A slang term for money invested in a security with minor hopes of appreciation or earning a return. The stock may also be referred as dead money by analysts, as a warning to investors who might purchase the shares. Taobiz explains Dead Money Funds that are not earning interest or income are known as dead money. Some investors will hold a stock despite recent price drops, hoping that it will turn around and earn back some of the lost value. However, if the investment is dead money, the likelihood of a turnaround is low, and investors should consider selling the shares before incurring additional losses.
An electronic system that increases order efficiency by routing orders for listed securities directly to a specialist on the trading floor, instead of through a broker. Also known as "SuperDOT." Taobiz explains Designated Order Turnaround - DOT (SuperDOT) The DOT system is used by the New York Stock Exchange for small order entries, limit orders, and basket and program trades.
A negotiable financial instrument issued by a bank to represent a foreign company's publicly traded securities. The depositary receipt trades on a local stock exchange. Taobiz explains Depositary Receipt Depositary receipts make it easier to buy shares in foreign companies because the shares of the company don't have to leave the home state. When the depositary bank is in the U.S., the instruments are known as American Depositary Receipts (ADRs). European banks issue European depositary receipts, and other banks issue global depositary receipts (GDRs).
A securities industry procedure in which the buyer's payment for securities is due at the time of delivery. Security delivery and payment are simultaneous. Taobiz explains Delivery Versus Payment - DVP Also known as delivery against payment, delivery against cash, or from the sell side.
1. A share that does not have any rights to the assets of a company undergoing bankruptcy until all common and preferred shareholders are paid. 2. A method of stock payment to directors and executives of a company through the deposit of shares into a locked account. The value of these shares fluctuate with the market and cannot be accessed by the beneficiary for the purpose of liquidation until they are no longer employees of the company. 3. A share generally issued to company founders that restricts their receipt of dividends until dividends have been distributed to all other classes of shareholders. Taobiz explains Deferred Share 1. Subordinate to all other classes of common and preferred stock, these shares are last in line when a company goes bankrupt and liquidates all assets. 2. These are different from phantom stocks because they don't allow for payment in cash. Also, rather than actual deposits of securities, companies sometimes maintain bookkeeping entries of cash equaling an offsetting security position. When the executive or director leaves the company, the cash is converted into stocks at market value. 3. No longer commonly used, these shares provided its holders with large dividend payouts only after all other classes of shareholders are paid. Holders of deferred shares had access to all the remaining profits after all obligations were met.
A company whose sales and earnings remain relatively stable during both economic upturns and downturns. Taobiz explains Defensive Company Companies within the utilities industry, such as water and electricity companies, are defensive companies since their goods and services have inelastic demand. The stock of defensive companies is often classified as defensive stock.
An investment that is an attractive buy because it is low risk, not because of its return potential. Taobiz explains Defensive Buy Many investors view utility stocks as a defensive buy.
A designation on an exchange's ticker tape that refers to the absence of one or more price digits caused by tape delay. Digits deleted comes into effect when the tape announcements start falling too far behind trading activity. only the last digit and fraction are reported until the tape catches up. Taobiz explains Digits Deleted By deleting digits, the tape saves space and is able to report more prices in a shorter amount of time. When the tape catches up with the trading activity, the numbers begin reporting as normal. The end of digits deleted is known as digits resumed. For example, the price of 34 1/5 would become 4 1/5 under digits deleted.