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What is Devaluation? The process by which a nation deliberately lowers the value of its currency relative to other international currencies is call...

What is the Advance Decline Ratio? The advance decline ratio is used to determine how the market performed on a given day. It does this by comparin...

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's a lock-up agreement? We think it has something to do with a shiv, but let's watch this video, just in case.

What are the Santa Claus rally and the January effect? We really hope it involves Wall Street professionals dressing in Santa suits.

What is a Fund of Funds? A fund of funds is a mutual fund strategy that invests in other funds rather than investing in stocks or bonds. The underl...

Market manipulation is manipulation of the, uh... market. Like...illegally. Yeah, any sort of "scheme" is probably something you want to avoid.

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

What are Capital Markets? The most often context used for “Capital Markets” is in corporate finance and investment banking, and it refers prima...

A fundamental analyst is basically the opposite of a chartist - they care about a company's earnings, profit margins, gross rates, etc.

What are overbought and oversold? Hit play to find out.

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 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 thin market, and has it been on Jenny Craig recently?

What are moving averages? Moving averages are calculated using past stock prices in an attempt to determine future trends. It’s calculated by ave...

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...

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

What are Freddie Mac and Fannie Mae? They sound like snack cakes to us, so, uh...maybe we should watch this video.

What are Passive Investing and Passive Investors? Passive investing and passive investors are ones who opt to ride the market out over the long term on a buy and hold strategy instead of trading in and out in accordance with the trend at the moment. Investors who have used this strategy have historically done well and in line with the most comparable index to their portfolio, albeit their exposure to market risk was absolute and rarely significantly better than the index.

When a bond is secured, it means it's protected, i.e. there are assets that would be forfeited if repayment is not made. When it's unsecured... it's pretty much just a handshake.

The Sharpe Ratio is a calculation used by investors to measure the dynamics between risk and reward. TL;DR: lottery tickets=bad.

A takedown is a commission or spread that investment bankers take from the proceeds raised on a securities offering.

What is Good Delivery? Good delivery just means that nothing gets in the way of a security transfer after a transaction is made. It’s kind of a dated term because everything is done electronically now but when trades were made using paper, issues with delivery were more common.

What are Angel Investors and Seed Funds? Angel investors provide the funds for small start-ups. They are usually family and friends (not institutional or highly experienced investors) and make one-time investments. Seed funds refer to the money that angel investors put in. They are used to start a company and give the investor a percentage of the company in equity.

The Russell Index is a series of indices that tracks the progress of stocks in a given basket. Aw. We were hoping it tracked adorable Jack Russell Terriers, or something...

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 ten billion that you win, then it's a bad bet, ten times over.

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 terms of the transaction agreement. This can be in the form of payment default or in providing asset or funding in accordance to the agreement schedule, or a host of other factors.

What are Bond Anticipation Notes (BANS), Revenue Anticipation Notes (RANS), and Tax Anticipation Notes (TANS)? BANS, RANS and TANS are all short-term debt instruments (average of 1 year maturity) issued by municipalities for various projects. In the case of BANS, they are to be repaid by a bond underwriting that is already in the works and the BAN is for interim finance. In the case of RANS, the notes are paid off by forthcoming revenues generated, such as by tolls. TANS are paid off by future taxes, such as for a public park or other project. BANS, TANS and RANS are all tax free like standard municipal bonds.

What is the Fast Market Rule? The fast market rule is something that is used in the U.K. to keep the market under control when any sort of crash happens. It allows big traders and firms to trade outside of quoted trading ranges so that huge changes in price do not have as big of an effect.

What is the Dow Jones Industrial Average? The Dow Jones Industrial Average is usually just called the Dow. It’s an average of 30 of the most well-known and influential stocks. Using these stocks, it determines how the market is performing overall.

What is Arbitrage? Arbitrage is a trading strategy used to make risk-free money. The investor buys a security in one market and sells it in another market at the same exact time that a change in price or pricing error occurs.

What do you need to retire? Retirement - think: 401k, pension fund, IRA, roth IRA, etc. All of these savings socked away while you worked hard are tax-deferred. Ordinary income tax gets applied when you take the money out and actually use it.

What is an Agency Bond? Agencies bonds are issued by government agencies, not the treasury. The typical government bonds (T-bills, T-notes, and such) are issued and backed by the treasury or a municipality; these are not. They are still backed by the government though, issued specifically by the government agencies: Federal Housing Administration, Small Business Administration, and Government National Mortgage Association.

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

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.

There’s an old saying on Wall Street: People who want to make a lot of money buy stocks. People who have a lot of money buy bonds. The amount of wealth invested in bonds vs. stocks roughly 4:1. The risk vs. reward ratio is more on the stock side, which can be volatile, and can lose principal, but historically has been shown to be more profitable over the long haul than bonds. However, bonds offer greater security of principal, lower volatility, and reliable income, which makes for easier estate planning and fewer sleepless nights.

What is suspended trading? It has nothing to do with suspenders, which is a bummer...we love suspenders. They're so jaunty.

What is a Commingled Fund? Commingled funds are similar to mutual funds but contain different assets and possible asset classes. They are blended together under a single umbrella to realize greater economies of scale and to reduce management redundancies. They are mostly used by institutional retirement plans and are not publicly listed for individual investors.