A slang term used to describe an investor who tends to trade in high-risk investment vehicles or markets. Spice traders prefer to invest in riskier endeavors and seek higher risk premiums for the risk that they take on. A spice trader can invest in any number of investment vehicles or markets. Investing in emerging or frontier markets, junk bonds, exotic options, and derivatives and stocks trade on the pink sheets are all investments that a spice trader may take on. The primary motive for a spice trader is to increase returns by investing in high-risk, highly speculative assets/debentures/markets. As a result, spice traders are able to demand a greater premium for the increased risk that they take on.
A measure of price trend that indicates how a stock is performing relative to other stocks in its industry. |||It is calculated dividing the price performance of a stock by the price performance of an appropriate index for the same time period.
A slang term used to describe someone considered to have bad luck with stock picking. Coolers are usually blamed for the poor performance of a stock after they have either purchased or recommended those shares. Taobiz explains Cooler The term "cooler" has been used to describe individuals who are perceived to have bad luck, and who transfer that luck to others. Some superstitious investors believe that equities tend to perform poorly once purchased by a cooler, and that performance rebounds when the cooler sells his or her shares. Many television and digital media analysts have been referred to as coolers following the poor performances of companies to which they had previously given "buy" ratings.
A term used to describe interest that is considered to be paid, even through no interest payment has been made. Imputed interest is calculated based on the actual payments that are to be, but have not yet been, paid. This interest is important for discount bonds and other securities that are sold below face value and mature at par. The IRS uses an accretive method for calculating the imputed interest on Treasury bonds, which are taxed yearly, even though no interest is paid until maturity.
A ratio that indicates the efficiency and profitability of a company's capital investments.Calculated as: |||ROCE should always be higher than the rate at which the company borrows, otherwise any increase in borrowing will reduce shareholders' earnings.A variation of this ratio is return on average capital employed (ROACE), which takes the average of opening and closing capital employed for the time period.
Preferred stock that includes an option for the holder to convert the preferred shares into a fixed number of common shares, usually anytime after a predetermined date. Also known as "convertible preferred shares". Taobiz explains Convertible Preferred Stock Most convertible preferred stock is exchanged at the request of the shareholder, but sometimes there is a provision that allows the company (or issuer) to force conversion. The value of convertible common stock is ultimately based on the performance (or lack thereof) of the common stock.
When an individual makes a purchase on behalf of someone who otherwise would be unable to make the purchase, and the purchaser has no intention of using or controlling the purchased item. In many cases, straw buying is an illegal activity. Straw buying can take place in a variety of situations. One type of straw buying is a form of mortgage fraud, where a "straw buyer" applies for a mortgage for a property that someone else will actually control and live in. The straw buyer typically has better credit, so he or she poses as the buyer and is approved for the loan. A monetary award is usually provided to the straw buyer in exchange for his or her participation in the fraud.
The price per share at which a convertible security, such as corporate bonds or preferred shares, can be converted into common stock. Taobiz explains Conversion Price The conversion price is determined when the convertible security is issued and can be found in the bond indenture (in the case of convertible bonds) or in the security prospectus (in the case of convertible preferred shares). The conversion price is essential in determining the number of shares to be received, by computing the quotient of the principal value of the convertible security divided by the conversion price. Usually, the conversion price is set at a significant amount higher than the current price of the common stock, so as to make conversion desirable only if a company's common shares experience a significant increase in value.