index lists all firms that are considered to be under the 'first section' on the TSE, which groups all of the large firms on the exchange into one pool. The second section groups all of the remaining smaller firms.
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Tokyo Stock Exchange - TSE
- The stock exchange headquartered in Tokyo, Japan.
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Toll Revenue Bond
- A type of municipal bond used to build a public project such as a bridge, tunnel or expressway. The principal and interest repayments are supplied by revenues from tolls paid by users of the public project in question.
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Tombstone
- A written advertisement placed by investment bankers in a public offering of a security. It gives basic details about the issue and, in order of importance, the underwriting groups involved in the deal.
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Tomorrow Next - Tom Next
- In currency transactions, the purchase and sale of a currency made to avoid taking actual delivery of the currency. The current position is closed out at the daily close rate and re-entered at the new opening rate the next trading day. Also referred to as "tomorrow next procedure".
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Too Big To Fail
- The idea that a business has become so large and ingrained in the economy that a government will provide assistance to prevent its failure. "Too big to fail" describes the belief that if an enormous company fails, it will have a disastrous ripple effect throughout the economy.
- The idea that a business has become so large and ingrained in the economy that a government will provide assistance to prevent its failure. "Too big to fail" describes the belief that if an enormous company fails, it will have a disastrous ripple effect throughout the economy.
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Top
- The highest price level reached by a security, index of securities, commodity or economic cycle in a given time period, followed by at least a short-term decline.
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TOP (Tonga Pa'anga)
- The currency abbreviation for the Tonga pa'anga (TOP), the currency for Tonga. The Tonga pa'anga is made up of 100 hau and is often presented with either the symbol T$ or PT. The pa'anga is not convertible to any other currencies.
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Top Line
- A reference to the gross sales or revenues of a company, or an allusion to a course of action that increases or reduces revenues. The "top" reference relates to the fact that on a company's income statement, the first line at the top of the page is generally reserved for gross sales or revenue. A company that increases its revenues is said to be "growing its top line", or "generating top-line growth".
This contrasts with net income (or net earnings per share), which is usually the bottom line of the company's income statement.
- A reference to the gross sales or revenues of a company, or an allusion to a course of action that increases or reduces revenues. The "top" reference relates to the fact that on a company's income statement, the first line at the top of the page is generally reserved for gross sales or revenue. A company that increases its revenues is said to be "growing its top line", or "generating top-line growth".
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Top-Down Analysis
- A method of analysis that involves looking at the "big picture" first, and then analyzing the details of smaller components. By first analyzing the overall picture, such as a macroeconomic trend, an investor can start narrowing potential companies to analyze. A trader that uses technical analysis may use top-down analysis as part of their trading system.
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Top-Down Investing
- An investment approach that involves looking at the "big picture" in the economy and financial world and then breaking those components down into finer details. After looking at the big picture conditions around the world, the different industrial sectors are analyzed in order to select those that are forecasted to outperform the market. From this point, the stocks of specific companies are further analyzed and those that are believed to be successful are chosen as investments.
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Topple Rate
- The rate at which the group of leading companies, whether in industries or in market indexes, changes over time. This phenomenon is usually attributed to increased global competition and technology, although the existence of a topple rate is generally considered a healthy part of an advanced economy.
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Toraku Index
- A technical indicator that compares the number of advancing stocks on the Tokyo Stock Exchange to the number that are declining. The result is used by technical traders to determine the likelihood of a market correction.
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Toronto Stock Exchange - TSX
- The largest stock exchange in Canada, traditionally home to a large number of natural resource companies.
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Torpedo Stock
- A stock that has fallen substantially in value and that looks like it will continue to fall in value in the foreseeable future. This name refers to this type of stock's similarity to a battleship after it has been struck by a torpedo: it goes down fast and continues to sink until hits the bottom.
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Total Bond Fund
- A mutual fund or exchange-traded fund that seeks to replicate a broad bond index by owning many securities across a range of maturities, from both public and private sectors. The most common index used as a benchmark is the Lehman Aggregate Bond Index, which captures Treasury bonds, corporate bonds, municipal bonds and high-grade mortgage-backed securities.
Total bond funds may invest in bonds of a similar maturity, class and rating to replicate an issue that is not available for purchase by the fund. These restrictions exist because of the diversity and relative illiquidity of the bond markets compared to equities markets. It is important for a total bond fund to have a similar interest rate and maturity to the base index.
- A mutual fund or exchange-traded fund that seeks to replicate a broad bond index by owning many securities across a range of maturities, from both public and private sectors. The most common index used as a benchmark is the Lehman Aggregate Bond Index, which captures Treasury bonds, corporate bonds, municipal bonds and high-grade mortgage-backed securities.
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Total Cost Of Ownership - TCO
- In general, the purchase price of an asset plus the additional costs of operation.
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Total Debt Service Ratio - TDS
- A debt service measure that financial lenders use as a rule of thumb to give a preliminary assessment of whether a potential borrower is already in too much debt. More specifically, this ratio shows the proportion of gross income that is already spent on housing-related and other similar payments.
Receiving a ratio of less than 40% means that the potential borrower has an acceptable level of debt.
- A debt service measure that financial lenders use as a rule of thumb to give a preliminary assessment of whether a potential borrower is already in too much debt. More specifically, this ratio shows the proportion of gross income that is already spent on housing-related and other similar payments.
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Total Debt To Total Assets
- A metric used to measure a company's financial risk by determining how much of the company's assets have been financed by debt. Calculated by adding short-term and long-term debt and then dividing by the company's total assets.
- A metric used to measure a company's financial risk by determining how much of the company's assets have been financed by debt. Calculated by adding short-term and long-term debt and then dividing by the company's total assets.
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Total Enterprise Value - TEV
- A valuation measurement used to compare companies with varying levels of debt. This is calculated as:
TEV = Market Capitalization + Interest Bearing Debt + Preferred Stock - Excess Cash.
- A valuation measurement used to compare companies with varying levels of debt. This is calculated as:
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Total Expense Ratio - TER
- A measure of the total costs associated with managing and operating an investment fund such as a mutual fund. These costs consist primarily of management fees and additional expenses such as trading fees, legal fees, auditor fees and other operational expenses. The total cost of the fund is divided by the fund's total assets to arrive at a percentage amount, which represents the TER:
More often referred to as "expense ratio".
- A measure of the total costs associated with managing and operating an investment fund such as a mutual fund. These costs consist primarily of management fees and additional expenses such as trading fees, legal fees, auditor fees and other operational expenses. The total cost of the fund is divided by the fund's total assets to arrive at a percentage amount, which represents the TER:
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Total Housing Expense
- The sum of a homeowner's monthly mortgage principal and interest payments, hazard insurance premiums, property taxes and homeowner's association fees, plus monthly debt service. Monthly debt service consists of payments on credit cards, installment loans and other debts. A borrower's total housing expense is used in the calculation of a back-end ratio, which is used to qualify a borrower for a loan.
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Total Return
- When measuring performance, the actual rate of return of an investment or a pool of investments over a given evaluation period. Total return includes interest, capital gains, dividends and distributions realized over a given period of time.
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Total Return Index
- A type of equity index that tracks both the capital gains of a group of stocks over time, and assumes that any cash distributions, such as dividends, are reinvested back into the index. Looking at an index's total return displays a more accurate representation of the index's performance. By assuming dividends are reinvested, you effectively have accounted for stocks in an index that do not issue dividends and instead, reinvest their earnings within the underlying company.
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Total Return Swap
- A swap agreement in which one party makes payments based on a set rate, either fixed or variable, while the other party makes payments based on the return of an underlying asset, which includes both the income it generates and any capital gains. In total return swaps, the underlying asset, referred to as the reference asset, is usually an equity index, loans, or bonds. This is owned by the party receiving the set rate payment.
Total return swaps allow the party receiving the total return to gain exposure and benefit from a reference asset without actually having to own it. These swaps are popular with hedge funds because they get the benefit of a large exposure with a minimal cash outlay.
- A swap agreement in which one party makes payments based on a set rate, either fixed or variable, while the other party makes payments based on the return of an underlying asset, which includes both the income it generates and any capital gains. In total return swaps, the underlying asset, referred to as the reference asset, is usually an equity index, loans, or bonds. This is owned by the party receiving the set rate payment.
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Total Revenue Test
- A test that approximates the price elasticity of demand by comparing the change in total revenue as a result of changing the product price. The total revenue test assumes all other factors that may influence revenue will remain constant during the testing period.
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Total Shareholder Return - TSR
- 1. The total return of a stock to an investor (capital gain plus dividends).
2. The internal rate of return of all cash flows to an investor during the holding period of an investment.
- 1. The total return of a stock to an investor (capital gain plus dividends).
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Total Stock Fund
- A mutual fund or ETF that seeks to replicate the broad market by holding the stock of every security that trades on a certain exchange, invests in a certain country, or passes basic thresholds of size (market cap) or trading volume. Total stock funds, also called total stock market index funds or total market funds, may track a broad index such as the Wilshire 5000, Russell 2000 or MSCI U.S. Broad Market.
- A mutual fund or ETF that seeks to replicate the broad market by holding the stock of every security that trades on a certain exchange, invests in a certain country, or passes basic thresholds of size (market cap) or trading volume. Total stock funds, also called total stock market index funds or total market funds, may track a broad index such as the Wilshire 5000, Russell 2000 or MSCI U.S. Broad Market.
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Total Tax
- The composite total of all taxes that is owed by a taxpayer for the year. This number is essentially the penultimate point in the tax formula. It accounts for all credits and deductions due the taxpayer but not any tax payments made during the year. Total tax is then compared with payments made to see whether a refund is due or there is a balance owed.
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Total Utility
- The aggregate level of satisfaction or fulfillment that a consumer receives through the consumption of a specific good or service. Each individual unit of a good or service has its own marginal utility, and the total utility is simply the sum of all the marginal utilities of the individual units. Classical economic theory suggests that all consumers want to get the highest possible level of total utility for the money they spend.
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Touchline
- The highest bid and lowest ask at market for a particular security during a given time in the trading day.
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Toxic Assets
- An asset that becomes illiquid when its secondary market disappears. Toxic assets cannot be sold, as they are often guaranteed to lose money. The term "toxic asset" was coined in the financial crisis of 2008/09, in regards to mortgage-backed securities, collateralized debt obligations and credit default swaps, all of which could not be sold after they exposed their holders to massive losses.
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Toxic Waste
- A slang term referring to securities that are unattractive due to certain underlying provisions or risks making them generally illiquid with poor pricing schemes and transparency.
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Tracker Fund
- An index fund that tracks a broad market index or a segment thereof. Such a fund invests in all, or a representative number, of the securities within the index.
Also know as an "index fund".
- An index fund that tracks a broad market index or a segment thereof. Such a fund invests in all, or a representative number, of the securities within the index.
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Tracking Error
- A divergence between the price behavior of a position or a portfolio and the price behavior of a benchmark. This is often in the context of a hedge or mutual fund that did not work as effectively as intended, creating an unexpected profit or loss instead.
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Tracking Stock
- 1. Common stock issued by a parent company that tracks the performance of a particular division without having claim on the assets of the division or the parent company. Also known as "designer stock".
2. A type of security specifically designed to mirror the performance of a larger index.
- 1. Common stock issued by a parent company that tracks the performance of a particular division without having claim on the assets of the division or the parent company. Also known as "designer stock".
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Trade
- A basic economic concept that involves multiple parties participating in the voluntary negotiation and then the exchange of one's goods and services for desired goods and services that someone else possesses. The advent of money as a medium of exchange has allowed trade to be conducted in a manner that is much simpler and effective compared to earlier forms of trade, such as bartering.
In financial markets, trading also can mean performing a transaction that involves the selling and purchasing of a security.
- A basic economic concept that involves multiple parties participating in the voluntary negotiation and then the exchange of one's goods and services for desired goods and services that someone else possesses. The advent of money as a medium of exchange has allowed trade to be conducted in a manner that is much simpler and effective compared to earlier forms of trade, such as bartering.
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Trade Date
- The date on which a security trade occurs.
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Trade Date Accounting
- A method company accountants and bookkeepers use to record transactions that take place on the date at which an agreement has been entered (the trade date), and not on the date the transaction has been finalized (the settlement date). If the transaction involves interest, the interest cannot be recorded on the books until the settlement date has arrived.
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Trade Deficit
- An economic measure of a negative balance of trade in which a country's imports exceeds its exports. A trade deficit represents an outflow of domestic currency to foreign markets.
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Trade Finance
- The science that describes the management of money, banking, credit, investments and assets for international trade transactions.
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Trade or Fade Rule
- An option exchange rule that prevents the occurrence of a trade through.
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Trade Price Response
- The setting up of a trade which is based upon what the price of a security does once it reaches a certain critical level. After the security has to reacted the level, the security's positive or negative reaction is used to set up trades. Traditionally, the critical levels are areas of resistance or support for the security.
- The setting up of a trade which is based upon what the price of a security does once it reaches a certain critical level. After the security has to reacted the level, the security's positive or negative reaction is used to set up trades. Traditionally, the critical levels are areas of resistance or support for the security.
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Trade Reporting And Compliance Engine - TRACE
- A program developed by the National Association of Securities Dealers (NASD) which allows for the reporting of over-the-counter (OTC) transactions pertaining to eligible fixed-income securities. Brokers, who are NASD members and deal with specific fixed-income securities, are required to report their transactions by Securities and Exchange Commission (SEC) rules.
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Trade Resumption
- To resume trading activities after having been shut down (halted) for some period of time. This can relate to trading between nations, or the resumption of open-market trading in a security such as a common stock or even an entire exchange.
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Trade Sanction
- A trade penalty imposed by one nation onto one or more other nations.
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Trade Surplus
- An economic measure of a positive balance of trade, where a country's exports exceeds its imports. A trade surplus represents a net inflow of domestic currency from foreign markets, and is the opposite of a trade deficit, which would represent a net outflow.
- An economic measure of a positive balance of trade, where a country's exports exceeds its imports. A trade surplus represents a net inflow of domestic currency from foreign markets, and is the opposite of a trade deficit, which would represent a net outflow.
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Trade Through
- A stock market order that is not executed at the best possible price according to quoted prices at other exchanges. Regulations to protect against trade-throughs were first passed in the 1970s and were later upgraded via Rule 611 of Regulation NMS, which passed in 2007.
Rule 611, otherwise known as the Order Protection Rule, aims to ensure that both institutional and retail investors get the best possible price for a given trade by comparing quotes on multiple exchanges. If a better price is quoted elsewhere, the trade must be routed there for execution, and not "traded through" at its current exchange.
- A stock market order that is not executed at the best possible price according to quoted prices at other exchanges. Regulations to protect against trade-throughs were first passed in the 1970s and were later upgraded via Rule 611 of Regulation NMS, which passed in 2007.
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Trade Volume Index - TVI
- A technical indicator that measures the amount of money flowing in and out of an asset. Unlike many technical indicators, the TVI is generally created using intraday price data. The underlying assumption of this indicator is that there is buying pressure when the price trades near the asking price and selling pressure when it trades near the bid.
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Trade War
- A negative side effect of protectionism that occurs when Country A raises tariffs on Country B's imports in retaliation for Country B raising tarrifs on Country A's imports. Trade wars may be instigated when one country perceives another country's trading practices to be unfair or when domestic trade unions pressure politicians to make imported goods less attractive to consumers. Trade wars are also a result of a misunderstanding of the widespread benefits of free trade.
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Trade Working Capital
- The difference between current assets and current liabilities directly associated with everyday business operations.
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Trade-Weighted Dollar
- A representation of the foreign currency price of the U.S. dollar or the export value of the U.S. dollar.
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Trademark
- A symbol, word, phrase, logo, or combination of these that legally distinguishes one company's product from any others. Any infringement on a trademark is illegal and therefore grounds for the company owning the trademark to sue the infringing party.
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Trader
- An individual who engages in the transfer of financial assets in any financial market, either for themselves, or on behalf of a someone else. The main difference between a trader and an investor is the duration for which the person holds the asset. Investors tend to have a longer term time horizon, whereas traders tend to hold assets for shorter periods of time in order to capitalize on short-term trends.
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Trading Account
- 1. An account similar to a traditional bank account, holding cash and securities, and is administered by an investment dealer.
2. An account held at a financial institution and administered by an investment dealer that the account holder uses to employ a trading strategy rather than a buy-and-hold investment strategy.
- 1. An account similar to a traditional bank account, holding cash and securities, and is administered by an investment dealer.
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Trading Ahead
- A trade transacted from a specialist's account even though there is a public order that offsets the trade.
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Trading Arcade
- A slang term for an electronic trading facility where local investors can get together and trade for their own accounts. The arcade is often run by a member of a clearing organization, and has no physical trading area or pit.
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Trading Authorization
- The level of power entrusted to a broker or agent granting specific levels of access to a client's account. Trading authorization dictates what actions an agent may perform, such as buying or selling. This is similar to the concept of power of attorney, but only deals with the client's trading account.
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Trading Below Cash
- When a company's total share value is less than its cash minus debts.
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Trading Book
- The portfolio of financial instruments held by a brokerage or bank. The financial instruments in the trading book are purchased or sold to facilitate trading for their customers, to profit from spreads between the bid/ask spread, or to hedge against various types of risk.
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Trading Channel
- When charting the price of an asset, this is the space on the chart between an asset's support and resistance levels. The price of the asset will stay within the support and resistance levels until a breakout occurs.
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Trading Curb
- A temporary restriction on program trading in a particular security or market, usually to reduce dramatic price movements. Also known as a collar or circuit breaker.
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Trading Desk
- A desk where transactions for buying and selling securities occur. Trading desks can be found in most organizations (banks, finance companies, etc.) involved in trading investment instruments such as equities, fixed-income securities, futures, commodities and foreign exchange. A trading desk provides traders with access to instantaneous trade executions. Also known as "dealing desk".
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Trading Dollars
- Slang for a company that is spending just as much money as it is making on a product that it develops.
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Trading Effect
- A measure of performance that examines the difference in returns between a bond portfolio and a chosen benchmark. This difference occurs as a result of short-term alterations in the portfolio's composition. The trading effect reveals whether trading activities benefited or hindered a portfolio's return.
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Trading Floor
- The floor where trading activities are conducted. Trading floors are found in the buildings of various exchanges, such as the New York Stock Exchange and the Chicago Board of Trade. These floors represent the area where traders complete the buying or selling of an asset.
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Trading Halt
- A temporary suspension in the trading of a particular security on one or more exchanges, usually in anticipation of a news announcement or to correct an order imbalance. A trading halt may also be imposed for purely regulatory reasons. During a trading halt, open orders may be canceled and options may be exercised.
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Trading Partner Agreement
- An agreement drawn up by two parties that have agreed to trade certain items or information to each other. The agreement outlines the terms of the trade or trading process, such as compensation for the shorted party in an inequitable trade. Trading Partner Agreements are often tailored for electronic transactions.
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Trading Range
- The spread between the high and low prices traded during a period of time.
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Trading Session
- A period of time consisting of one day of business in a financial market, from the opening bell to the closing bell. Within the time frame of the trading session, all orders for the day must be placed, and buyers and sellers both participate in setting current market prices.
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Traditional IRA
- An individual retirement account (IRA) that allows individuals to direct pretax income, up to specific annual limits, toward investments that can grow tax-deferred (no capital gains or dividend income is taxed). Individual taxpayers are allowed to contribute 100% of compensation up to a specified maximum dollar amount to their Traditional IRA. Contributions to the Traditional IRA may be tax-deductible depending on the taxpayer's income, tax-filing status and other factors.
Other variants of the IRA include the Roth IRA, SIMPLE IRA and SEP IRA.
- An individual retirement account (IRA) that allows individuals to direct pretax income, up to specific annual limits, toward investments that can grow tax-deferred (no capital gains or dividend income is taxed). Individual taxpayers are allowed to contribute 100% of compensation up to a specified maximum dollar amount to their Traditional IRA. Contributions to the Traditional IRA may be tax-deductible depending on the taxpayer's income, tax-filing status and other factors.
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Traditional Whole Life Policy
- A type of life insurance contract that provides for insurance coverage of the contract holder for his/her entire life. Unlike term life insurance, which covers the contract holder until a specified age limit, a traditional whole life policy never runs out. Upon the inevitable death of the contract holder, the insurance payout is made to the contract's beneficiaries. These policies also include an investment component, which accumulates a cash value that the policyholder can withdraw or borrow against.
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Trailer Fee
- A fee that a mutual fund manager pays to a salesperson who sells the fund to investors. The trailer fee pays the salesperson for providing the investor with ongoing investment advice and services.
Also known as a "trailer commission".
- A fee that a mutual fund manager pays to a salesperson who sells the fund to investors. The trailer fee pays the salesperson for providing the investor with ongoing investment advice and services.
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Trailing
- A term used to describe the most recent time period.
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Trailing EPS
- The sum of a company's earnings per share for the previous four quarters.
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Trailing Price-To-Earnings - Trailing P/E
- The sum of a company's price-to-earnings, calculated by taking the current stock price and dividing it by the trailing earnings per share for the past 12 months. This measure differs from forward P/E, which uses earnings estimates for the next four quarters.
The trailing P/E ratio is calculated as follows:
- The sum of a company's price-to-earnings, calculated by taking the current stock price and dividing it by the trailing earnings per share for the past 12 months. This measure differs from forward P/E, which uses earnings estimates for the next four quarters.
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Trailing Stop
- A stop-loss order set at a percentage level below the market price - for a long position. The trailing stop price is adjusted as the price fluctuates. The trailing stop order can be placed as a trailing stop limit order, or a trailing stop market order.
Also known as a Trailing Stop Order.
- A stop-loss order set at a percentage level below the market price - for a long position. The trailing stop price is adjusted as the price fluctuates. The trailing stop order can be placed as a trailing stop limit order, or a trailing stop market order.
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Trailing Twelve Months - TTM
- The timeframe of the past twelve months (the past year) used for reporting financial figures.
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Tranches
- A piece, portion or slice of a deal or structured financing. This portion is one of several related securities that are offered at the same time but have different risks, rewards and/or maturities. "Tranche" is the French word for "slice".
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Tranportation And Storage Costs
- An moving expense deduction related to the costs of a taxpayer's relocation. Transportation and storage costs include the cost of moving and storing the taxpayer's possessions.
The type of property with deductible costs includes furniture, vehicles, pets and personal belongings. The cost of storing the taxpayer's belongings during the relocation process is deductible for the first 30 days.
- An moving expense deduction related to the costs of a taxpayer's relocation. Transportation and storage costs include the cost of moving and storing the taxpayer's possessions.
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Transaction
- An agreement between a buyer and a seller for the exchange of goods or services for payment.
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Transaction Costs
- Costs incurred when buying or selling securities. These include brokers' commissions and spreads (the difference between the price the dealer paid for a security and the price at which it can be sold).
Also referred to as "transaction fees."
- Costs incurred when buying or selling securities. These include brokers' commissions and spreads (the difference between the price the dealer paid for a security and the price at which it can be sold).
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Transaction Deposit
- A banking deposit that has immediate and full liquidity, with no delays or waiting periods. Transaction deposits can be transferred into other cash instruments, have electronic payments authorized against them, or otherwise be transacted by the financial institution solely at the request of the account holder.
- A banking deposit that has immediate and full liquidity, with no delays or waiting periods. Transaction deposits can be transferred into other cash instruments, have electronic payments authorized against them, or otherwise be transacted by the financial institution solely at the request of the account holder.
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Transaction Exposure
- The risk, faced by companies involved in international trade, that currency exchange rates will change after the companies have already entered into financial obligations. Such exposure to fluctuating exchange rates can lead to major losses for firms.
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Transaction Risk
- The exchange rate risk associated with the time delay between entering into a contract and settling it. The greater the time differential between the entrance and settlement of the contract, the greater the transaction risk, because there is more time for the two exchange rates to fluctuate.
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Transfer
- A tax-free, non-reportable movement of assets between retirement plans.
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Transfer Agent
- A trust company, bank or similar financial institution assigned by a corporation to maintain records of investors and account balances and transactions, to cancel and issue certificates, to process investor mailings and to deal with any associated problems (i.e. lost or stolen certificates).
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Transfer Of Physical Assets - TPA
- A type of property sale that requires the assumption of a HUD-sponsored loan. A transfer of physical assets (TPA) can require many other forms to be completed, such as the Assumption of Housing Assistance Payments (HAP) contract. TPAs pertain only to HUD loans and are not applicable to commercial loans.
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Transfer Of Risk
- The underlying tenet behind insurance transactions. The purpose of this action is to take a specific risk, which is detailed in the insurance contract, and pass it from one party who does not wish to have this risk (the insured) to a party who is willing to take on the risk for a fee, or premium (the insurer).
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Transfer On Death - TOD
- A way of designating beneficiaries to receive your assets at the time of your death without having to go through probate. This designation also allows you to specify the percentage of assets each person or entity (your "TOD beneficiary") will receive. Your assets will then be automatically transferred to the designated beneficiaries upon your death.
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Transfer Payment
- 1. In the United States, a payment made to individuals by the federal government through various social benefit programs.
2. In Canada, a payment made to the provinces and territories by the federal government.
- 1. In the United States, a payment made to individuals by the federal government through various social benefit programs.
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Transfer Price
- The price at which divisions of a company transact with each other. Transactions may include the trade of supplies or labor between departments. Transfer prices are used when individual entities of a larger multi-entity firm are treated and measured as separately run entities.
Also known as "transfer cost".
- The price at which divisions of a company transact with each other. Transactions may include the trade of supplies or labor between departments. Transfer prices are used when individual entities of a larger multi-entity firm are treated and measured as separately run entities.
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Transfer Procedures
- The procedure by which ownership of a stock moves from one party to another. The transfer agent follows a detailed, documented series of steps governed by the SEC to ensure that a transaction has been completed.
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Transfer Tax
- Any kind of tax that is levied on the transfer of official documents or other property. Transfer tax is paid by the seller of the property. Gift and estate taxes are both transfer taxes.
Transfer tax is also known as "excise tax" in some states.
- Any kind of tax that is levied on the transfer of official documents or other property. Transfer tax is paid by the seller of the property. Gift and estate taxes are both transfer taxes.
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Transferable Insurance Policies - TIPS
- A life insurance policy which allows for the transferable assignment of the benefactor. In a Transferable Insurance Policy, the owner sells the policy to an investor at a discount to the face value of the insurance. The purchaser, who becomes the benefactor of the policy, will pay all subsequent premiums and receive the settlement value when the insured person becomes deceased.
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Translation Exposure
- The risk that a company's equities, assets, liabilities or income will change in value as a result of exchange rate changes. This occurs when a firm denominates a portion of its equities, assets, liabilities or income in a foreign currency.
Also known as "accounting exposure".
- The risk that a company's equities, assets, liabilities or income will change in value as a result of exchange rate changes. This occurs when a firm denominates a portion of its equities, assets, liabilities or income in a foreign currency.
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Translation Risk
- The exchange rate risk associated with companies that deal in foreign currencies or list foreign assets on their balance sheets. The greater the proportion of asset, liability and equity classes denominated in a foreign currency, the greater the translation risk.
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Transparency
- The extent to which investors have ready access to any required financial information about a company such as price levels, market depth and audited financial reports. Classically defined as when "much is known by many", transparency is one of the silent prerequisites of any free and efficient market.
When transparency relates to information flow from the company to investors, it is also known as "full disclosure".
- The extent to which investors have ready access to any required financial information about a company such as price levels, market depth and audited financial reports. Classically defined as when "much is known by many", transparency is one of the silent prerequisites of any free and efficient market.
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Transportation Expenses
- A business expense incurred by an employee or self-employed taxpayer while away from home in a travel status.
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Transportation Sector
- A category of stocks relating to the transportation of goods or customers. The transportation sector is made up of airlines, railroads and trucking companies.
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Traunch
- One of many influxes of cash that is part of a single round of investment.
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Travel Expenses
- Business expenses incurred while an individual is away from home. These include meals, lodging, and transportation expenses.
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Traveler's Check
- A medium of exchange that can be used in place of hard currency. Travelers' checks are often used by individuals who are traveling on vacation to foreign countries. The checks were first introduced by American Express back in 1891.
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Treasury Automated Auction Processing System - TAAPS
- A computer network system developed by the Federal Reserve (and facilitated by its banks) to process the tenders received for treasury securities. The treasury securities are traded through an auction process in the primary market. Tenders are received by TAAPS from brokers wishing to purchase marketable securities. Each bid is processed and reviewed automatically by TAAPS to ensure it is in compliance with the Treasury's Uniform Offering Circular.
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Treasury Bill - T-Bill
- A short-term debt obligation backed by the U.S. government with a maturity of less than one year. T-bills are sold in denominations of $1,000 up to a maximum purchase of $5 million and commonly have maturities of one month (four weeks), three months (13 weeks) or six months (26 weeks).
T-bills are issued through a competitive bidding process at a discount from par, which means that rather than paying fixed interest payments like conventional bonds, the appreciation of the bond provides the return to the holder.
- A short-term debt obligation backed by the U.S. government with a maturity of less than one year. T-bills are sold in denominations of $1,000 up to a maximum purchase of $5 million and commonly have maturities of one month (four weeks), three months (13 weeks) or six months (26 weeks).
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Treasury Bond - T-Bond
- A marketable, fixed-interest U.S. government debt security with a maturity of more than 10 years. Treasury bonds make interest payments semi-annually and the income that holders receive is only taxed at the federal level.
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Treasury Budget
- Data released by the U.S. Treasury on a monthly basis that accounts for the surpluses or deficits of the federal government. Treasury budget data tracks the changes in monthly balances as an indicator of budget trends and the direction of fiscal policy.
The annual Treasury budget process starts in January and is usually proposed in April as the President's Budget.
- Data released by the U.S. Treasury on a monthly basis that accounts for the surpluses or deficits of the federal government. Treasury budget data tracks the changes in monthly balances as an indicator of budget trends and the direction of fiscal policy.
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Treasury Direct
- The market where investors can purchase treasury securities directly from the federal government Treasury. This trading system eliminates brokers and dealers, and is conducted through Federal Reserve Banks. Tenders can be made either on a competitive or non-competitive basis.
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Treasury DRIP
- A dividend reinvestment plan that uses dividends to purchase more shares directly from the company's treasury stock. Oftentimes, because the company is issuing the shares, it will offer the shareholder a small discount on the share price; this discount typically ranges from 2-4%.
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Treasury Index
- An index based on the auctions of U.S. Treasury bills, or on the U.S. Treasury's daily yield curve. It is commonly used in determining mortgage rates for mortgages with an unfixed component and as a performance benchmark for investors in the capital markets as it represents a rate of return that investors would be able to get from almost any bank, with minimal effort. Treasury indexes are proprietary. The calculations of treasury indexes and their components vary by the financial institution calculating the index.
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Treasury International Capital - TIC
- Select groups of capital which are monitored with regards to their international movement. Treasury international capital is used as an economic indicator that tracks the flow of Treasury and agency securities, as well as corporate bonds and equities, into and out of the United States. TIC data is important to investors, especially with the increasing amount of foreign participation in the U.S. financial markets.
- Select groups of capital which are monitored with regards to their international movement. Treasury international capital is used as an economic indicator that tracks the flow of Treasury and agency securities, as well as corporate bonds and equities, into and out of the United States. TIC data is important to investors, especially with the increasing amount of foreign participation in the U.S. financial markets.
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Treasury Investment Growth Receipts - TIGRs
- Stripped Treasury securities offered at a significant discount to face value and backed by the U.S. government. TIGRs were introduced by Merrill Lynch and were originally issued between 1982 and 1986. TIGR bonds were discontinued when the U.S. government began issuing public STRIPS in 1986.
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Treasury Lock
- A customized derivative security used by investors to lock in the yield or price of a treasury security.
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Treasury Note
- A marketable U.S. government debt security with a fixed interest rate and a maturity between one and 10 years. Treasury notes can be bought either directly from the U.S. government or through a bank.
When buying Treasury notes from the government, you can either put in a competitive or noncompetitive bid. With a competitive bid, you specify the yield you want; however, this does not mean that your bid will be approved. With a noncompetitive bid, you accept whatever yield is determined at auction.
- A marketable U.S. government debt security with a fixed interest rate and a maturity between one and 10 years. Treasury notes can be bought either directly from the U.S. government or through a bank.
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Treasury Offering
- The issuance of an additional class of security already existing in a firm's treasury.
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Treasury Receipt
- A zero-coupon bond issued by a brokerage firm and collateralized by treasury securities held for the investor by a custodian.
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Treasury Secretary
- The Secretary of the Treasury is a member of the Presidential cabinet. This person is the acting head of the Department of the Treasury, and deals with all financial and monetary matters directly relating to the government. The secretary is the principal economic advisor of the President and plays a major role in formulating economic policy.
- The Secretary of the Treasury is a member of the Presidential cabinet. This person is the acting head of the Department of the Treasury, and deals with all financial and monetary matters directly relating to the government. The secretary is the principal economic advisor of the President and plays a major role in formulating economic policy.
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Treasury Stock (Treasury Shares)
- The portion of shares that a company keeps in their own treasury. Treasury stock may have come from a repurchase or buyback from shareholders; or it may have never been issued to the public in the first place. These shares don't pay dividends, have no voting rights, and should not be included in shares outstanding calculations.
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Treasury Stock Method
- The component of the diluted earnings per share denominator that includes the net of new shares potentially created by unexercised in-the-money warrants and options. This method assumes that the proceeds that a company receives from an in-the-money option exercise are used to repurchase common shares in the market.
In order to comply with generally accepted accounting principles (GAAP), the treasury stock method must be used by a company when computing its diluted earnings per share (EPS).
- The component of the diluted earnings per share denominator that includes the net of new shares potentially created by unexercised in-the-money warrants and options. This method assumes that the proceeds that a company receives from an in-the-money option exercise are used to repurchase common shares in the market.
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Treasury STRIPS
- An acronym for 'separate trading of registered interest and principal securities'. Treasury STRIPS are fixed-income securities sold at a significant discount to face value and offer no interest payments because they mature at par.
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Treble Damages
- A law that permits a court to triple the amount of damages awarded in cases where the defendant willfully acted in a prohibited way. Usually a court will require substantial evidence proving that the defendant's actions were willful in nature or done in bad faith before treble damages are awarded.
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Tree Diagram
- A diagram used in strategic decision making, valuation or probability calculations. The diagram starts at a single node, with branches emanating to additional nodes, which represent mutually exclusive decisions or events. In the diagram below, the analysis will begin at the first blank node. A decision or event will then lead to node A or B. From these secondary nodes, additional decisions or events will occur leading to the third level of nodes, until a final conclusion is reached.
- A diagram used in strategic decision making, valuation or probability calculations. The diagram starts at a single node, with branches emanating to additional nodes, which represent mutually exclusive decisions or events. In the diagram below, the analysis will begin at the first blank node. A decision or event will then lead to node A or B. From these secondary nodes, additional decisions or events will occur leading to the third level of nodes, until a final conclusion is reached.
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Trend
- The general direction of a market or of the price of an asset. Trends can vary in length from short, to intermediate, to long term. If you can identify a trend, it can be highly profitable, because you will be able to trade with the trend.
- The general direction of a market or of the price of an asset. Trends can vary in length from short, to intermediate, to long term. If you can identify a trend, it can be highly profitable, because you will be able to trade with the trend.
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Trend Analysis
- An aspect of technical analysis that tries to predict the future movement of a stock based on past data. Trend analysis is based on the idea that what has happened in the past gives traders an idea of what will happen in the future.
There are three main types of trends: short-, intermediate- and long-term.
- An aspect of technical analysis that tries to predict the future movement of a stock based on past data. Trend analysis is based on the idea that what has happened in the past gives traders an idea of what will happen in the future.
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Trend Trading
- A trading strategy that attempts to capture gains through the analysis of an asset's momentum in a particular direction. The trend trader enters into a long position when a stock is trending upward (successively higher highs). Conversely, a short position is taken when the stock is in a down trend (successively lower highs).
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Trendline
- A line that is drawn over pivot highs or under pivot lows to show the prevailing direction of price. Trendlines are a visual representation of support and resistance in any time frame.
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Treynor Ratio
- A ratio developed by Jack Treynor that measures returns earned in excess of that which could have been earned on a riskless investment per each unit of market risk.
The Treynor ratio is calculated as:
(Average Return of the Portfolio - Average Return of the Risk-Free Rate) / Beta of the Portfolio
- A ratio developed by Jack Treynor that measures returns earned in excess of that which could have been earned on a riskless investment per each unit of market risk.
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Treynor-Black Model
- A type of asset allocation model that was developed by Jack Treynor and Fischer Black. The model tries to determine the optimal combination of passively and actively managed assets in an investment portfolio.When determining the optimal allocation of assets, the model focuses primarily on securities' systematic and unsystematic risk.
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Tri-Party Agreement
- A business agreement between three separate parties. In the mortgage industry, a contract involving the buyer, the primary lender plus a construction lender. This type of contract is commonly used to secure bridge loans for the construction of a home or other real estate.
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Tri-Star
- A type of candlestick pattern that signals a reversal in the current trend. This pattern is formed when three consecutive doji candlesticks appear at the end of a prolonged trend.
The chart below illustrates a bearish tri-star pattern at the top of the uptrend and is used to mark the beginning of a shift in momentum.
- A type of candlestick pattern that signals a reversal in the current trend. This pattern is formed when three consecutive doji candlesticks appear at the end of a prolonged trend.
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Triage
- A process-management term predominantly seen in hospital and healthcare settings that can also apply to different types of business process or workflow situations. Triage refers to the practice of dividing incoming work or customers into different levels of priority so that the highest-priority issues are handled first, while lower-priority issues are stationed lower on the to-do list.
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Trial Balance
- A bookkeeping worksheet in which the balances of all ledgers are compiled into debit and credit columns. A company prepares a trial balance periodically, usually at the end of every reporting period. The general purpose of producing a trial balance is to ensure the entries in a company's bookkeeping system are mathematically correct.
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Triangle
- A technical analysis pattern created by drawing trendlines along a price range that gets narrower over time because of lower tops and higher bottoms. Variations of a triangle include ascending and descending triangles. Triangles are very similar to wedges and pennants.
- A technical analysis pattern created by drawing trendlines along a price range that gets narrower over time because of lower tops and higher bottoms. Variations of a triangle include ascending and descending triangles. Triangles are very similar to wedges and pennants.
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Triangular Arbitrage
- The process of converting one currency to another, converting it again to a third currency and, finally, converting it back to the original currency within a short time span. This opportunity for riskless profit arises when the currency's exchange rates do not exactly match up. Triangular arbitrage opportunities do not happen very often and when they do, they only last for a matter of seconds. Traders that take advantage of this type of arbitrage opportunity usually have advanced computer equipment and/or programs to automate the process.
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Trickle Down Theory
- An economic theory which states that investing money in companies and giving them tax breaks is the best way to stimulate the economy.
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Trigger Line
- A moving-average line found in the moving average convergence divergence (MACD) theory, which is used to signal buy or sell points for a security. The trigger line interacts with the two moving averages that form the MACD line and attempts to predict upcoming trends.
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Triggering Event
- 1. A tangible or intangible barrier or occurrence that, once breached or met, causes another event to occur. Triggering events are written into contracts to prevent or ensure that after a given occurrence, the terms of the original agreement are abandoned or changed to suit the party that included the triggering event in the agreement.
2. A certain milestone or event that a participant in a qualified plan must experience in order to be eligible to receive a distribution from a qualified plan.
- 1. A tangible or intangible barrier or occurrence that, once breached or met, causes another event to occur. Triggering events are written into contracts to prevent or ensure that after a given occurrence, the terms of the original agreement are abandoned or changed to suit the party that included the triggering event in the agreement.
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Triggering Term
- A word or phrase that when used in advertising literature requires the presentation of the terms of a credit agreement so that individuals can compare credit offers on a fair and equal basis.
Open-end and closed-end credit each have a set of triggering terms associated with them; if a single one is used in advertising material, then the full set of credit terms must also be displayed so as not to confuse or deceive consumers.
Triggering terms are set and monitored by the Federal Trade Commission, in the United States.
- A word or phrase that when used in advertising literature requires the presentation of the terms of a credit agreement so that individuals can compare credit offers on a fair and equal basis.
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Trilateral Commission
- From the site at Trilateral.org:
The Trilateral Commission is a non-governmental policy-oriented discussion group of about 325 distinguished citizens from North America, the European Union, and Japan which seeks to foster mutual issues for which these principal democratic industrialized regions share leadership responsibilities.
- From the site at Trilateral.org:
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Trimmed Mean
- A method of averaging that removes a small percentage of the largest and smallest values before calculating the mean. After removing the specified observations, the trimmed mean is found using an arithmetic averaging formula.
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TRIN
- Short for TRaders INdex. A technical analysis indicator calculated by taking the advances-to-declines spread and dividing that by the volume of advances to declines.
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Trinomial Option Pricing Model
- An option pricing model incorporating three possible values that an underlying asset can have in one time period. The three possible values the underlying asset can have in a time period may be greater than, the same as, or less than the current value.
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Triple Bottom
- A pattern used in technical analysis to predict the reversal of a prolonged downtrend. The pattern is identified when the price of an asset creates three troughs at nearly the same price level. The third bounce off the support is an indication that buying interest (demand) is outweighing selling interest (supply) and that the trend is in the process of reversing.
- A pattern used in technical analysis to predict the reversal of a prolonged downtrend. The pattern is identified when the price of an asset creates three troughs at nearly the same price level. The third bounce off the support is an indication that buying interest (demand) is outweighing selling interest (supply) and that the trend is in the process of reversing.
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Triple Net Lease
- A lease agreement that designates the lessee (the tenant) as being solely responsible for all of the costs relating to the asset being leased in addition to the rent fee applied under the lease. The structure of this type of lease requires the lessee to pay for net real estate taxes on the leased asset, net building insurance and net common area maintenance. The lessee has to pay the net amount of three types of costs, which how this term got its name.
This type of lease can also be referred to as a "net-net-net lease" or a "hell or high water lease".
- A lease agreement that designates the lessee (the tenant) as being solely responsible for all of the costs relating to the asset being leased in addition to the rent fee applied under the lease. The structure of this type of lease requires the lessee to pay for net real estate taxes on the leased asset, net building insurance and net common area maintenance. The lessee has to pay the net amount of three types of costs, which how this term got its name.
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Triple Top
- A pattern used in technical analysis to predict the reversal of a prolonged uptrend. This pattern is identified when the price of an asset creates three peaks at nearly the same price level. The bounce off the resistance near the third peak is a clear indication that buying interest is becoming exhausted. It is used by traders to predict the reversal of the uptrend.
- A pattern used in technical analysis to predict the reversal of a prolonged uptrend. This pattern is identified when the price of an asset creates three peaks at nearly the same price level. The bounce off the resistance near the third peak is a clear indication that buying interest is becoming exhausted. It is used by traders to predict the reversal of the uptrend.
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Triple Witching
- An event that occurs when the contracts for stock index futures, stock index options and stock options all expire on the same day. Triple witching days happen four times a year on the third Friday of March, June, September and December.
This phenomenon is sometimes referred to as "freaky Friday".
- An event that occurs when the contracts for stock index futures, stock index options and stock options all expire on the same day. Triple witching days happen four times a year on the third Friday of March, June, September and December.
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Triple-Tax-Free
- An investment (usually a municipal bond) featuring interest payments that are exempt from taxes at the municipal, state and federal levels. Also known as "triple tax-exempt".
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Troubled Asset Relief Program - TARP
- A government program created for the establishment and management of a Treasury fund, in an attempt to curb the ongoing financial crisis of 2007-2008. The TARP gives the U.S. Treasury purchasing power of $700 billion to buy up mortgage backed securities (MBS) from institutions across the country, in an attempt to create liquidity and un-seize the money markets. The fund was created by a bill that was made law on October 3, 2008 with the passage of H.R. 1424 enacting the Emergency Economic Stabilization Act of 2008. The Treasury will be given $250 billion immediately, and the President must certify additional funds as they are needed. The additional funds will be distributed as $100 billion, and then as the final $350 billion is given, Congress has the right to not approve the additional amounts.
- A government program created for the establishment and management of a Treasury fund, in an attempt to curb the ongoing financial crisis of 2007-2008. The TARP gives the U.S. Treasury purchasing power of $700 billion to buy up mortgage backed securities (MBS) from institutions across the country, in an attempt to create liquidity and un-seize the money markets. The fund was created by a bill that was made law on October 3, 2008 with the passage of H.R. 1424 enacting the Emergency Economic Stabilization Act of 2008. The Treasury will be given $250 billion immediately, and the President must certify additional funds as they are needed. The additional funds will be distributed as $100 billion, and then as the final $350 billion is given, Congress has the right to not approve the additional amounts.
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Trough
- The stage of the economy's business cycle that marks the end of a period of declining business activity and the transition to expansion.
- The stage of the economy's business cycle that marks the end of a period of declining business activity and the transition to expansion.
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Troy Ounce
- A unit of measure for weight that dates back to the Middle Ages. Originally used in Troyes, France, the troy ounce was used when dealing with precious metals. One troy ounce is equal to 31.1034768 grams.
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True Cost Economics
- An economic model that seeks to include the cost of negative externalities into the pricing of goods and services. Supporters of this type of economic system feel products and activities that direct or indirectly cause harmful consequences to living beings and/or the environment should be accordingly taxed to reflect the somewhat hidden costs.
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True Strength Index - TSI
- A technical momentum indicator that helps traders determine overbought and oversold conditions of a security by incorporating the short-term purchasing momentum of the market with the lagging benefits of moving averages. Generally a 25-day exponential moving average (EMA) is applied to the difference between two share prices, and then a 13-day EMA is applied to the result, making the indicator more sensitive to prevailing market conditions. After the data is smoothed, some calculations are done to make the indicator fall in a range from +100 to -100, or from +1 to -1.
- A technical momentum indicator that helps traders determine overbought and oversold conditions of a security by incorporating the short-term purchasing momentum of the market with the lagging benefits of moving averages. Generally a 25-day exponential moving average (EMA) is applied to the difference between two share prices, and then a 13-day EMA is applied to the result, making the indicator more sensitive to prevailing market conditions. After the data is smoothed, some calculations are done to make the indicator fall in a range from +100 to -100, or from +1 to -1.
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Trust
- A fiduciary relationship in which one party, known as a trustor, gives another party, the trustee, the right to hold title to property or assets for the benefit of a third party, the beneficiary.
There are two types of trusts:
1. Living Trust (inter-vivos): A trust that is in effect during the trustor's lifetime.
2. Testamentary Trust: A trust that is created through the will of a deceased person.
- A fiduciary relationship in which one party, known as a trustor, gives another party, the trustee, the right to hold title to property or assets for the benefit of a third party, the beneficiary.
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Trust Certificate
- A bond or debt investment, usually in a public corporation, that is backed by other assets which serve a purpose similar to collateral. If the company experiences difficulty making payments, the assets may be seized or sold to help specific trust certificate holders recover a portion of their investment. The potential type of company assets used to create a trust certificate can vary, but most typically are other shares of company stock or physical equipment.
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Trust Company
- A legal entity that acts as fiduciary, agent or trustee on behalf of a person or business entity for the purpose of administration, management and the eventual transfer of assets to a beneficial party. The entity acts as a custodian for trusts, estates, custodial arrangements, asset management, stock transfer, beneficial ownership registration and other related arrangements. A trust company does not own the assets its customers assign to its management, but it may assume some legal obligation to take care of assets on behalf of other parties.
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Trust Deed
- 1. A formal document which outlines the terms of a trust agreement.
2. A common way to structure real estate purchases, where the title to a property is held in trust until the loan for the property is paid.
- 1. A formal document which outlines the terms of a trust agreement.
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Trust Indenture
- An agreement in the bond contract made between a bond issuer and a trustee that represents the bondholder's interests by highlighting the rules and responsibilities that each party must adhere to. It may also indicate where the income stream for the bond is derived from.
Trust indentures may not be included in every bond contract, as some government bonds disclose similar information (the duties and rights of the issuer and bondholders) in a document called the bond resolution.
- An agreement in the bond contract made between a bond issuer and a trustee that represents the bondholder's interests by highlighting the rules and responsibilities that each party must adhere to. It may also indicate where the income stream for the bond is derived from.
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Trust Indenture Act of 1939
- A law passed in 1939 that prohibits bond issues valued at over $5 million from being offered for sale without a formal written agreement (an indenture), signed by both the bond issuer and the bondholder, that fully discloses the particulars of the bond issue. The act also requires that a trustee be appointed for all bond issues, so that the rights of bondholders are not compromised.
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Trust Preferred Securities - TruPS
- A security similar to debentures and preferreds that is generally longer term, has early redemption features, makes quarterly fixed interest payments, and matures at face value.
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Trust Receipt
- Notice of the release merchandise to a buyer from a bank, with the bank retaining the ownership title to the released assets. In an arrangement involving a trust receipt, the bank remains the owner of the merchandise, but the buyer is allowed to hold the merchandise in trust for the bank, for manufacturing or sales purposes.
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Trust-Owned Life Insurance - TOLI
- Life insurance that resides inside a trust. Trust-owned life insurance is used by many high net worth individuals as the cornerstone of their estate plan. It enables the trust to provide for survivors, cover estate tax liability planning, balance inheritances among heirs and meet charitable objectives.
- Life insurance that resides inside a trust. Trust-owned life insurance is used by many high net worth individuals as the cornerstone of their estate plan. It enables the trust to provide for survivors, cover estate tax liability planning, balance inheritances among heirs and meet charitable objectives.
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Trustee
- An individual who holds or manages assets for the benefit of another.
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Trustor
- An individual or organization that gifts funds or assets to others by transferring fiduciary duty to a third party trustee that will maintain the assets for the benefit of the beneficiaries.
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Truth In Lending Act - TILA
- A federal law enacted in 1968 with the intention of protecting consumers in their dealings with lenders and creditors. The Truth in Lending Act was implemented by the Federal Reserve through a series of regulations.
The most important aspects of the act concern the pieces of information that must be disclosed to a borrower prior to extending credit: annual percentage rate (APR), term of the loan and total costs to the borrower. This information must be conspicuous on documents presented to the consumer before signing, and also possibly on periodic billing statements.
- A federal law enacted in 1968 with the intention of protecting consumers in their dealings with lenders and creditors. The Truth in Lending Act was implemented by the Federal Reserve through a series of regulations.
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TRY (Turkish New Lira)
- The currency abbreviation for the Turkish new lira (TRY), the currency for Turkey and the Turkish Republic of Northern Cyprus. The Turkish new lira is made up of 100 new kurus and is often presented with the symbol YTL.
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TSX Venture Exchange
- Originally called the Canadian Venture Exchange (CDNX), this was a result of the merger of the Vancouver and Alberta stock exchanges. The goal of TSX Venture Exchange is to provide venture companies with effective access to capital while protecting investors.
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TTD (Trinidad and Tobago Dollar)
- The currency abbreviation for the Trinidad and Tobago dollar (TTD), the currency for Trinidad and Tobago. The Trinidad and Tobago dollar is made up of 100 cents and is often presented with the symbol TT$ to differentiate it from other currencies that are also denominated in dollars.
- The currency abbreviation for the Trinidad and Tobago dollar (TTD), the currency for Trinidad and Tobago. The Trinidad and Tobago dollar is made up of 100 cents and is often presented with the symbol TT$ to differentiate it from other currencies that are also denominated in dollars.
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Tuck School Of Business
- This is one of America's most prestigious graduate schools and is located at Dartmouth College in Hanover, New Hampshire. The Amos Tuck School of Business Administration was founded in 1900 and is considered one of the oldest graduate schools of business in the world, and was the first such institution to offer a master's degree in business administration.
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Tuck-In Acquisition
- The acquisition of a company made for the sole purpose of merging it into a division of the acquirer. Sometimes referred to as "bolt-on acquisitions."
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Tuition Insurance
- A type of insurance that allows families to recoup some or all the tuition paid should their child leave school midway through the semester. Tuition insurance is usually offered for students in elementary and secondary schools. Some companies also offer tuition insurance to students in public and private colleges. To file a claim for reimbursement, parents and students have to prove that the reason for withdrawing from school meets certain conditions, which might include job loss, illness, etc. Different schools have different conditions that must be met before a reimbursement claim can be honored and is the duty of the students and parents to be aware of these conditions.
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Tunneling
- An illegal business practice in which a majority shareholder or high-level company insider directs company assets or future business to themselves for personal gain. Actions such as excessive executive compensation, dilutive share measures, asset sales and personal loan guarantees can all be considered tunneling. The common thread is the loss to the minority shareholders, whose ownership is lessened or otherwise devalued through inappropriate actions that harm the overall value of the business.
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Turkey
- Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities that realize significant losses and unsuccessful initial public offerings (IPOs) could all be called "turkeys".
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Turnaround
- A situation where a company, who has had poor performance for an extended period of time, experiences a positive reversal.
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Turnkey Business
- A situation where the high level management of a firm is in charge of the planning and execution of all business strategy.
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Turnkey Solution
- A type of system that can be easily implemented into current business processes. A turnkey solution is immediately ready to use upon implementation and is designed to fulfill a certain process such as billing, website design, training or content management.
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Turnover
- 1. In accounting, the number of times an asset is replaced during a financial period.
2. The number of shares traded for a period as a percentage of the total shares in a portfolio or of an exchange.
- 1. In accounting, the number of times an asset is replaced during a financial period.
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Turnover Ratio
- The percentage of a mutual fund or other investment vehicle's holdings that have been "turned over" or replaced with other holdings in a given year. The type of mutual fund, its investment objective and/or the portfolio manager's investing style will play an important role in determining its turnover ratio.
- The percentage of a mutual fund or other investment vehicle's holdings that have been "turned over" or replaced with other holdings in a given year. The type of mutual fund, its investment objective and/or the portfolio manager's investing style will play an important role in determining its turnover ratio.
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Turtle
- A nickname given to a group of traders who were a part of an 1983 experiment run by two famous commodity traders, Richard Dennis and Bill Eckhardt. The goal of the study was to prove whether being a great trader was a genetic predisposition or whether it could be taught. Dennis believed that a person could be trained while Eckhardt thought it was an innate skill.
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Turtle Channel
A trading band created by plotting the highest and lowest prices of an asset over a certain time period around the price of that asset.
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TWD (Taiwan Dollar)
- The currency abbreviation for the Taiwan dollar (TWD), the currency for the Republic of China within Taiwan, Pescadores, Kinmnet and Matsu. The Taiwan dollar is made up of 10 jiao, and 100 fen, and is often presented with the symbol NT$.
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Tweezer
- A pattern found in technical analysis of options trading. Tweezer patterns occur when two or more candlesticks touch the same bottom for a tweezer bottom pattern or top for a tweezer top pattern. This type of pattern can be made with candlestick charts of various types.
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Twinternship
- An internship in which the intern is charged with using social media such as Twitter and Facebook to drive attention to a company and its products. A twinternship is usually an unpaid (although paid positions are not uncommon), temporary position in which a "twintern" will use popular social media outlets to publicize products and promotions for a business.
Also known as a "brand advocate".
- An internship in which the intern is charged with using social media such as Twitter and Facebook to drive attention to a company and its products. A twinternship is usually an unpaid (although paid positions are not uncommon), temporary position in which a "twintern" will use popular social media outlets to publicize products and promotions for a business.
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Two And Twenty
- A type of compensation structure that hedge fund managers typically employ in which part of compensation is performance based. More specifically, this phrase refers to how hedge fund managers charge a flat 2% of total asset value as a management fee and an additional 20% of any profits earned.
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Two Dollar Broker
- A floor broker who executes orders for other brokers who cannot do it themselves because they have more business than they can handle at that particular time.
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Two-Sided Market
- A market in which market makers (or specialists) are required to give both a firm bid and firm ask for each security in which they make a market. In other words, those making the market must be willing to both buy and sell at the prices they quote.
Also known as a "two-way market".
- A market in which market makers (or specialists) are required to give both a firm bid and firm ask for each security in which they make a market. In other words, those making the market must be willing to both buy and sell at the prices they quote.
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Two-Step Earnings
- A slang reference to two companies whose earnings tend to move in tandem. The earnings for the companies tend to increase in a slow-slow, quick-quick fashion.
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Two-Step Mortgage
- A mortgage that offers an initial fixed-interest rate for a period of time (usually 5 or 7 years) after which, at a predetermined date, the interest rate adjusts according to current market rates. At the adjustment date, the borrower might have the option of choosing between a fixed-interest rate (based on current market rates) for the remaining term of the mortgage, or a variable interest rate structure for the remaining term of the mortgage.
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Two-Way Quote
- A type of quote that gives both the bid and the ask price of a security, informing would-be traders of the current price at which they could buy or sell the security. The two-way quote also shows the spread between the bid and the ask, giving traders an idea of the current liquidity in the security (a smaller spread indicates more liquidity).
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Type I Error
- A type of error that occurs when a null hypothesis is rejected although it is true. The error accepts the alternative hypothesis, despite it being attributed to chance.
Also referred to as a "false positive".
- A type of error that occurs when a null hypothesis is rejected although it is true. The error accepts the alternative hypothesis, despite it being attributed to chance.
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Type II Error
- A statistical term used within the context of hypothesis testing that describes the error that occurs when one accepts a null hypothesis that is actually false. The error rejects the alternative hypothesis, even though it does not occur due to chance.
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TZS (Tanzanian Shilling)
- The currency abbreviation for the Tanzanian shilling (TZS), the currency for Tanzania. The Tanzanian shilling is made up of 100 senti (Swahili for cents), and is often presented in the form x/y. In the x/y form, the x is the amount in shillings and y is the amount in senti.
For example 25 shillings would be written as "25/-" or "25/=", while 25 senti would be written as "-/25" or "=/25".
- The currency abbreviation for the Tanzanian shilling (TZS), the currency for Tanzania. The Tanzanian shilling is made up of 100 senti (Swahili for cents), and is often presented in the form x/y. In the x/y form, the x is the amount in shillings and y is the amount in senti.
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