Financial Glossary
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U
- A Nasdaq stock symbol specifying that the issue is in units.
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U-Shaped Recovery
- A type of economic recession and recovery that resembles a "U" shape in charting. Specifically, a U-shaped recovery represents the shape of the chart of certain economic measures, such as employment, GDP and industrial output. A U-shaped recovery involves a gradual decline in these metrics followed by a gradual rise back to its previous peak. Compared to a V-shaped recovery, the U-shaped recovery takes longer to reach levels seen prior to the start of the recession.
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U.S. Department of Housing and Urban Development - HUD
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U.S. Dollar Index - USDX
- A measure of the value of the U.S. dollar relative to majority of its most significant trading partners. This index is similar to other trade-weighted indexes, which also use the exchange rates from the same major currencies.
- A measure of the value of the U.S. dollar relative to majority of its most significant trading partners. This index is similar to other trade-weighted indexes, which also use the exchange rates from the same major currencies.
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U.S. Savings Bond Adjustment
- An adjustment in the current amount of reportable interest on a U.S. savings bond. In some cases, the taxpayer has already reported some of the interest that was earned and must therefore reduce the current amount of taxable interest. The U.S. Savings Bond adjustment is therefore allowed to avoid double taxation of the same income.
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U.S. Savings Bonds
- A U.S. government savings bond that offers a fixed rate of interest over a fixed period of time. Many people find these bonds attractive because they are not subject to state or local income taxes. These bonds cannot be easily transferred and are non-negotiable.
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U.S. Treasury
- Created in 1798, the United States Department of the Treasury is the government (Cabinet) department responsible for issuing all Treasury bonds, notes and bills. Some of the government branches operating under the U.S. Treasury umbrella include the IRS, U.S. Mint, Bureau of the Public Debt, and the Alcohol and Tobacco Tax Bureau.
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UAH (Ukraine Hryvnia)
- The currency abbreviation for the Ukraine hryvnia (UAH), the currency for Ukraine. The Ukraine hryvnia is made up of 100 kopiyka and is often presented with a symbol based on the cursive Ukrainian letter "He", which looks like a "3" with a double horizontal stroke through the middle. The double strokes are seen on other currencies such as the euro and the yen because they symbolize stability.
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UGX (Ugandan Shilling)
- The currency abbreviation for the Ugandan shilling (UGX), the currency for Uganda. The Ugandan shilling is made up of 100 cents and is often presented with the symbol USh. Even though the shilling is made up cents, no subdivisions have been used since the currency was revalued in 1987.
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Ulcer Index - UI
- An indicator developed by Peter G. Martin and Byron B. McCann that is used to measure the riskiness of investments such as securities, commodities, indexes or mutual funds. It is created by factoring in the depth and duration of drawdowns from recent peaks. A large UI value indicates that the security represents undue risk and an investor who holds it will likely need to wait longer for the investment's price to climb back to its recent highs.
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Ultimate Mortality Table
- A mortality table that lists the death rates of insured persons of each sex and age group and excludes data from policies that have been recently underwritten. An ultimate mortality table also lists the proportion of individual survival from birth to any given age. Insurance companies use these tables to price insurance products and ultimately the profitability of these insurance companies depend upon correct analysis of the table.
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Ultimate Oscillator
- A technical indicator invented by Larry Williams that uses the weighted average of three different time periods to reduce the volatility and false transaction signals that are associated with many other indicators that mainly rely on a single time period.
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Ultra ETF
- A class of exchange-traded funds (ETF) that employs leverage in an effort to achieve double the return of a set benchmark. The first ultra ETFs were launched in 2006 and the class has grown to include different ETFs with underlying benchmarks ranging from broad market indexes, such as the S&P 500 and Russell 2000, to specific sectors, such as technology, healthcare and basic materials.
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Ultra-Short Bond Fund
- A type of bond fund that invests only in fixed-income instruments with very short-term maturities. An ultra-short bond fund will ideally invest in instruments with maturities around one year. This investing strategy tends to offer higher yields than money market instruments, with less price fluctuations than a typical short-term fund.
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Ultrafast Trading
- A lucrative and highly competitive method of stock trading that uses special software that works in milliseconds to make trades in reaction to market changes. This type of trading has been criticized for worsening stock swings and for unfairly manipulating stock prices. The software's advocates say it improves trading efficiency.
Also known as "high frequency trading."
- A lucrative and highly competitive method of stock trading that uses special software that works in milliseconds to make trades in reaction to market changes. This type of trading has been criticized for worsening stock swings and for unfairly manipulating stock prices. The software's advocates say it improves trading efficiency.
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Umbrella Insurance Policy
- Extra liability insurance coverage that goes beyond the limits of the insured's home, auto or watercraft insurance. It provides an additional layer of security to those who are at risk for being sued for damages to other people's property or injuries caused to others in an accident. It also protects against libel, vandalism, slander and invasion of privacy. An umbrella insurance policy is very helpful when the insurance owner is sued and the dollar limit of the original policy has been exhausted. The added coverage provided by liability insurance is most useful to individuals who own a lot of assets or very expensive assets and are at significant risk for being sued.
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Unadjusted Basis
- A basis used for depreciation purposes. Unadjusted basis uses the original cost of property or equipment without regard to salvage value.
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Unannualized
- A rate of return on an investment for a period other than one year. An unannualized return may be used to report results for a month, quarter or for several years. When the returns on a particular investment are converted to reflect the rate on an annual basis, it is referred to as the annualized return.
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Unbundling
- The process of taking over a large company with several different lines of business, and then, while retaining the core business, selling off the subsidiaries to help fund the takeover.
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Unchanged
- A situation in which the price or rate of a security does not change between two periods. This can be over any time frame including a trading day, week, or even as much as a year.
Sometimes seen as "UNCH."
- A situation in which the price or rate of a security does not change between two periods. This can be over any time frame including a trading day, week, or even as much as a year.
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Uncle Sam
- A nickname dating back to 1812 used to refer to the U.S. government. The term is said to come from "Uncle Sam" Wilson, who provided barrels of beef to the U.S. Army during the War of 1812. The barrels were stamped "U.S." to indicate that they were government property, but they came to be associated with Wilson's nickname, and eventually "Uncle Sam" became a nickname for the U.S. government.
- A nickname dating back to 1812 used to refer to the U.S. government. The term is said to come from "Uncle Sam" Wilson, who provided barrels of beef to the U.S. Army during the War of 1812. The barrels were stamped "U.S." to indicate that they were government property, but they came to be associated with Wilson's nickname, and eventually "Uncle Sam" became a nickname for the U.S. government.
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Uncommitted Facility
- A credit facility with no restrictions placed upon the lending institution regarding the amount of funds to be lent.
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Unconditional Probability
- The probability that an event will occur, not contingent on any prior or related results. An unconditional probability is the independent chance that a single outcome results from a sample of possible outcomes. To find the unconditional probability of an event, sum the outcomes of the event and divide by the total number of possible outcomes.
Also referred to as marginal probability.
- The probability that an event will occur, not contingent on any prior or related results. An unconditional probability is the independent chance that a single outcome results from a sample of possible outcomes. To find the unconditional probability of an event, sum the outcomes of the event and divide by the total number of possible outcomes.
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Uncovered Interest Rate Parity - UIP
- A parity condition stating that the difference in interest rates between two countries is equal to the expected change in exchange rates between the countries’ currencies. If this parity does not exist, there is an opportunity to make a profit.
"i1" represents the interest rate of country 1
"i2" represents the interest rate of country 2
"E(e)" represents the expected rate of change in the exchange rate
- A parity condition stating that the difference in interest rates between two countries is equal to the expected change in exchange rates between the countries’ currencies. If this parity does not exist, there is an opportunity to make a profit.
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Under Reporting
- The deliberate act of reporting less income or revenue than was actually received, usually for income tax purposes. Under-reporting income in order to avoid taxes is an illegal practice.
When people under report their incomes, the federal government loses tax revenue that could go towards social security, Medicare and other federal projects. Corporations are especially watched by auditors because of the large tax bills at stake each tax year.
- The deliberate act of reporting less income or revenue than was actually received, usually for income tax purposes. Under-reporting income in order to avoid taxes is an illegal practice.
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Undercapitalization
- When a company does not have sufficient capital to conduct normal business operations and pay creditors. This can occur when the company is not generating enough cash flow or is unable to access forms of financing such as debt or equity. If a company can't generate capital over time, it increases its chance of going bankrupt as it loses the ability to service its debts. Undercapitalized companies also tend to choose high-cost sources of capital, such as short-term credit, over lower-cost forms such as equity or long-term debt.
- When a company does not have sufficient capital to conduct normal business operations and pay creditors. This can occur when the company is not generating enough cash flow or is unable to access forms of financing such as debt or equity. If a company can't generate capital over time, it increases its chance of going bankrupt as it loses the ability to service its debts. Undercapitalized companies also tend to choose high-cost sources of capital, such as short-term credit, over lower-cost forms such as equity or long-term debt.
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Undercast
- A forecasting error that occurs when estimating items such as future cash flows, performance levels or production. Undercasting produces an estimation that is below the realized value.
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Underemployment
- A measure of employment and labor utilization in the economy that looks at how well the labor force is being utilized in terms of skills, experience and availability to work. Labor that falls under the underemployment classification includes those workers that are highly skilled but working in low paying jobs, workers that are highly skilled but work in low skill jobs and part-time workers that would prefer to be full-time. This is different from unemployment in that the individual is working but isn't working at their full capability.
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Underinvestment Problem
- An agency problem where a company refuses to invest in low-risk assets, in order to maximize their wealth at the cost of the debt holders. Low-risk projects provide more security for the firm's debt holders, since a steady stream of cash can be generated to pay off the lenders. The safe cash flow does not generate an excess return for the shareholders. As a result, the project is rejected, despite increasing the overall value of the company.
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Underlying
- 1. In derivatives, the security that must be delivered when a derivative contract, such as a put or call option, is exercised.
2. In equities, the common stock that must be delivered when a warrant is exercised, or when a convertible bond or convertible preferred share is converted to common stock.
- 1. In derivatives, the security that must be delivered when a derivative contract, such as a put or call option, is exercised.
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Underlying Cost
- Any cost that can be expected within the following budget period. Underlying costs are costs that the company knows it will have to pay out throughout the budget period. Examples would include items such as rent/lease/mortgage, depreciation, utilities, etc. In the aggregate, sometimes the underlying cost can refer to the basic cost of something excluding unusual costs that occur infrequently.
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Underlying Profit
- A term used to describe the actual reflection of a company's profit. The underlying profit is not the required accounting profit that is recorded on financial statements and documents mandatory to follow preset rules and regulations. This number is calculated by the company to show what they believe to be an accurate reading of the company's profit position and may exclude one time charges or infrequent events.
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Underpayment Penalty
- A tax penalty enacted on an individual for not paying enough of his or her total estimated tax and withholding. If an individual has an underpayment of estimated tax, they may be required to pay a penalty (on Form 2210).
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Underperform
- An analyst recommendation that means a stock is expected to do slightly worse than the market return.
Also known as market underperform, moderate sell, or weak hold.
- An analyst recommendation that means a stock is expected to do slightly worse than the market return.
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Underpricing
- The pricing of an initial public offering (IPO) below its market value. When the offer price is lower than the price of the first trade, the stock is considered to be underpriced. A stock is usually only underpriced temporarily because the laws of supply and demand will eventually drive it toward its intrinsic value.
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Undersubscribed
- A situation in which the demand for an initial public offering of securities is less than the number of shares issued. Also known as an "underbooking".
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Undertakings For The Collective Investment Of Transferable Securities - UCITS
- A public limited company that coordinates the distribution and management of unit trusts amongst countries within the European Union.
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Undervalued
- A stock or other security that is trading below its true value.
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Underwater
- 1. The condition of a call option when its strike price is higher than the market price of the underlying stock.
2. The condition of a put option when its strike price is lower than the market price of the underlying stock.
Also known as "out of the money."
- 1. The condition of a call option when its strike price is higher than the market price of the underlying stock.
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Underweight
- 1. A situation where a portfolio does not hold a sufficient amount of a particular security when compared to the security's weight in the underlying benchmark portfolio. This often occurs when a portfolio is actively managed and underweighting a security may allow the portfolio manager to achieve returns greater than that of the benchmark.
2. An analyst's opinion regarding the future performance of a security. Underweight will usually mean that the security is expected to underperform either its industry, sector, or even the market altogether.
- 1. A situation where a portfolio does not hold a sufficient amount of a particular security when compared to the security's weight in the underlying benchmark portfolio. This often occurs when a portfolio is actively managed and underweighting a security may allow the portfolio manager to achieve returns greater than that of the benchmark.
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Underwriter
- A company or other entity that administers the public issuance and distribution of securities from a corporation or other issuing body. An underwriter works closely with the issuing body to determine the offering price of the securities, buys them from the issuer and sells them to investors via the underwriter's distribution network.
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Underwriting
- 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt).
2. The process of issuing insurance policies.
- 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt).
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Underwriting Spread
- The spread between the amount underwriters pay an issuing company for its securities and the amount the underwriters receive from selling the securities in the public offering.
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Underwriting Standards
- Guidelines established to ensure that safe and secure loans are issued and maintained. The underwriting standards in place help to set benchmarks for how much debt may be issued to a person, the terms of the loans, how much debt a specific company is willing to issue, and what interest rates will be charged.
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Undisclosed Reserves
- The unpublished or hidden reserves of a financial institution that may not appear on publicly available documents such as a balance sheet, but are nonetheless real assets, which are accepted as such by most banking institutions.
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Undivided Account
- An underwriting system in which each underwriter in the group is responsible not only for selling its alloted amount of the new issue but also for selling any excess issue not sold by the underwriting group as a whole. This is also referred to as an "Eastern account", and it is the opposite of a divided account.
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Unearned Income
- Any income that comes from investments and other sources unrelated to employment services.
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Unearned Revenue
- When an individual or company receives money for a service or product that has yet to be fulfilled.
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Uneconomic Growth
- When economic growth produces negative external consequences to the extent that the growth is unproductive with respect to the broader global systems in which it is viewed. Uneconomic growth occurs at a faster rate than what is considered sustainable. Uneconomic growth studies deal with the negative social and/or environmental impacts of too much growth in a broad economic sense (such as a nation's gross domestic product).
The term was popularized by former World Bank economist Herman Daly in the late 1990s, but the core ideas of unproductive growth have a long and varied history.
- When economic growth produces negative external consequences to the extent that the growth is unproductive with respect to the broader global systems in which it is viewed. Uneconomic growth occurs at a faster rate than what is considered sustainable. Uneconomic growth studies deal with the negative social and/or environmental impacts of too much growth in a broad economic sense (such as a nation's gross domestic product).
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Unemployment Rate
- The percentage of the total labor force that is unemployed but actively seeking employment and willing to work.
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Unencumbered
- Property that is not subject to any creditor claims or liens.
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Unified Managed Account - UMA
- A professionally managed private investment account that is rebalanced regularly and can encompass every investment vehicle (e.g. mutual funds, stocks, bonds and exchange traded funds) in an investor's portfolio, all in a single account.
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Unified Managed Household Account - UMHA
- A type of unified managed account that will allow not only for the investing of any form of security by an individual investor, but also will allow any member of the immediate family the same investing access under the same account. This type of account will allow for the ease of administration on behalf of the financial institution and greater transparency for the investing family.
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Uniform Bank Performance Report - UBPR
- An analaytical tool created by the Federal Financial Institutions Examinations Council (FFIEC) to help supervise and examine financial instituions. The Uniform Bank Performance Report (UBPR) serves as an analysis of the impact that management and economic conditions can have on a bank's balance sheet. It examines liquidity, adequacy of capital and earnings and other factors that could damage the stability of the bank.
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Uniform Commercial Code
- A standard set of business laws that regulate financial contracts. The Uniform Commercial Code has been adopted by most states in the U.S. The code itself has nine separate articles. Each article deals with separate aspects of banking and loans. The UCC better enabled lenders to loan money secured by the borrower's personal property.
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Uniform Gifts to Minors Act - UGMA
- An act that allows minors to own property such as securities. The IRS allows persons to give so many thousands of dollars to another person without any tax consequences. If this recipient person is a minor, the UGMA allows the minor to own the assets without an attorney setting up a special trust fund. Under the UGMA, the ownership of the funds works like it does with any other trust except that the donor must appoint a custodian (the trustee) to look after the account.
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Uniform Premarital Agreement Act
- A regulation that allows the parties of a premarital contract to choose the state's jurisdiction under which their contract will fall. A couple can choose any state in which one of the parties lives or plans to live or the state in which the couple will be married. Because this act has not been passed in all states, parties to a prenuptial contract are also limited to choosing only the states that have passed the Uniform Premarital Agreement Act.
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Uniform Rules For Demand Guarantees - URDG
- A set of rules developed by the International Chamber of Commerce (ICC) and adopted in 1992. URDG provides a framework for harmonizing international trading practices and establishes agreed-upon rules for independent guarantees and counter-guarantees among trading partners. The guarantees specify uniform practices for securing payment and performance in worldwide commercial contracts.
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Uniform Securities Act
- An act created as a starting point for state-level securities regulation. The purpose of the Uniform Securities Act is to deal with securities fraud at the state level and to assist the SEC in enforcement and regulation.
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Uniform Transfers to Minors Act - UTMA
- An extension of the Uniform Gifts to Minors Act that allows items other than cash or securities to be considered gifts.
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Uninsured Certificate Of Deposit
- A certificate of deposit (CD) which is not insured against losses. Due to the lack of insurance, these CDs yield a higher interest rate, as the purchaser assumes all of the risk. In the event that the financial institution that issued the CD goes bankrupt, the purchaser loses the investment.
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Unissued Stock
- When a corporation possesses authorized common and preferred shares, but never actually exchanges them for money or services.
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Unit Benefit Formula
- A method of calculating an employer's contribution to an employee's defined benefit plan. The employer calculates the contribution by multiplying an employee's years of service by a percentage of his or her salary.
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Unit Cost
- The cost incurred by a company to produce, store and sell one unit of a particular product. Unit costs include all fixed costs (i.e. plant and equipment) and all variable costs (labor, materials, etc.) involved in production.
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Unit Investment Trust - UIT
- An investment company that offers a fixed, unmanaged portfolio, generally of stocks and bonds, as redeemable "units" to investors for a specific period of time. It is designed to provide capital appreciation and/or dividend income.
Unit investment trusts are one of three types of investment companies; the other two are mutual funds and closed-end funds
- An investment company that offers a fixed, unmanaged portfolio, generally of stocks and bonds, as redeemable "units" to investors for a specific period of time. It is designed to provide capital appreciation and/or dividend income.
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Unit Linked Insurance Plan - ULIP
- A type of insurance vehicle in which the policyholder purchases units at their net asset values and also makes contributions toward another investment vehicle. Unit linked insurance plans allow for the coverage of an insurance policy, and provide the option to invest in any number of qualified investments, such as stock, bonds or mutual funds.
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Unit Sales
- A measure of the total sales that a firm earns in a given reporting period, as expressed on a per unit of output basis. Typically, when using or analyzing a unit sales figure, it should be based on a physical product, such as the number of tons of coal sold, rather than on the number of services rendered.
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Unit Trust - UT
- An unincorporated mutual fund structure that allows funds to hold assets and pass profits through to the individual owners, rather than reinvesting them back into the fund. The investment fund is set up under a trust deed. The investor is effectively the beneficiary under the trust.
See also "unit investment trust".
- An unincorporated mutual fund structure that allows funds to hold assets and pass profits through to the individual owners, rather than reinvesting them back into the fund. The investment fund is set up under a trust deed. The investor is effectively the beneficiary under the trust.
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United States Agency For International Development - USAID
- A U.S. government organization that provides aid to foreign countries. The United States Agency For International Development's (USAID) goal is to foster economic growth and advancements in agriculture, trade, global health, democracy and humanitarian assistance for foreign countries. Some examples of the type of assistance USAID provides are: small-enterprise loans, technical assistance, food and disaster relief, and training and scholarships.
- A U.S. government organization that provides aid to foreign countries. The United States Agency For International Development's (USAID) goal is to foster economic growth and advancements in agriculture, trade, global health, democracy and humanitarian assistance for foreign countries. Some examples of the type of assistance USAID provides are: small-enterprise loans, technical assistance, food and disaster relief, and training and scholarships.
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United States Natural Gas Fund - UNG
- An exchange-traded security designed to track percentage changes in the price of natural gas delivered to Henry Hub, Louisiana, the main U.S. benchmark for natural gas. UNG invests primarily in futures contracts but also in natural gas related futures, forwards and swap contracts and obligations of the United States government with remaining maturities of two years or less.
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Unitized Endowment Pool - UEP
- A form of endowment investing that has mechanics similar to that of a mutual fund. A unitized endowment pool allows multiple endowments to invest in the same pool of assets.
Each endowment owns individual units in the unitized investment pool, and the units are generally valued monthly. New endowments entering the pool can buy in by receiving units in the pool that are valued as of the buy-in date.
- A form of endowment investing that has mechanics similar to that of a mutual fund. A unitized endowment pool allows multiple endowments to invest in the same pool of assets.
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Unitized Fund
- A fund structure that allows investors to pool assets while retaining individual net asset values for each participant and keeping track of historical fund records. Each investor in the fund is accounted for separately and has their own unit - their own class of shares of the portfolio’s total assets.
- A fund structure that allows investors to pool assets while retaining individual net asset values for each participant and keeping track of historical fund records. Each investor in the fund is accounted for separately and has their own unit - their own class of shares of the portfolio’s total assets.
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Unitranche Debt
- A type of debt that combines senior and subordinated debt into one debt instrument; it is usually used to facilitate a leveraged buyout. The borrower would pay one interest rate to one lender, and the rate would usually fall between the rate for senior debt and subordinated notes. The unitranche debt instrument was created to simplify debt structure and accelerate the acquisition process.
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Units Per Transaction - UPT
- A sales metric often used in the retail sales sector to measure the average number of items that customers are purchasing in any given transaction. The higher the UPT, the more items customers are purchasing for every visit.
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Universal Banking
- Banking that includes investment services in addition to services related to savings and loans.
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Universal Currency Converter
- A program that allows for the quick conversion of currencies based on current exchange rates. A universal currency converter can often be found online and can convert the value of one currency to another, such as dollars to euros. Currency converters are usually free when found online, and are useful when determining how much of your home currency (base currency) you will need to exchange when traveling to a foreign country.
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Universal Life Insurance
- A type of flexible permanent life insurance offering the low-cost protection of term life insurance as well as a savings element (like whole life insurance) which is invested to provide a cash value buildup. The death benefit, savings element and premiums can be reviewed and altered as a policyholder's circumstances change. In addition, unlike whole life insurance, universal life insurance allows the policyholder to use the interest from his or her accumulated savings to help pay premiums.
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Universal Market Integrity Rules - UMIR
- A set of rules governing trading practices in Canada. These rules are set out by an independent regulator. UMIR were established to promote fair, equitable and efficient markets. Prior to the formation of the UMIR, each individual exchange was responsible for governing its trading practices. By making these practices universal Canadian exchanges ensure equal fairness and improve investor confidence in all the exchanges.
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Universe Of Securities
- A set of securities that shares a common feature such as the same market capitalization, industry or index. Universe of securities can also refer to securities within a defined price range, securities that deal in specific commodities and/or securities with the same product line.
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Unlevered Beta
- A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta of a company without any debt. Unlevering a beta removes the financial effects from leverage.
The formula to calculate a company's unlevered beta is:
Where:
BL is the firm's beta with leverage.
Tc is the corporate tax rate.
D/E is the company's debt/equity ratio.
- A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta of a company without any debt. Unlevering a beta removes the financial effects from leverage.
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Unlevered Cost Of Capital
- An evaluation that uses either a hypothetical or actual debt-free scenario when measuring the cost to a firm to implement a particular capital project. The unlevered cost of capital should illustrate that it is a cheaper alternative than a levered cost of capital investment program. A variation of the cost of capital calculation.
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Unlimited Liability Corporation - ULC
- A corporate structure that permits a company to be incorporated and flow all profits and losses to shareholders. An unlimited liability corporation (ULC) shelters shareholders from liability in most circumstances except upon liquidation of the company. Shareholders or past shareholders that disposed of their shares less than one year before liquidation become liable for the debts of the company.
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Unlimited Risk
- The risk of an investment that has unlimited downside potential.
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Unlisted Security
- A security that is not traded on an exchange, usually because of an inability to meet listing requirements.
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Unlisted Trading Privileges
- Rights that give an exchange the ability to trade an unlisted security.
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Unpaid Dividend
- A dividend that is owed to stockholders of record but has yet to be distributed. An unpaid dividend will exist in the time between the date of record (when the stock will be trading ex-dividend) and the dividend payment date.
- A dividend that is owed to stockholders of record but has yet to be distributed. An unpaid dividend will exist in the time between the date of record (when the stock will be trading ex-dividend) and the dividend payment date.
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Unparted Bullion
- Precious metal bullion that contains other metals in it.
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Unquoted Public Company
- A company with previously issued securities that are no longer quoted or traded on formal exchanges such as the NYSE. Shares in these companies are available in the over-the-counter market, but they trade in very low volumes, if at all.
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Unrealized Gain
- A profit that results from holding on to an asset rather than cashing it in and using the funds.
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Unrealized Loss
- A loss that results from holding onto an asset rather than cashing it in and officially taking the loss.
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Unrecaptured Section 1250 Gain
- A type of depreciation-recapture income that is realized on the sale of depreciable real estate. Unrecaptured Section 1250 income is taxed at a 25% maximum capital-gains rate (or less in some cases). Unrecaptured Section 1250 gains are only realized when there is a net Section 1231 gain that is not subject to recapture as ordinary income.
- A type of depreciation-recapture income that is realized on the sale of depreciable real estate. Unrecaptured Section 1250 income is taxed at a 25% maximum capital-gains rate (or less in some cases). Unrecaptured Section 1250 gains are only realized when there is a net Section 1231 gain that is not subject to recapture as ordinary income.
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Unrecorded Deed
- A deed for a tangible piece of property that is not filed with the appropriate governing body. The deed will transfer ownership of the property from one party to another. The seller of the deed is known as the grantor, and the recipient of the deed is known as the grantee.
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Unrelated Business Taxable Income - UBTI
- Income regularly generated by a tax-exempt entity by means of taxable activities. This income is not related to the main function of the entity, but is needed to generate a small portion of income.
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Unscheduled Recast
- The unscheduled recalculation of the remaining amortization schedule of a loan. The recalculation occurs when certain triggers contained in the contractual terms of the loan are reached. This might lead to a substantial increase in the loan's scheduled periodic payments.
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Unseasoned Security
- A stock that has just recently started trading.
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Unsecured
- A loan or equity interest that is given without any guarantee of payment, performance, satisfaction or opportunity for return from the recipient. No property, interest or security is used as collateral in either a guarantee or a pledge.
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Unsecured Creditor
- An individual or institution that lends money without obtaining specified assets as collateral. This poses a higher risk to the creditor because it will have nothing to fall back on should the borrower default on the loan. A debenture holder is an unsecured creditor.
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Unsecured Debt
- A loan not secured by an underlying asset or collateral. Unsecured debt is the opposite of secured debt.
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Unsecured Loan
- A loan that is issued and supported only by the borrower's creditworthiness, rather than by some sort of collateral.
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Unsold Inventory Index
- A monthly statistic released nationally that details the number of unsold homes expressed in the time (in months) it would take to sell them at current rates. When the unsold inventory index is compared to the average number of sales per month in the recent past, it indicates the pace or velocity of home sales.
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Unsponsored ADR
- An American depositary receipt (ADR) that is issued without the involvement of the foreign company whose stock underlies the ADR. Shareholder benefits, voting rights and other attached rights may not be extended to the holders of these particular securities.
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Unstated Interest Paid
- An assumption by the IRS that interest on a loan has been paid if the stated interest rate is below a minimum.
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Unsterilized Foreign Exchange Intervention
- An attempt by a country's monetary authorities to influence exchange rates and its money supply by not buying or selling domestic or foreign currencies or assets. This is a passive approach to exchange rate fluctuations, and allows for fluctuations in the monetary base.
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Unsubordinated Debt
- A loan or security that ranks above other loans or securities with regard to claims on assets or earnings. Also known as a senior security.
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Unsubscribed
- Newly issued securities that have not seen much interest, or subscriptions, from investors ahead of the issue date or have not been offered by brokerages. If you wanted to own the newly issued shares, you'd only be able to purchase them as you would any other stock - through the secondary markets.
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Unsuitable (Unsuitability)
- A situation where an investment strategy does not meet the objectives and means of an investor. In most parts of the world, financial professionals have a duty to take steps that ensure that an investment is suitable for a client. For example, in the United States these rules are enforced by the NASD.
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Unsystematic Risk
- Company or industry specific risk that is inherent in each investment. The amount of unsystematic risk can be reduced through appropriate diversification.
Also known as "specific risk", "diversifiable risk" or "residual risk".
- Company or industry specific risk that is inherent in each investment. The amount of unsystematic risk can be reduced through appropriate diversification.
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Unweighted Index
- A simple arithmetic or geometric average used to calculate stock indexes. Equal weight is invested in each of the stocks in an index with equal dollar amounts invested in each underlying stock. Because the stocks are equally weighted, one stock's performance will not have a dramatic effect on the performance of the index as a whole. This differs from weighted indexes, where some stocks are given more weight than others, usually based on their market capitalizations.
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Unwind
- 1. The closure of an investment position.
2. The reconciliation of an error previously unseen by a brokerage house.
- 1. The closure of an investment position.
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Up Volume
- A stock's volume when the security closes at a price higher than the previous day's close.
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Up-and-In Option
- An option that can only be exercised when the price of the underlying asset reaches a set barrier level. This is a type of a knock-in barrier option.
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Up-and-Out Option
- A type of option that ceases to exist when the price of its underlying asset has reached a pre-specified price level.
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Up-Front Mortgage Insurance - UFMI
- An insurance premium that is collected, typically on Federal Housing Administration (FHA) loans, at the time the loan is initially made. It is in contrast to private mortgage insurance (PMI), which is collected by the lender each month when a buyer's down payment is less than 20% of the purchase price. Up-front mortgage premiums are added to a pool of money that is used to help entities, such as the FHA, insure loans for certain borrowers.
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Up-Market Capture Ratio
- A statistical measure of an investment manager's overall performance in up-markets. The up-market capture ratio is used to evaluate how well an investment manager performed relative to an index during periods when that index has risen. The ratio is calculated by dividing the manager's returns by the returns of the index during the up-market, and multiplying that factor by 100.
- A statistical measure of an investment manager's overall performance in up-markets. The up-market capture ratio is used to evaluate how well an investment manager performed relative to an index during periods when that index has risen. The ratio is calculated by dividing the manager's returns by the returns of the index during the up-market, and multiplying that factor by 100.
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Upgrade
- A positive change in the rating of a security.
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Upside
- The potential dollar or percentage amount by which the market or a stock could rise. This is basically an educated guess on how high a stock could go in the near future.
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Upside Tasuki Gap
- A candlestick formation that is commonly used to signal the continuation of the current trend. The pattern is formed when a series of candlesticks have demonstrated the following:
1. The bar is a large white candlestick within a defined uptrend.
2. The second bar is another white candlestick that has gapped above the close of the previous bar.
3. The last bar is a red candlestick that closes within the gap between the first two bars. It is important to note that the red candle does not need to fully close the gap.
- A candlestick formation that is commonly used to signal the continuation of the current trend. The pattern is formed when a series of candlesticks have demonstrated the following:
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Upside/Downside Ratio
- The volume of advancing NYSE issues divided by the volume of declining NYSE issues.
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Upstairs Trade
- When a trade in a listed stock is not executed through the listing exchange.
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Upstream
- Operations stages in the oil and gas industry that involve exploration and production.
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Upstream Guarantee
- A contingent liability on a subsidiary's financial statements in which the subsidiary guarantees its parent company's debt. Upstream guarantees are performed to get better financing terms for the parent or to initiate financing.
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Uptick
- A transaction occurring at a price above the previous transaction. In order for an uptick to occur, a transaction price must be followed by an increased transaction price. This term is commonly used in reference to stocks, but it can also be extended to commodities and other securities.
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Uptick Rule
- A former rule established by the SEC that requires that every short sale transaction be entered at a price that is higher than the price of the previous trade. This rule was introduced in the Securities Exchange Act of 1934 as Rule 10a-1 and was implemented in 1938. The uptick rule prevents short sellers from adding to the downward momentum when the price of an asset is already experiencing sharp declines.
The uptick rule is also known as the "plus tick rule".
- A former rule established by the SEC that requires that every short sale transaction be entered at a price that is higher than the price of the previous trade. This rule was introduced in the Securities Exchange Act of 1934 as Rule 10a-1 and was implemented in 1938. The uptick rule prevents short sellers from adding to the downward momentum when the price of an asset is already experiencing sharp declines.
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Uptick Volume
- The volume of a security that trades at a price higher than its previous price.
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Uptrend
- Describes the price movement of a financial asset when the overall direction is upward. A formal uptrend is when each successive peak and trough is higher than the ones found earlier in the trend.
Notice how each successive peak and trough is located above the previous ones. For example, the peak at Point 4 is higher than the peak at Point 2. The uptrend will be deemed broken if the next low on the chart falls below Point 5.
Uptrend is the opposite of downtrend
- Describes the price movement of a financial asset when the overall direction is upward. A formal uptrend is when each successive peak and trough is higher than the ones found earlier in the trend.
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USA Patriot Act
- A law passed shortly after the September 11, 2001, terrorist attacks in the United States giving law enforcement agencies increased, broad powers to bring terrorists to justice. The USA Patriot Act is an acronym for Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism.
- A law passed shortly after the September 11, 2001, terrorist attacks in the United States giving law enforcement agencies increased, broad powers to bring terrorists to justice. The USA Patriot Act is an acronym for Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism.
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Usance
- 1. The allowable period of time, permitted by custom, between the date of bill and its payment. The usance of a bill varies between countries, often ranging from two weeks to two months.
2. The interest charged on borrowed funds. Usance is derived from the action of usury.
3. The use of goods for economic purposes.
- 1. The allowable period of time, permitted by custom, between the date of bill and its payment. The usance of a bill varies between countries, often ranging from two weeks to two months.
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USD
- In currencies, this is the abbreviation for the U.S. dollar.
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USD (United States Dollar)
- The currency abbreviation for the United States dollar (USD), the currency for the United States of America. The United States dollar, or U.S. dollar, is made up of 100 cents and is presented with the symbol $ or US$ to differentiate it from other dollar-based currencies. The U.S. dollar is considered a benchmark currency, and is the currency used the most in transactions across the world. The currency is actually used as an official currency in many countries outside of the U.S., while many others use it alongside their own as an unofficial currency.
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USD/CAD (U.S. Dollar/Canadian Dollar)
- The abbreviation for the U.S. dollar and Canadian dollar (USD/CAD) currency pair or cross. The currency pair tells the reader how many Canadian dollars (the quote currency) are needed to purchase one U.S. dollar (the base currency).
Trading the USD/CAD currency pair is also known as trading the "Loonie".
- The abbreviation for the U.S. dollar and Canadian dollar (USD/CAD) currency pair or cross. The currency pair tells the reader how many Canadian dollars (the quote currency) are needed to purchase one U.S. dollar (the base currency).
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USD/CHF (U.S. Dollar/Swiss Franc)
- The abbreviation for the U.S. dollar and Swiss franc (USD/CHF) pair or cross for the currencies of the United States (USD) and Switzerland (CHF). The currency pair shows how many Swiss francs (the quote currency) are needed to purchase one U.S. dollar (the base currency).
Trading the USD/CHF currency pair is also known as trading the "Swissie".
- The abbreviation for the U.S. dollar and Swiss franc (USD/CHF) pair or cross for the currencies of the United States (USD) and Switzerland (CHF). The currency pair shows how many Swiss francs (the quote currency) are needed to purchase one U.S. dollar (the base currency).
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USD/JPY (U.S. Dollar/Japanese Yen)
- The abbreviation for the U.S. dollar and Japanese yen (USD/JPY) pair or cross for the currencies of the United States (USD) and Japan (JPY). The currency pair shows how many Japanese yen (the quote currency) are needed to purchase one U.S. dollar (the base currency).
Trading the USD/JPY currency pair is also known as trading the "gopher".
- The abbreviation for the U.S. dollar and Japanese yen (USD/JPY) pair or cross for the currencies of the United States (USD) and Japan (JPY). The currency pair shows how many Japanese yen (the quote currency) are needed to purchase one U.S. dollar (the base currency).
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Useful Life
- The number of years, as set by the IRS, that depreciable business equipment or property is expected to be in use.
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Usufruct
- A legal term describing a situation wherein a person or company has a temporary right to use and derive income from someone else's property (provided that it isn't damaged).
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Usury
- The act of lending money at an interest rate higher than that permitted by law.
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Utilitarianism
- A philosophy that bases the moral worth of an action upon the number of people it gives happiness or pleasure to. A utilitarian philosophy is used when making social, economic or political decisions for the "betterment of society". In utilitarianism, an action is considered to have utility only to the extent that it contributes to the overall good.
The philosophy of utilitarianism was first proposed and discussed by John Stuart Mill and Jeremy Bentham in the mid-1800s.
- A philosophy that bases the moral worth of an action upon the number of people it gives happiness or pleasure to. A utilitarian philosophy is used when making social, economic or political decisions for the "betterment of society". In utilitarianism, an action is considered to have utility only to the extent that it contributes to the overall good.
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Utilities Sector
- A category of stocks for utilities such as gas and power. The utilities sector contains companies such as electric, gas and water firms and integrated providers.
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Utility
- 1. An economic term referring to the total satisfaction received from consuming a good or service.
2. A company that generates, transmits and/or distributes electricity, water and/or gas from facilities that it owns and/or operates.
- 1. An economic term referring to the total satisfaction received from consuming a good or service.
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UYU (Uruguayan Peso)
- The currency abbreviation for the Uruguayan peso (UYU), the currency for Uruguay. The Uruguayan peso is made up of 100 centésimos and is often presented with the symbol $. Because of the instability of this currency, larger items such as real estate and cars are often priced in U.S. dollars.
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