A tax concept whereby the lender of a stock receives the equivalent dividend payment from the borrower of the stock. Taobiz explains Manufactured Payment When lending stock, the lender usually maintains the right to ownership of dividend payments and special disbursements. Thus, the borrower is responsible for payment of such distributions when they occur.
A method of trading with the help of a dealer or broker, versus trading automatically. Manual executions tend to be slower than automatic ones, in which trades are inputted quickly and often in real time, thus giving investors a time advantage. Different fees are charged by exchanges for manual executions versus automatic executions. Taobiz explains Manual Execution Securities traded manually require several extra steps to process the trade and can take several minutes to actually be executed. Since stock and forex markets are so fast paced where millions of transactions are done in minutes and the price of a stock or currency can rise or fall almost instantly, a manual execution could place investors at a disadvantage.
A subset of products or securities that is designed to mimic the performance of an overall market. Market baskets contain a fixed selection of items, which are used to track such things as inflation, prices or performance levels. Taobiz explains Market Basket For investors, the market basket is the principal idea behind index funds. A sample of stocks, bonds or other securities are placed in a portfolio that is expected to represent all aspects of the market. This provides investors with a benchmark against which to compare their investment returns. Another popular market basket relates to the Consumer Price Index (CPI), which tracks a variety of consumer goods. The CPI looks at the price levels of consumer products and provides an estimate for inflation.
A finanicial term for the effect of certain internal or market forces on a company's gross, operating or net margins. If something happens to make a company's costs rise or revenues fall, margins will become compressed, reducing net earnings. Things that can cause margin pressure include: 1. When a new competitor enters the business and increases its product offering or lowers its costs 2. When commodity costs rise or other costs within the supply chain are rising 3. When increased regulatory controls are imposed on the company or industry 4. When new legislation is introduced that fundamentally changes the markets in which the company competes 5. When internal production problems or delays arise 6. When rising selling, general and administrative expense (SG&A) costs occur without a proportional rise in revenue Taobiz explains Margin Pressure Margin pressure can be related to macroeconomic events, such as rising oil prices, or company-specific events, such as a loss of market share. Investors expect margins to fluctuate over time, but severe margin pressures, or those that could exist for a long time, will usually drag down a stock even in advance of an actual earnings decline.
An observational theory stating that in certain stocks at certain times, there is a buildup of selling pressure. This occurs as a combined result of sales and a strong wish to sell among those who still hold the stock but fear that selling it may cause further declines. Depending on the overall liquidity in the stock, a market overhang can last for weeks, months or longer. Market overhang usually relates to trading in one security but can also apply to larger areas of the market, such as an entire sector. Taobiz explains Market Overhang Market overhang is most often felt and created by institutional investors, who may have a large block of shares they wish to sell and are aware of high selling interest across the market for the stock. Another scenario arises when a large shareholder is thought to be looking at selling his or her stake. This creates an overhang in the stock, which prevents investors from buying the stock until the large shareholder is done selling his stake. Market overhang can also develop in a poorly-performing IPO when the lockup period ends and insiders look to unload their recently-acquired shares.
A common phrase meaning the market (or a major market index) is trading higher than the previous closing price. Taobiz explains Market Is Up The opposite would be the "market is down" or the "market is off".
A common phrase meaning that the market (or a major market index) is trading below the previous closing price. Taobiz explains Market Is Off The opposite would be the "market is up".
The market's ability to sustain relatively large market orders without impacting the price of the security. This considers the overall level and breadth of open orders and usually refers to trading within an individual security. Taobiz explains Market Depth For example, if the market for a stock is "deep", there will be a sufficient volume of pending orders on both the bid and ask side, preventing a large order from significantly moving the price. Market depth is closely related to liquidity and volume within a security, but does not mean that every stock showing a high volume of trades has good market depth. On any given day there may be an imbalance of orders large enough to create high volatility, even for stocks with the highest daily volumes. The decimalization of ticks on the major U.S. exchanges has been said to increase overall market depth, as evidenced by the decreased importance of market makers, a position needed in the past to prevent order imbalances.