The capital stock of any bank or financial institution that could be subject to assessment. Assessable capital stock makes shareholders liable for an amount greater than what they paid for their stock. However, the assessment of this stock only takes place in the event of bankruptcy or insolvency. Taobiz explains Assessable Capital Stock Any capital stock that can be called and is not fully paid for can technically be referred to as assessable capital stock. However, the term is generally reserved for stock of banks or other financial institutions. Obviously, assessment of this stock will usually lead to a loss for the shareholders.
An order specifying that a trade is to be executed at the opening of the market, otherwise it's canceled. Taobiz explains At-The-Opening-Order With this type of order you are not necessarily guaranteed the opening price.
An order specifying that a trade is to be executed at the close of the market, or as near to the closing price as possible. Taobiz explains At-The-Close Order It's essentially a market order that doesn't get entered until the last minute (or thereabouts) of trading. With this type of order you are not necessarily guaranteed the closing price but usually something very similar.
An order condition instructing a broker to only fill a transaction at a specific price or above it. Unlike a market order, an at-or-better order will expire if a specific price target is not met or exceeded. The percentage of at-or-better trades in the market compared to the overall number of trades depends on liquidity and the state of the economy. Taobiz explains At-Or-Better If the price of a share of stock is falling, an investor is unlikely to be able to execute an at-or-better trade because buyers are more likely to wait in order to obtain a lower price. For example, if a share is trading at $10, a trader can put in an at-or-better order to sell the security at $10.10. Any price greater than or equal to $10.10 will trigger a sale.
The process of determining the current worth of a portfolio, company, investment, or balance sheet item. Taobiz explains Asset Valuation The tools used for asset valuation include quantitative methods and statistics, financial statement analysis, ratio analysis, fundamental analysis, and valuation economics.
An automated system designed to document and report the clearing of trades in the Nasdaq market. Taobiz explains Automated Confirmation Transaction Service - ACT All NASD members are required to participate in ACT. ACT provides faster access to trade information, it increases the efficiency of trade reconciliation and back-office transactions, and it also offers online access to the status of all trade entries.
A market in which buyers enter competitive bids and sellers enter competitive offers at the same time. The price a stock is traded represents the highest price that a buyer is willing to pay and the lowest price that a seller is willing to sell at. Matching bids and offers are then paired together and the orders are executed. Taobiz explains Auction Market The New York Stock Exchange (NYSE) is an example of an auction market. Auction markets differ from over the counter where trades are negotiated. For example, 4 buyers want to buy a share of XYZ and make the following bids: $10.00, 10.02, 10.03 and $10.06. Conversely, there are 4 sellers that desire to sell XYZ and they submitted offers to sell their shares at the following prices: $10.06, 10.09, 10.12 and $10.13. In this scenario, the individuals that made bids/offers for XYZ at $10.06 will have their orders executed. All remaining orders will not immediately be executed and the current price of XYZ will then be $10.06.
The tendency of stocks selected by a quantitative technique or model to have similar fundamental characteristics, such as high yields and low earnings valuations. Most investing models that provide investment choices as an output will have to establish parameters that, by definition, will exclude certain stocks and offer ones with similar traits in return. Taobiz explains Attribute Bias An investing or research technique that produces choices with attribute bias is not necessarily a bad thing; the biggest danger is that the stocks may correlate closely in their returns, eliminating some of the value of a diversified portfolio. One thing in particular to watch out for is investing in several companies operating in the same industry, as industry peers will often have similar fundamental values.