A type of incoming cash flow that an investor creates with certain financial securities to produce a dividend-like payment stream that resembles the periodic cash receipts from a dividend-paying stock. Taobiz explains Synthetic Dividend For example, suppose an investor owns shares in a company that does not pay a quarterly dividend. In order to create a cash-flow stream from the shares, the investor could write covered call options on the underlying stock. By doing so, he or she would receive the option premiums as an incoming cash flow, but would be obligated to sell the shares to the option-buyer should that person choose to exercise the options. This situation, while limiting the potential price appreciation the investor can realize from his or her own shares, creates a dividend-like cash flow stream.
A situation in which the values of variables occur at regular frequencies, and the mean, median and mode occur at the same point. Unlike asymmetrical distribution, symmetrical distribution does not skew. A symmetrical distribution is commonly shaped like a bell curve when depicted on a graph. If a line is drawn down the middle of the graph, the two sides will mirror each other. Also called a "symmetric distribution" or "normal distribution". Taobiz explains Symmetrical Distribution A type of symmetrical distribution that is not shaped like a bell curve is a bimodal symmetric distribution. This graph is shaped like two bell curves placed side by side. The two sides of this graph still mirror each other; however, only the mean and median occur at the same point - the center of the graph. The modes occur at two points: the highest point in each of the two bell curves.
1. A fluctuation in the value of an asset, liability or account. This term is most commonly used when referring to a situation in which the price of an asset experiences a significant change over a short period. 2. A short-term trading strategy in which a trader attempts to capture gains by holding a security for only a few days. Also known as "swing trading". Taobiz explains Swing 1. The volatility that exists in the financial markets can be seen easily when the price of a certain security undergoes rapid changes in value. These sharp shifts are often referred to as a swing. For example, it is not uncommon to see a major index swing from negative territory to positive territory just prior to the market close. 2. Swing trading is often used by individual investors since their small positions won't have a dramatic impact on the price of the security. On the other hand, financial institutions do not have the luxury of entering or exiting a position over a matter of days since the size of their orders can greatly influence the price of the asset.
A special feature or benefit added to a debt instrument (such as bonds) or a preferred stock offering to increase its saleability in the markets. Two popular forms of sweeteners are warrants and rights, which allow the holder to either convert securities into stock at a later date or purchase shares at below-market prices. Taobiz explains Sweetener Sweeteners are especially useful for companies that are having a hard time attracting investors or raising capital at affordable prices. A given company may want to conduct a standard debt offering, but if there isn't enough investor appetite to sell all of the debt, the sweetener can help attract enough investors to sell the entire issue. Sweeteners will always cost something extra to the company giving them away, but the exact cost may not be calculable until some date in the future.
A type of market order in which the broker splits an order into numerous parts comprising the best prices and amounts at that price currently offered on the market for speedier order execution. It is used by traders who care more about entering the stock as quickly as possible and less about the price. Taobiz explains Sweep-To-Fill Order For example, if a trader wants to buy 1,000 shares as quickly as possible before the company issues an earnings report, he or she may use a sweep-to-fill order. If there were 200 shares offered at $40 from his/her broker, 300 shares at $42 from another broker, and 500 shares at $43, the order for 1,000 shares would be split up to match the share amounts available from each broker. The trader would receive an average price of $42.10 and would be able to buy the shares quickly.
The ratio in which an acquiring company will offer its own shares in exchange for the target company's shares during a merger or acquisition. To calculate the swap ratio, companies analyze financial ratios such as book value, earnings per share, profits after tax and dividends paid, as well as other factors, such as the reasons for the merger or acquisition. Taobiz explains Swap Ratio For example, if a company offers a swap ratio of 1:1.5, it will provide one share of its own company for every 1.5 shares of the company being acquired. This can also be applied as a debt/equity swap, when a company wants investors to trade their bonds with the company being acquired for the acquiring company's own shares.
A group of stocks that are chosen according to the companies' ability to provide products and services while contributing to a sustainable economy. The SB20 are selected yearly by a panel of judges with experience in analyzing sustainable stocks. The list attempts to identify innovative and progressive companies with the potential to positively affect the goal of a more sustainable society. Taobiz explains Sustainable Business 20 - SB20 The SB20 is not a list of top buys. Rather, it is a list of companies that are both financially strong and sustainable. The stock list comprises companies of various sizes, locations and industries, but it doesn't create a well diversified portfolio. Two main criteria are used when picking SB20 stock: Sustainable: the company must be exciting and must excel in solving social or environmental problems. Financial: The company must be profitable (or close to it) and have a stock trading over $1.00.
The price level which, historically, a stock has had difficulty falling below. It is thought of as the level at which a lot of buyers tend to enter the stock. Often referred to as the "support level". Taobiz explains Support (Support Level) If the price of a stock falls towards a support level it is a test for the stock: the support will either be reconfirmed or wiped out. It will be reconfirmed if a lot of buyers move into the stock, causing it to rise and move away from the support level. It will be wiped out if buyers will not enter the stock and the stock falls below the support.