ShmoopTube

What is a warrant? Hit play to find out.

Rights offerings are essentially hostile takeover defenses. Unfortunately, they're not as cool as swords and shields.

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 is the Efficient Markets Theory? The Efficient Markets Theory says that stocks trade at their fair value all of the time, assuming all informa...

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 kickbacks? Well, they're things we don't get for working at Shmoop, that's for sure. Hit play to find out more.

What are At the Money, In the Money, Deep in the Money, and Out of the Money? At the money happens when a stock is trading at an option’s strike...

What are ascending and descending tops and triangles? Ascending and descending tops and triangles are used to describe market performance graphs. T...

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 volatility? In the world of investing, volatility basically means riskiness. It looks at the returns for stocks or indexes, and if they are...

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...

What is covariance? Covariance is the comparison of how assets move in the markets. Positive covariance is when assets move in tandem, such as when...

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

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 averaging closing prices for a specified period of time.

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 stock has outperformed its benchmark index by 1% or more.

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.

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...

The Investment Company Act of 1940 regulated and ensured fair dealings in the mutual fund industry.

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 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.

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 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.