A type of equity index that tracks both the capital gains of a group of stocks over time, and assumes that any cash distributions, such as dividends, are reinvested back into the index. Looking at an index's total return displays a more accurate representation of the index's performance. By assuming dividends are reinvested, you effectively have accounted for stocks in an index that do not issue dividends and instead, reinvest their earnings within the underlying company. Taobiz explains Total Return Index The Standard & Poor's 500 Index (S&P 500) is one example of a total return index. The total return indexes follow a similar pattern in which many mutual funds operate, where all resulting cash payouts are automatically reinvested back into the fund itself. While most total return indexes refer to equity based indexes, there are total return index that for bonds, which assumes that all coupon payments and redemptions are reinvested by buying more bonds in the index.
A valuation measurement used to compare companies with varying levels of debt. This is calculated as: TEV = Market Capitalization + Interest Bearing Debt + Preferred Stock - Excess Cash. Watch: Enterprise Value Taobiz explains Total Enterprise Value - TEV Some people just use market capitalization as the value of a company, but some companies issue more equity than others, so this is why we include debt.
A slang term for an electronic trading facility where local investors can get together and trade for their own accounts. The arcade is often run by a member of a clearing organization, and has no physical trading area or pit. Taobiz explains Trading Arcade The users of an arcade are referred to as "e-locals", because their trading activities are all electronically executed. Trading arcades are often large rooms with computer terminals and television sets everywhere, allowing traders to react quickly to news and enjoy the convenience of electronic trades.
A trade transacted from a specialist's account even though there is a public order that offsets the trade. Taobiz explains Trading Ahead Trading ahead is a violation of a specialist's negative obligation to New York Stock Exchange customers. By trading from his or her own account rather than letting public orders match one another, the specialist is robbing the public of its opportunity to transact the security.
A sign, usually based on technical indicators, that it is a good time to buy or sell a particular security. Trade signals come in a variety of forms, including bull or bear pennants, rectangles, triangles and wedges, as well as head-and-shoulders chart patterns. Trade signals may also bring attention to abnormal volumes, options activity and short interest. Taobiz explains Trade Signal Trade signals can also be combined with fundamental analysis to give investors another weapon in their stock trading arsenal. In volatile markets and/or with high-beta stocks, using trade signals can be invaluable to investors - not only to point out promising opportunities as they appear, but also to signal when they may disappear.
To resume trading activities after having been shut down (halted) for some period of time. This can relate to trading between nations, or the resumption of open-market trading in a security such as a common stock or even an entire exchange. Taobiz explains Trade Resumption Trading will be halted in a security if there is material information that needs time to disseminate, or fundamental questions have been raised about the reliability of previously-released information.
A systematic method for screening and evaluating stocks, determining the amount of risk that is or should be taken, and formulating short and long-term investment objectives. A successful trading plan will also involve details like the type of trading system to be used. Most plans require the use of various types of technical analysis tools. Taobiz explains Trading Plan Trading plans can involve any level of risk and accomplish many different investment objectives. Good trading plans will also provide guidance on trading strategies for stop-losses. Diversification and flexibility are other important factors to consider.
A temporary suspension in the trading of a particular security on one or more exchanges, usually in anticipation of a news announcement or to correct an order imbalance. A trading halt may also be imposed for purely regulatory reasons. During a trading halt, open orders may be canceled and options may be exercised. Taobiz explains Trading Halt A trading halt gives all investors equal opportunity to evaluate news and make buy, sell or hold decisions on that basis. The stock exchange can also halt a stock at any time if it suspects unusual activity related to a stock's price. The stock will typically resume trading after 30 minutes, once news from the issuing company has been disseminated.