Archives

A trader employed by a securities firm who is required to maintain reasonable liquidity in securities markets by making firm bids or offers for one or more designated securities up to a specified minimum guaranteed fill.

This is a condition resulting from selling an option and not owning the related securities.

Debt instruments. Preferred shareholders are paid ahead of common stock holders in the event the corporation is liquidated. Convertible preferred shares can be converted into common stock according to predetermined conditions.

Percentage of earnings paid out in dividends.

A special form of corporation that invests primarily in real estate. REITs do not pay federal income taxes as long as they pay out 90% of their earnings to shareholders in the form of dividends.

A transaction or series of transactions that includes a securities issuance made by a listed issuer to parties vending securities or other assets into the listed issuer (the new security’s holders), such that after completion of the transaction(s), the new security’s holders will own more than 50% of the outstanding voting securities of the listed issuer, with an accompanying change of control of the listed issuer. A reverse takeover (RTO)/backdoor listing can be completed through various transactions, including a business or asset acquisition, an amalgamation, a plan of arrangement, or other form of reorganization. The listing of securities of an issuer formed in accordance with an RTO/backdoor listing is treated as a new listing.

Selling stock you don’t own. You hope it drops in price so you can buy it back later at a lower price. You must have a margin account with your broker to sell short.

A price gap describes the situation where a stock opens at a price either higher or lower than the closing price the day before. This usually happens when some news affecting the value of the stock is announced after the market closes, e.g., positive or negative earnings, a buy-out, etc. Stocks that gap at the open often move back toward the previous close before moving again, but not always. Strong news such as projected higher earnings from the company tend to drive the stock without the pull back.

dividend yield of a stock compared the dividend yield of the S&P 500.

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.