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23 Cards in this Set
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A trading account maintained with a brokerage firm on which the investor may borrow a percentage of the funds for the purchase of securities. |
margin account |
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A market transaction in which an investor purchases securities with the expectation of holding the securities for cash income or for resale at a higher price in the future.
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long position |
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A market transaction in which an investor sells borrowed securities in anticipation of a price decline. The investor's expectation is that the securities can be repurchased (to replace the borrowed shares) at a lower price in the future. |
short position (short sale) |
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A condition placed on a transaction executed through a stockbroker to assure that securities will be sold only if a specified minimum price is received or purchased only if the price to be paid is no more than a given maximum.
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limit order |
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A mechanism for locking in gains or limiting losses on securities transactions. The investor is not assured of paying or receiving a particular price but rather agrees to accept the price prevailing when the broker is able to execute the order after prices have reached some predetermined figure.
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stop order |
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A brokerage firm that executes transactions on its Internet Web site at a minimum cost to the customer.
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online broker |
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Occurs when a stock held for investment purposes is sold at a gain or loss.
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capital gain or loss |
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An index of stock market activity based on the price movements of 30 large corporations. The average is price-weighted, which means each stock is effectively weighted by the magnitude of its price.
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Dow Jones Industrial Average (DJIA) |
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Each stock in the average is weighted by its price. The higher the price, the greater the relative weighting. The Dow Jones Industrial Average represents a price-weighted average.
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price-weighted average |
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An index of 500 major U.S. corporations. In 2004 there were 373 industrial firms, 15 transportation firms, 37 utilities, and 65 financial firms. This index is value-weighted.
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Standard & Poor's 500 Index |
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An index composed of 400 middle-size firms that have total market values between $1.2 billion and $9 billion.
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Standard & Poor's 400 MidCap Index |
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An index of the smallest capital stocks covered by Standard & Poor's. The stocks normally have a market capitalization of less than $1 billion (there is some overlap with the Standard & Poor's MidCap Index in terms of size).
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Standard & Poor's 600 SmallCap Index |
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An index that combines the S&P 500, the S& P 400 MidCap, and the S&P SmallCap 600.
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Standard & Poor's 1500 Stock Index |
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An index composed of 100 blue-chip stocks on which the Chicago Board Options Exchange currently has individual option contracts.
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Standard & Poor's 100 Index |
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Each company in the index is weighted by its own total market value as a percentage of the total market value for all firms in the index. Most major indexes such as the S&P 500, S&P 400, and NYSE Index, are value-weighted. With value-weighted indexes, large firms tend to be weighted more heavily than smaller firms.
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value weighted index |
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The index represents 1,700 companies from the New York and American Stock Exchanges and the over-the-counter market. Many individual investors use the Value Line Index because it more closely corresponds to the variety of stocks the average investor may have in his or her portfolio. It is an equal-weighted index, which means each of the 1700 stocks, regardless of market price or total market value, is weighted equally.
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Value Line Average |
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Each stock, regardless of total market value or price, is weighted equally. It is as if there were $100 invested in every stock in the index. The value Line Index is a prime example of an equal-weighted index.
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equal-weighted index |
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A stock market measure comprising 5,000 equity securities. It includes all New York Stock Exchange and American Stock Exchange issues and the most active over-the-counter issues. The index represents the total dollar value, it is , in effect, a value-weighted measure.
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Wilshire 5000 Equity Index |
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The index is composed of the 3,000 largest U.S. stocks as measured by market capitalization. It is value-weighted.
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Russell 3000 Index |
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The index includes the 1,000 largest firms out of the Russell 3000 Index. It is value-weighted.
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Russell 1000 Index |
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The index includes the 2,000 smallest firms out of the Russelll 3000 index. It is value-weighted.
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Russell 2000 |
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This is a stock index of 150 worldwide corporations. It only includes blue-chip stocks and is created by the Dow Jones Company, the publisher of the Wall Street Journal.
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The Global Dow |
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The most widely watched country index outside the United States. It covers 225 large Japanese companies.
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Tokyo Nikkei 225 Average |
