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What is speculation? Speculation refers to a high risk, high reward scenario in investing. When an investor engages in a speculation, they take on...

What is After Hours Trading/Extended Trading? After hours trading describes any trades made after the market closes or before the market opens. Bec...

What is Collateralized Mortgage Obligation (CMO)? A CMO is a mortgage bond that consists of a large number of different individual mortgages bundle...

What is Alpha? Alpha is an investing term that describes the success of an investment. It looks at the investment’s ability to beat beta (or mark...

What is Beta? Beta is a figure associated with public companies that measures how risky the company’s stock is in comparison to the market as a w...

What is short interest theory? Watch this not-so-short video to find out.

What does “Away from the Market” mean? Away from the market just means that a stock is moving away from its benchmark. This happens when the bu...

Selling away is the practice of selling securities that aren't under the seller's auspices to sell.

What is a High Alpha Investor? A high alpha investor invests in securities with alpha values of 1 or higher. This means that the mutual fund or sto...

What is Counterparty Risk? Counterparty risk is the risk to either party within a transaction that the other will not or be unable to abide by the...

Painting the tape is an illegal way to manipulate stock prices. And yes, it’s still illegal, even if you paint it super pretty.

Term to maturity is kind of the life cycle of a bond, but luckily for the bond, it gets to skip puberty.

What are unsuitable recommendations? Hit play to find out, and trust us when we say that that's a suitable recommendation.

What is interest? In order to create an incentive for a lender, a borrower usually repays debt with interest, a percentage of overpayment for the l...

What is Good ‘Til Cancelled (GTC)? GTC orders are trade orders that may be filled at any time unless the investor cancels it. Good til cancelled...

What is Yield to Maturity? When calculating bond yields, the yield to maturity is the interest rate that an investor would ultimately accumulate if...

A liquid market is a market featuring high trading volumes, i.e. investors actually want to put their cash to work.

What is a Country Basket (Index Fund)? Investing internationally can be a challenge, as foreign exchange, different accounting rules, time zones an...

Who is Warren Buffett, and how do we get him to give us a loan...?

What is the gold standard, besides the standard at which this video is judged? Hit play to find out.

What does it mean to be vested? Vested refers to having an interest in something. It’s typically used when talking about retirement plans and things like 401k and 403b plans. So, when someone is fully vested it means that the funds in the plan belong to you with no penalty.

What is a Blue Chip? Blue chip stocks are stocks with very large market caps; basically meaning their issued stock is worth a lot of money. These companies are very well established and successful making them safe long-term investment options.

What is Payment in Kind/PIK? PIK is the technical term for barter payment. If you give your plumber a pair of tickets for an NFL game that are worth the same as the fee he would have charged for a toilet repair, that would be an example of PIK. Another example is when Disney used PIK for its acquisition of Marvel Entertainment by paying in Disney stock rather than in cash. Mutual Funds that make distributions in additional shares would also be categorized as PIK instead of cash.

The random walk hypothesis is a financial theory that suggests the market is unpredictable, and can't be beaten. (Cough-cough-B.S.)

What is the Black Scholes Model? The Black Scholes Model is used to determine the price of call options. It looks at the change in stock price over time also using time value of money as well as the strike price and expiration date for the option.

What does “Called Away” mean? Calling away means that an option has been called and exercised and the writer is now responsible for giving the person who bought the option the underlying asset (or responsible for buying the asset as would be the case with a put). This term is also used with the trading of other securities like bonds.

When you realize a gain or loss, it means that you turn an investment into cash. Thrilling, we know.

What is Bond Amortization? Bond amortization is simply the spreading out of the cost of the bond over time. Bonds have amortization schedules and these lay out how the bond is paid including principal and what is owed in interest.

What is the Relative Strength Index? The Relative Strength Index is a technical analysis indicator that measures trading direction trends over the course of 14 trading sessions (on average) and calculates the degree of up and down percentages to determine whether or not the asset in question may be indicating an overbought or oversold signal.

What is amortization? Amortization tracks the decline in value of a contract or service, usually paid for in advance. You received $10,000 in advance to water Ms. Maple's lawn for 10 months. She amortizes your watering to the tune of a decline in value of that contract of $1,000 as each month goes by.

What are Weighted Averages and Expected Values? Weighted averages are averages calculated to account for the number of changes that a variable, such as price, may have, especially when the same asset may have been added to the portfolio in varying quantities and price costs over time for a cumulative total. Expected Values is an anticipated prediction of an asset’s value over a specified time that is calculated as the total of possible results times their statistical probability.

What is a basis point? Basis points are how changes in financial securities are described. “The stock dropped 100 points” actually means that the stock price decreased by 1%. One basis point corresponds with 1/100th of 1%; as the point system has to describe changes, it makes sense that this figure would be so small, because changes are typically not that drastic, but need to be described. For example, saying a stock price changed .01% is a little confusing to grasp, but 100 points is not, assuming the lingo is understood.

What is a strike price? Strike prices are used in conjunction with options. Calls and puts give investors the right to buy or sell stocks at predetermined prices called strike prices. If the investor owns a call option, they can buy the stock at the strike price; with a put option, they can sell the stock at the strike price.

What are position trading and swing trading? Get your mind out of the gutter. They're way more boring than they sound.

What is a Future Value calculation? Future Value is used to find the value of an investment at some point in the future based on expected growth or interest rate. The calculation requires multiplying the present value of the investment by 1 plus the interest rate (or expected growth rate) rose to the number of periods (dependent upon the future date being used).

Tax basis is your cost for assessing how much you owe in taxes, and is determined by multiplying your gains by your tax rate.

What is Cost Basis? For accounting purposes, the cost basis is the amount invested at the time of asset purchase. That is subtracted from the sale price to determine the commensurate capital gain or capital loss generated by the investment’s impact on the overall portfolio.

What's the SEC? Easy. Seals Eating Candy. Or maybe Silly Elephants Canoodling? We can never remember. Guess it's time to watch this video and refresh our memories.

What is the difference between common and preferred shares? Common stock is at the bottom. It comes at the very end, when a company is sold, in the priority stack. It sits behind bank debt, the IRS, preferred stock, and pretty much everything else. The big advantage of common stock? It is the proletariat of investing: common stock shareholders elect the board of directors, who then are responsible for managing the company from 37,000 feet.

What are pink sheets? And can we bleach them to make them white again?