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

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

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...

Subsidies are government donations given to industries who cannot operate profitably with the goal of keeping American citizens employed on the tax...

What are T-Notes, T-Bonds, and TIPS? T-Notes are debt securities (like bonds) that are issued by the government and mature within one to 10 years....

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

What is AMBAC? AMBAC stands for American Municipal Bond Assurance Corporation. It provides insurance for municipalities that sell muni bonds, such...

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 Federal Funds Rate? The federal funds rate is the interest rate used for overnight lending between banks. The amount banks are able to...

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 th...

What is a limited partnership? A limited partnership is one in which at least one party is a general partner who assumes personal liabilities and i...

What is a partnership? A partnership is an arrangement where two or more parties agree to form a business in cooperation with each other. Partnersh...

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 h...

What does it mean to "go public?" An IPO raises cash in the form of equity, usually, for investors. When public, a company exists under SEC dominio...

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 c...

A REIT is a mini-mutual fund for real estate investments. Aw. Sounds cute.

Trading volume is the number of shares trading back and forth at a given time.

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...

What is Delivery Vs. Payment? In order to mitigate liquidity and settlement risk when trading securities on an institutional level, the Delivery Vs...

What is real return? Real return is the actual return made from an investment after inflation is factored in. Return is expressed as a percentage called a nominal rate of return before inflation; real return shows how much was actually made given inflation.

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

What is a muni bond? Muni bonds are bonds issued by the government. They are used to raise the money required to pay for government responsibilities like schools and roadways. Because of their nature and purpose, they are not taxed, so they make for pretty good investment opportunities for people in high tax brackets.

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 Capital Gains Tax? Capital gain taxes are taxes collected by the IRS on trading profits from investments in equities, real estate, or any other type of transaction in which something defined as an asset is bought and then resold at a profit. The amount of assessed capital gains taxes is contingent upon the length of time the asset was held.

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 is term life insurance, and variable life insurance? Hit play to find out, and, uh...let's hope you live long enough to figure out the answers.

What Does It Mean to Delist? To delist is when a company removes its name and ticker from an exchange. This means that the company is no longer available to be publicly traded on that exchange. It can be the result of a merger, a takeover by a private corporation, a bankruptcy, a name change, or if the company no longer meets the exchange’s listing requirements.

What is a cost-benefit analysis? Prudent management of a company will often deploy cost-benefit analysis to quantify the degree of finances, resources, and man hours may go into a new project or initiative and whether or not the projected benefits, profits and advantages will be worth the costs of the launch.

What is Regulation Full Disclosure? Publicly traded companies are required by SEC rules to release full disclosure of all info related to material events of the company within legal limits and federal statutes. For example, in order to be compliant with SEC rules, Northrop Grumman could announce a new deal to supply fighter jets for the USAF and the dollar amount of the deal, as well as for how many units over what period of time. However, national security rules would prevent the need to disclose the kind of weaponry or tactical stealth capabilities that the aircraft may include.

What are operating profits, net profits and gross profits? Profits for a company can be calculated several different ways depending on what metric is being cited. Gross profits are measured by total revenues minus cost of goods or services sold. Of course, a company also has operating expenses, as well as depreciation and amortization, which are accounting deductions on equipment and other property belonging to the company. The Operating profit subtracts those elements from the Gross profit. The Net profit also factors in taxes and interest, which are also company costs that can apply against revenues. Naturally, the Net profit will result in the smallest number. Gross profit is also sometimes referred to as EBITDA, which is Earnings Before Interest, Taxes, Depreciation and Amortization.

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

What is Brand Equity? Brand Equity refers to the added or subtracted value that name recognition may accord to a company’s products and services. If a company has positive brand equity, the introduction of new products under the same name will be more likely to have a favorable market response. Apple, Nike, and Mercedes-Benz are examples of companies with positive Brand Equity. Conversely, a negative brand equity will make new products and services under the same name have a harder time due to the stigma of the brand name’s negative connotations, even if the products or services have superior features when compared with their rivals. Blackberry would be such an example.

A wrap account is an account that wraps into one annual fee all of the services you'd normally pay for a la carte at a given brokerage.

An omnibus account is an investment account in which a collection of investors have invested their capital to own a pro rata share of that cooperative investment. Either that, or it’s a lot of buses.

What is a balance sheet? A balance sheet is a financial document that public corporations are required to use. It shows their assets and liabilities (what they have and what they owe). It also includes shareholder’s equity, or how much is invested in the company, and this number combined with liabilities should be equal to assets (balanced).

What is inflation, and if we poke it with a pin, will it pop?

What is the process of a loan? Collateral. Do you have it? The bank lending you money wants to be sure that A) they get paid back, and B) they charge you enough rent or interest on the money you are borrowing such that it matches the risk the bank is taking.