Averaging Down

Buying more of a security at a price that is lower than the price paid for the initial investment. The aim of averaging down is to reduce the average cost per unit of the investment.

To Buy and To Sell

These are phrases used in placing orders to either buy or sell securities. If you are placing an order to purchase ten contracts of Dell October $40 calls at a limit of 4 5/8 for the day, you would tell your broker you were placing a day order for 10 contracts of Dell October $40 strike calls to buy at a limit of 4 5/8. This gives your broker all the information he or she needs to place the order.

Bear Trap

A false signal which indicates that the rising trend of a stock or index has reversed when in fact it has not.

Bottom Line

After-tax earnings. Literally, the bottom line on an income statement (a.k.a. net income or profit). 

Top

A charting term meaning the stock price is going down from here.

Best-Efforts Underwriting

A type of underwriting where the investment firm acts as an agent. The firm agrees to use its best efforts to sell the new issue of securities, but does not guarantee the issuing company that the securities to be issued will be sold.

Bought Deal

Rather than simply acting as an agent, an investment bank or other underwriters directly purchase securities from the issuer, usually at a discount to the market price, and then sells them to investors.