Archives

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.

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.

Registered Traders

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.

REIT (real estate investment trust)

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.

Preferred Shares

These are a type of stock issued by a company. Preferred shares give such shareholders a fixed dividend from the company’s earnings. Preferred shareholders also get paid before common shareholders.

Preferred Stock

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.

Price Gap

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.