ShmoopTube

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

Maturity is, quite simply, the date when a debt becomes due. As for our maturity, well... we're still giggling about the word "due."

How are risk and reward related? Take more risk, expect more reward. A lottery ticket might be worth a billion dollars, but if the odds are one in...

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...

What are Bond Anticipation Notes (BANS), Revenue Anticipation Notes (RANS), and Tax Anticipation Notes (TANS)? BANS, RANS and TANS are all short-te...

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.

When-issued is a trading condition that applies to structural changes in companies that result in a new entity with its own set of trading rules.

What is Contingent Liability? Contingent liability refers to a possible liability in the future contingent upon some other event being the trigger....

Power of attorney refers to the authorization to conduct business on legal and financial matters on behalf of another party. So...choose wisely.

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

What is After Tax Yield? After tax yield is simply how much an investment makes (or yields) after taxes have been paid. This term refers to bond yi...

Are monopolies evil? Should they be regulated? Should they be illegal? Monopolies in and of themselves, are neither good nor evil. How they conduct...

A moral obligation bond is a bond that is paid or backed by a well-heeled, better funded entity should the bond default.

What is liquidity? Think: water. It's liquid. It can be squeezed into little, tiny spaces and infused into large spaces. A defining trait of liquid...

What are the differences in S&P’s and Moody’s ratings? Both S&P and Moody’s give ratings that help investors determine if they are making sma...

What are credit ratings and how are they interpreted? Credit ratings describe a borrower’s likelihood to pay back their debts; it’s a look at h...

What are bond ratings and what do they mean? Bond ratings are just credit ratings used on bonds. Just like a credit rating, they give the investor...

What is the Bid-to-Cover Ratio? The Bid-to-Cover ratio compares the amount of bids made for Treasury securities to the amount that is actually sold...

What is Equity Kicker? An Equity Kicker is an added incentive for a preferred stock or bond offering in the form of a warrant or option to purchase...

The Federal Open Market Committee's purpose is to manage financial outcomes through monetary policy.

What is a Bucket Shop? Bucket shops are, for lack of better terms, sketchy brokerage firms. They make investors believe that crappy penny stocks they don’t want are great investments and engage in other tactics that take advantage of investors and basically just reaffirm their sketchiness.

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

What are CEOs, CFOs, and COOs? The “C” level executives in a corporation are the corporate officers responsible for the management decisions and processes of conducting the company’s business. The Chief Executive Officer (CEO) is akin to the captain of a ship. The CEO has the final authority on any corporate decisions and is responsible for the company’s overall success or failure. The Chief Financial Officer (CFO) is responsible for overseeing all of the company’s financial compliance with taxes, accounting, etc. as well as prudently managing the company’s funds to maximize value and profits for the shareholders. The Chief Operations Officer (COO) is akin to a ship’s XO; the COO implements all major decisions that are made by the CEO to whatever departments are required and coordinates whatever inter departmental cooperation may be necessary to execute the task(s) at hand.

What is an Affiliated Person or Affiliated Investor? An affiliated person is known as an insider in the financial world. These are the people who have a large influence over a corporation, like the board of directors and high stake shareholders.

What is an Associated Person? An associated person is just an employee of a broker or a dealer that are involved in trading. These people must be certified depending on their jobs and follow SEC regulations; thus people like secretaries are often not included.

What is a Buy and Hold Strategy? A buy and hold strategy can be thought of as what someone might use in a retirement account or college account (comprised of stock) for a young child. They make investments and let them sit there without changes for a long time regardless of any movements in price because these movements should be short-term.

NAV isn't a cool new navigation app...it's how mutual fund shares are valued or priced at the end of each trading day.

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 opportunity cost? In short, it's the eventual monetary cost of choosing to do one thing over another (often choosing travel or experiences over their monetary equivalent). That contract guaranteeing you $100k a year might sound terrific when you're staring $200k of student loans in the face, but if it locks you out of a much higher paying job five years down the road, you can kiss wealth and financial success good-bye.

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 is Consent To Service Of Process? A Consent to Service of Process is basically a Power of Attorney type of relationship established between an individual and a company so that the company has the authority to accept legal documents on behalf of the individual.

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.

Reg A is an exemption for the sale of securities. We wonder if it has any sweet steel drums in the background.

Who benefits from unions? Trade unions ostensibly exist to protect the interests of their rank and file constituent members. They were crucial for enacting safety rules and fair practices during the early and mid periods of industrialization in Western society. Changes in labor laws and increased flexibility in human resources, the resurgence of small businesses, and the corruption problems between trade union officers and organized crime have reduced private sector participation in trade unions membership.

What are shares outstanding? The total size of the pie. All of the shares outstanding comprise the total votes and value of a given company. If XYZ.com has a million shares outstanding, and its stock trades for $12 a share, the marketplace is saying it is worth $12M.

What are systematic and unsystematic risk? Take a risk on this video and hit play.

What is mark to market? Is it when Mark Zuckerberg writes the stock market a letter, thanking it for being a friend?

How do some accountants “cook the books”? Cooking the books refers to accountants making company’s financials look much better than they are. They can do this in a bunch of different ways, including accounting for revenue that isn’t promised, pushing back payments owed, and messing with what is owed to employees, among other fancy tricks.

Sandbagging is the practice of keeping financial estimates conservative so that they are more likely to exceed expectations. We do a similar thing at work. Always under promise, always over deliver.