Equity Option

An option contract that grants the holder the right to buy or sell a specific number of shares of stock at a specified price during a specific period of time.

Record Date

This is the date that a stock must be in your account for you to receive a dividend. The record date has nothing to do with how we trade stock splits.

PEG

Price to earnings ratio divided by the forecast annual earnings growth rate. Traditionally, stocks were said to be fairly valued when the p/e and the forecast growth rate were equal.

Long Tail

A ‘long tail’ means the low for the day was well below the close. In other words, the market opened, sellers took over and pushed the index down, but then buyers came back in and ran the index back up to where it opened. The buyers had the last say on the day and showed a lot of strength moving up. That tends to show a reversal in the buying patterns and foretells a further rise from here for the short term.

Relative Position Report

A TSX report that ranks each Participating Organization’s/Member’s trading activity relative to the total market and the other POs/Members. It is produced monthly for each TSX Group PO/Member.

Redeemable Security

A security that carries a condition giving the issuer a right to call in and retire that security at a certain price and for a certain period of time.

Percent to Double

We use this with respect to options trades in determining if we like an option enough to buy it or if we are in an option, if we want to stay in it. This calculation tells you how far the underlying stock must move before the option will double in value. We prefer a 7%-10% value, less if we can get it. This does not mean we will not buy an option, but it does give us insight as to how long we will hold it. Percent to double is a Smith Barney proprietary calculation.