144A
A Securities and Exchange Commission (SEC) rule allowing for the resale of privately placed securities to qualified institutional buyers.
Fixed Income Glossary
Abbreviation
A feature allowing an issuer to redeem a security before its maturity date. This provision grants flexibility to manage debt but may disrupt investors’ expected income streams.
Accrual Day Count
The method used to calculate the amount of accrued interest on a fixed income security between coupon payment dates. Common day count conventions include Actual/Actual, 30/360, and Actual/360.
accrued interest
The amount of interest that has accumulated on a fixed income security since the last interest payment date. It represents the portion of the next interest payment that belongs to the current owner of the security.
Action
In the context of fixed income securities, this term may refer to a trade or transaction executed by an investor or trader.
Ad Valorem Tax Status
The tax status of a security based on its value, typically used in the context of municipal bonds where taxes are assessed based on the property’s value.
Additional Offerings
Additional issuances of a security beyond the initial offering, often done to raise additional capital or meet investor demand.
adjusted options
Options contracts that have been modified or altered in some way, typically to account for corporate actions such as stock splits, mergers, or acquisitions.
Advance Refunding
A municipal bond refunding technique where the issuer sets aside funds in an escrow account to retire existing bonds before their maturity date. This is done to take advantage of lower interest rates.
Advanced Search
A feature in financial databases or platforms that allows users to refine their search criteria using advanced filters or parameters.
Advances
In financial markets, “advances” indicate the total count of securities or stocks that have closed at a higher price compared to their previous closing prices during a specific trading day.
Affiliate Buy
This term denotes information derived from trades reported to TRACE, which is disseminated when the reporting entity indicates the purchase of securities from a non-member entity
Affiliate Sell
Data compiled from all trades reported to TRACE, disseminated when the reporting firm indicates selling securities to a non-member entity associated
Agency Bond
A financial instrument issued by entities like government-sponsored enterprises (GSEs) or government-owned corporations, such as GNMA, FNMA, FHLMC, FHLB, FFCS, or organizations like the Tennessee Valley Authority (TVA). Although agency bonds lack full U.S. government backing (except for GNMA bonds), they typically receive some level of federal support. These bonds are commonly utilized to raise capital, which is then directed towards sectors such as agriculture and housing.
agency/GSE
These bonds come from either official U.S. government organizations or government-backed entities (GSEs) created to support specific borrowers like farmers and homeowners. They’re generally safe investments, though not directly guaranteed by the government. These bonds usually start at $10,000, with additional investments made in increments of $5,000 or more, depending on the platform.
all or none
This term describes orders placed in the secondary fixed income market that require complete execution or none at all. If the order cannot be fulfilled entirely, it will be canceled rather than partially executed.
All Securtities
This term refers to comprehensive data covering all types of securities that meet the eligibility criteria for reporting on the TRACE platform on a specific day.
Alternative Minimum Tax (AMT)
The Alternative Minimum Tax (AMT) is a backup tax system created by Congress to ensure that everyone pays a minimum amount of tax, regardless of deductions or credits. If your regular tax bill is below a certain threshold, you may need to pay the AMT instead.
Alternative Trading System (ATS)
An Alternative Trading System (ATS) is like an online marketplace where people can directly buy and sell stocks and other securities outside of regular stock exchanges.
Amortization
Amortization is the process of gradually paying off a debt over time through regular payments, which cover both the principal amount borrowed and the accrued interest.
Annualized Rate
The Annualized Rate refers to the rate of return on an investment over a period of one year, calculated by adjusting the rate of return from a shorter period to a full year. This adjustment allows for easier comparison of returns across different time frames and investment opportunities.
Annuity
An annuity is a financial product that provides regular payments over a specific period or for life, commonly used for retirement income.
Ask Price
The ask price is the minimum price at which a seller is willing to sell a financial instrument such as a stock, bond, or commodity. It represents the price a buyer must pay to purchase the asset from the seller.
ask yield to maturity
Ask yield to maturity (YTM) is the anticipated return an investor would earn if they purchased a bond at its current ask price and held it until maturity, factoring in reinvested interest payments.
Asset-Backed Security (ABS)
An asset-backed security (ABS) is a type of investment that’s backed by a pool of assets like loans or mortgages. Investors earn money based on the payments made on these underlying assets.
Assumed Yield to Average Life
Assumed Yield to Average Life refers to the estimated yield of a bond or security, calculated based on the assumption that it will be held until its average life, which is the average amount of time it takes for the principal to be repaid.
auction
An auction is a way to buy and sell securities where people bid on them, and the highest bidder wins.
auction date
An auction date is the specific day on which an auction is scheduled to take place for the buying and selling of securities or other assets.
Auto Roll
Auto Roll refers to a feature in trading or investing where a position is automatically renewed or rolled over into a new contract or period without requiring explicit action from the investor or trader.
average coupon rate
The average coupon rate is the mean interest rate paid by a bond’s issuers to its bondholders over a specific period, typically a year. It’s calculated by averaging the coupon rates of all bonds in a particular portfolio or market segment.
Average Life
Average life is the time it takes for a debt security’s principal amount to be repaid to investors, considering both scheduled repayments and prepayments.
Average Loan Size
Average loan size refers to the typical amount of money borrowed in a particular lending program or market segment. It is calculated by dividing the total value of loans issued by the number of loans originated during a specific period.
average price
Average price refers to the mean or typical price of a security or asset over a specified period of time. It is calculated by summing up all individual prices and dividing by the total number of prices observed during that period.
average yield
Average yield is the typical rate of return on an investment, calculated by averaging the yields of different securities or assets in a portfolio.
average yield to worst
Average yield to worst represents the average return an investor can expect from a bond or investment, considering the worst-case scenario where the bond is redeemed early or defaults.
Bank-Qualified
Bank-qualified bonds are special municipal bonds that meet IRS criteria, making them attractive for banks to invest in because banks can get tax benefits from holding them.
Barbell Strategy
The barbell strategy is an investment tactic that combines both low-risk, short-term investments with higher-risk, long-term investments to achieve a balanced portfolio.
basis point
A unit of measure used in finance to express small changes in interest rates, bond yields, or the value of financial instruments. One basis point is equal to 0.01% or one-hundredth of a percent
benchmark formula
A standardized calculation method used to establish benchmark rates or indices in finance for measuring investment performance.
benchmark reference
A standard point of reference, such as an index or rate, used for comparison or evaluation purposes in finance. It serves as a yardstick against which the performance or characteristics of investments or financial instruments are measured.
bid
The highest price a buyer is willing to pay for a security at a given moment in the market.
Bid and Ask
The bid is the highest price a buyer is willing to pay for a security, while the ask is the lowest price a seller is willing to accept. These prices together represent the current market value of the security.
Bid Price
The bid price is the highest price at which a buyer is willing to purchase a security at a given point in time. It represents the maximum amount that a buyer is willing to pay for the security.
bid request
A bid request is a formal solicitation from a seller or issuer for potential buyers or investors to submit bids or offers for purchasing a security or financial instrument. It outlines the terms and conditions of the bid, including the quantity, price, and any other relevant details.
Bill
A “bill” is a short-term debt instrument issued by governments or corporations with a maturity of less than one year.
Bond
A bond is a loan made by an investor to a borrower, typically a government or corporation, in exchange for periodic interest payments and the return of the loan amount at the bond’s maturity.
Bond Anticipatory Note (BAN)
A Bond Anticipatory Note (BAN) is a short-term debt issued by governments to cover immediate expenses until long-term financing is secured.
Bond Coupon
Fixed interest payment made by the issuer to the bondholder at regular intervals, typically annually or semi-annually.
Bond Description
Brief summary outlining the key features and terms of a bond, including its issuer, maturity date, coupon rate, and any special characteristics.
Bond Insurer
A company that provides financial guarantees for bonds, typically municipal bonds, to enhance their creditworthiness and reduce the risk for investors. These insurers assure bondholders that they will receive timely payment of principal and interest even if the issuer defaults.
Bond Mutual Fund (or Bond Fund)
A fund that pools money from multiple investors to invest in a diverse range of bonds, managed by professionals to provide exposure to the fixed income market.
Bond Mutual Fund-Nontaxable
A type of mutual fund primarily investing in tax-exempt municipal bonds, offering potential income exempt from federal income tax and sometimes state and local taxes, depending on the bonds held within the fund’s portfolio.
Bond Mutual Fund—Taxable
A type of mutual fund that invests in a variety of taxable bonds, including corporate bonds, government bonds, and mortgage-backed securities. The income generated by these funds is subject to federal, state, and local taxes, depending on the investor’s tax situation and the type of bonds held within the fund.
Bond Swap
A financial transaction involving the exchange of one bond for another with different terms, such as maturity date, interest rate, or credit quality. Bond swaps are typically undertaken to optimize a portfolio’s characteristics, such as duration or yield, or to capitalize on changes in market conditions.
Bond Symbol
A specific code used to identify a bond for trading and tracking purposes.
bond type
A classification that describes the characteristics and features of a bond, such as its issuer, maturity date, interest payment frequency, and whether it’s callable or convertible.
Bondholder
An individual, institution, or entity that owns one or more bonds issued by a corporation, government, or other organization.
Bondsource
Loans investors make to governments, municipalities, or corporations in exchange for periodic interest payments and repayment of the loan amount at maturity.
Brokered Certificate of Deposit
A type of certificate of deposit (CD) that is sold through a brokerage firm rather than directly from a bank. These CDs typically offer higher interest rates than traditional CDs but may have restrictions on early withdrawal. They are often used by investors seeking to diversify their portfolios with fixed-income investments.
Build America Bond (BAB)
Municipal bond with taxable interest income offering federal subsidies to issuers.
Bull
An investor who anticipates rising prices in the market or a particular asset and buys with the expectation of selling at a higher price.
Bullet Bond
A type of bond that pays interest and returns the principal to the investor all at once, typically at the bond’s maturity date.
buy/sell
Refers to the action of purchasing or selling a security or financial asset in the market. “Buy” indicates the intention to acquire a security, while “sell” indicates the intention to dispose of or liquidate a security.
Buying Treasuries at Auction (Non-Competitive)
This term refers to the process of purchasing U.S. Treasury securities directly from the government at auction without specifying a particular yield. Non-competitive bids are submitted by investors who are willing to accept the yield determined by the auction process. The quantity of securities acquired depends on the amount available for sale and the total demand from all bidders at the auction.
call feature
A bond provision allowing the issuer to repurchase the bond before its maturity date.
Call Method
The process by which a bond issuer exercises its right to redeem the bond, typically involving notifying bondholders and providing instructions for the redemption process.
Call Notification Days
The number of days before a callable bond’s call date on which the issuer must notify bondholders of its intent to call the bonds for redemption.
Call Premium (or Premium Call Price)
The price at which a callable bond can be redeemed by the issuer before its maturity date. It typically represents a premium above the bond’s face value and is paid to bondholders as compensation for the early redemption.
Call Price
The predetermined price at which an issuer can redeem a callable bond before its maturity date. This price is usually set above the bond’s face value and represents the amount the issuer must pay to retire the bond early.
Call Protection
A provision in a bond’s terms that prevents the issuer from exercising its right to call or redeem the bond before a specified period, providing investors with some assurance about the stability of their investment during that time.
call provision
A feature in a bond or other security that gives the issuer the right to redeem the security before its maturity date, typically at a predetermined price or within a specified timeframe.
Call Risk
The possibility that a bond may be redeemed by the issuer before its maturity date, potentially resulting in a loss of anticipated interest income for the bondholder.
Call Schedule
A predetermined timetable outlining when an issuer has the right to redeem a callable bond before its maturity date, typically specifying specific dates and prices at which the issuer can exercise this option.
Call Type
Refers to the nature of the provision in a bond or security that allows the issuer to redeem it before its maturity date, typically categorized as either “callable” if the issuer has the right to redeem, or “puttable” if the holder has the right to sell it back to the issuer.
Call/Sink/Put Features
These are provisions in a bond or security that give the issuer or holder the right to take certain actions before the maturity date. “Call” allows the issuer to redeem the security before maturity, “Sink” refers to a provision where the issuer sets aside funds to retire debt early, and “Put” allows the holder to sell the security back to the issuer before maturity.
callable
Describes a bond or security that the issuer can redeem or repurchase before its maturity date.
Callable Bond or CD
A type of bond or certificate of deposit (CD) that can be redeemed by the issuer before its maturity date, typically at a predetermined price.
called bonds
Bonds that have been redeemed by the issuer before their maturity date, usually because of a call provision.
cash management bills (CMBs)
Short-term securities issued by the U.S. Treasury to cover short-term cash needs, typically with maturities of less than one year. They are often used to manage the government’s cash balances.
Certificate of Deposit (CD)
A bank deposit with a fixed term and interest rate, typically offering higher interest rates than regular savings accounts.
Closed-End Bond Fund
A type of mutual fund with a fixed number of shares traded on an exchange, where the fund’s objective is to invest in a diversified portfolio of bonds.
Commercial Paper
Short-term, unsecured debt issued by corporations to raise funds for financing short-term liabilities such as accounts payable or payroll. Commercial paper typically matures in less than 270 days and is considered a low-risk investment.
Competitive Sale
A method of issuing municipal bonds where potential buyers submit bids specifying the yield or interest rate they are willing to accept. The issuer then selects the bids offering the lowest yields until the total bond amount is sold. This process allows for price discovery and competition among investors.
conditional call
Bond provision allowing early redemption under specific conditions.
conduit bonds
Bonds issued by a government entity or other organization on behalf of a third party, typically a municipality or corporation, to finance specific projects or activities.
conservator
An individual or entity appointed by a court or regulatory authority to oversee and manage the affairs, assets, or financial interests of another person or organization, typically when the latter is unable to do so themselves due to incapacity, financial distress, or other reasons.
Constant perpetuity
Constant perpetuity refers to an investment or financial instrument that provides a fixed stream of payments indefinitely, with no maturity date. This perpetual stream of payments remains constant over time, offering a consistent income stream to the holder without any expectation of principal repayment.
Consumer Price Index Urban (CPI-U)
CPI-U is a measure of price changes for urban consumers, used to track inflation.
contemporaneous cost
Contemporaneous cost refers to the current or immediate cost associated with a particular transaction or activity.
Continuous Call
Continuous call refers to the ability of an issuer to redeem or call bonds at any time, rather than only on specific dates.
continuously callable
Continuously callable refers to a bond that can be redeemed by the issuer at any time, rather than being restricted to specific dates.
Conversion Feature
A conversion feature allows a bondholder to exchange their bond for another security, typically common stock, at a predetermined conversion ratio and within a specified period.
Convertible
Convertible refers to a type of bond or preferred stock that can be exchanged for a predetermined number of shares of common stock at the option of the bondholder or shareholder.
convertible bond
A bond that can be exchanged for a specified number of shares of the issuing company’s common stock.
Convexity
convexity to worst
Convexity to worst is a way to measure how much a bond’s price could change in response to shifts in interest rates, taking into account the most unfavorable scenario for the bondholder.
Corporate Bond
A corporate bond is like a loan that investors give to a company. In return, the company pays interest over time and returns the original amount borrowed when the bond matures.
corporate debt
Corporate debt refers to the money that a company borrows by issuing bonds or taking out loans from investors or financial institutions. This debt is typically used to fund business operations, expansions, or other financial needs of the company.
CorporateNotes ProgramSM
The CorporateNotes ProgramSM is a service provided by banks for corporations to issue short- to medium-term debt securities to investors.
Coupon
A coupon refers to the fixed interest rate paid on a bond or other fixed-income security, typically expressed as a percentage of the bond’s face value. It represents the periodic income paid to bondholders based on the bond’s nominal value.
Coupon Frequency
Coupon frequency is how often bondholders receive interest payments.
Coupon Rate
The coupon rate is the fixed annual interest rate that a bond issuer agrees to pay to bondholders.
Coupon Rate (Floating)
A floating coupon rate is an interest rate on a bond that adjusts periodically based on a specified benchmark or reference rate, such as LIBOR or the prime rate.
Coupon Rate (Inverse Floaters)
Inverse floaters are bonds with interest rates that move in the opposite direction to changes in a specified benchmark rate. If the benchmark rate goes up, the interest rate on an inverse floater goes down, and vice versa.
Coupon Rate Percentage
Coupon rate percentage refers to the annual interest rate paid on a bond, expressed as a percentage of the bond’s face value. For example, if a bond has a face value of $1,000 and a coupon rate of 5%, it will pay $50 in interest annually.
Coupon Type
Coupon type indicates whether a bond pays a fixed or variable interest rate.
Credit Enhancement
Credit enhancement refers to measures taken to improve the creditworthiness of a borrower or debt issuer, usually to obtain more favorable terms for borrowing. This can include providing collateral, obtaining insurance or guarantees, or improving financial ratios.
credit quality
Credit quality assesses how likely a borrower is to repay their debt, ranging from high to low risk.
Credit Rating
A score given to individuals or entities indicating their creditworthiness, typically ranging from excellent to poor.
Credit Risk
The potential that a borrower or issuer will fail to meet their financial obligations, leading to a loss for the lender or investor.
Credit Spread
The difference in yield between a riskier asset, such as a corporate bond, and a safer asset, such as a Treasury bond, of similar maturity. It represents the additional compensation investors require for taking on the higher credit risk associated with the riskier asset.
Credit Watch
A designation given by credit rating agencies to indicate that a particular bond or issuer is under review for a possible credit rating change. This could signal a potential upgrade or downgrade in the creditworthiness of the bond or issuer.
creditor
An individual or institution that extends credit or loans money to another party, with the expectation that the borrowed amount will be repaid, usually with interest, according to agreed-upon terms and conditions.
creditworthiness
Creditworthiness is the evaluation of someone’s ability to repay debts, based on factors like credit history and financial stability.
Cumulative Feature
A cumulative feature refers to the characteristic of certain securities where missed dividend payments accumulate and must be paid in full before any additional dividends can be distributed to shareholders.
Cumulative Maximum Deferral Payment
A cumulative maximum deferral payment refers to the total amount of missed interest or principal payments on a financial instrument that must be repaid in the future.
Current Face Value
Current face value refers to the present or current stated value of a financial instrument, such as a bond or a loan, which may change over time due to factors such as interest accruals, amortization, or changes in market conditions.
current factor
The “current factor” is a ratio used in finance to gauge the market price of a bond relative to its face value.
current factor effective date
The “current factor effective date” refers to the date when the current factor, which represents the present market value of a bond relative to its face value, becomes applicable.
current rate effective date
The “current rate effective date” is the date when a new interest rate becomes active or effective for a financial instrument such as a bond or loan.
Current Yield
Current Yield is the annual income earned from an investment, expressed as a percentage of its current market price.
Current Yield Percentage
Current Yield Percentage refers to the income generated by an investment relative to its current market price, expressed as a percentage.
CUSIP
CUSIP stands for “Committee on Uniform Securities Identification Procedures.” It is a unique nine-character alphanumeric code assigned to each security traded in the United States and Canada. CUSIP numbers are used to facilitate the clearing and settlement process of securities, as well as for record-keeping and identification purposes.
Customer Buy
Customer Buy refers to a transaction where a customer purchases securities through a brokerage or financial institution. This term typically indicates that the purchase is initiated by an individual or entity seeking to acquire securities for investment or trading purposes.
Customer Sell
Customer Sell refers to a transaction where a customer sells securities through a brokerage or financial institution. This term typically indicates that the sale is initiated by an individual or entity seeking to liquidate their holdings of securities for various reasons, such as realizing profits or cutting losses.
date (convertible information)
“Date (convertible information)” refers to the specific date associated with details related to convertible securities, such as conversion deadlines or adjustment dates for conversion ratios.
date/time
“Date/time” refers to a specific point in time, including both the date and the time of day, often used for recording events, transactions, or other time-sensitive information.
Dated Date
The “dated date” is the date from which interest begins to accrue on a bond or other fixed-income security. It marks the starting point for calculating interest payments to bondholders.
day count basis
Day count basis determines how accrued interest is calculated on bonds or fixed-income securities, specifying rules for counting days within a period.
day order
Day order is an instruction given by an investor to a broker or brokerage firm to buy or sell a security at the best available price within the current trading day. If the order cannot be executed during the trading day, it will expire at the end of the day.
De Minimis tax rule
The de minimis tax rule is a provision in tax law that exempts certain small or minimal amounts from taxation or reporting requirements. It allows taxpayers to disregard insignificant amounts of income, gains, or losses, reducing the administrative burden associated with reporting and taxation.
Deal ID
The Deal ID refers to a unique identifier assigned to a specific transaction or deal. It helps in tracking and identifying individual transactions within a larger system or database.
Debenture
Debenture: Unsecured debt instrument issued by a corporation or government, relying on the issuer’s creditworthiness for repayment, with fixed interest payments and a specified maturity date.
debt refinancing
The process of replacing existing debt obligations with new debt, typically to take advantage of lower interest rates, extend the repayment period, or change the terms of the debt to better suit the borrower’s financial situation.
Debt Security
A type of financial asset representing a loan made by an investor to a borrower.
Debt Service
The amount of money required to meet the repayment obligations of a debt, including both principal and interest payments.
Declines
The decrease in the value of a security or financial market over a specific period, typically measured from a previous high point to a subsequent low point.
Default
When a borrower fails to meet the financial obligations or terms of a loan or bond, such as missing interest or principal payments, violating covenants, or declaring bankruptcy.
Defeased, Economically
When funds are set aside in escrow to fulfill the debt service obligations of a bond issue, typically using U.S. Treasuries or other high-quality securities, effectively removing the liability from the issuer’s balance sheet.
Defeased, Legally
When a bond issuer fulfills its obligation to bondholders by setting aside sufficient funds, typically in an escrow account, to retire the bonds at maturity. This legally removes the issuer’s responsibility for the debt, even though the bonds may not yet have matured.
Defensive Stock
Stocks of companies that tend to remain stable or perform well during economic downturns or periods of market volatility. These companies often operate in industries that provide essential goods or services, such as utilities, healthcare, and consumer staples. Investors may turn to defensive stocks as a way to preserve capital and reduce overall portfolio risk during uncertain economic conditions.
Deferred Feature
A characteristic of some financial products where certain benefits or obligations are postponed until a later date.
Delay Days
The number of days it takes for a trade to be processed and settled after the trade date.
Delayed Settlement Date
The date on which the settlement of a trade is postponed beyond the standard settlement period, typically due to certain conditions or circumstances that require additional time for completion.
delete
A command or action to remove specific information or data from a system or record, typically done to eliminate outdated, incorrect, or unnecessary entries.
delivery
Transfer of ownership of a security or financial instrument from one party to another.
depth of book
A measure of market liquidity that refers to the quantity of buy and sell orders at different prices for a particular security or financial instrument. It provides traders with insight into the market’s supply and demand dynamics beyond the best bid and ask prices.
Description
A concise explanation or summary providing key details or characteristics of a particular financial instrument, security, product, or service. It aims to give potential investors or users a clear understanding of what the offering entails.
Discount
A reduction from the nominal or face value of a financial instrument, typically expressed as a percentage. In the context of bonds or other fixed-income securities, it refers to the amount by which the security’s market price is lower than its face value. This difference represents the interest earned by the bondholder until maturity and is a key component of bond pricing and trading.
Discount Rate
The interest rate used to discount future cash flows back to their present value. In finance, the discount rate reflects the time value of money and the risk associated with an investment. It’s commonly used in discounted cash flow (DCF) analysis to determine the present value of future cash flows, such as dividends, interest payments, or business earnings. The discount rate is influenced by factors such as prevailing interest rates, inflation expectations, and the perceived riskiness of the investment.
Discrete Call
A type of call provision in a bond or other security where the issuer can redeem it at predetermined dates or intervals, typically at fixed prices.
Dollar Duration
A measure of the price sensitivity of a bond or bond portfolio to changes in interest rates, expressed in terms of the change in its value for a one percentage point change in interest rates.
Dollar Volume
The total value of securities traded in a specific period, calculated by multiplying the number of shares traded by the average price per share during that period.
domicile country
The country where an individual or entity is officially considered to have a permanent residence or legal presence for tax or regulatory purposes.
dummy CUSIP
A placeholder or temporary identification number used in financial systems or processes where a valid CUSIP (Committee on Uniform Security Identification Procedures) number is required but the actual security hasn’t been assigned one yet. It’s often replaced with the actual CUSIP once the security is officially issued.
Duration
A bond’s sensitivity to interest rate changes, expressed in years.
duration to worst
The shortest duration among a bond’s potential call or prepayment provisions, which represents the bond’s expected price sensitivity to changes in interest rates.
Dutch Auction
An auction process in which the price of an item is gradually lowered until it meets the highest bid. All successful bidders pay the same price per unit, which is the lowest winning bid.
Economic Cycle
The natural fluctuation of economic activity between periods of expansion and contraction, typically characterized by changes in GDP, employment levels, investment, and consumer spending. It consists of four phases: expansion, peak, contraction (or recession), and trough.
Education & Tools
Resources and instruments provided to investors and traders to enhance their understanding of financial markets, investment strategies, and trading techniques. This may include online courses, tutorials, webinars, articles, calculators, research reports, and software applications designed to improve financial literacy and decision-making skills.
Electronic Communication Network (ECN)
A computerized system enabling direct trading of financial instruments among market participants without traditional intermediaries.
Embedded Option
A feature within certain financial securities that allows the issuer or the holder to take specific actions under predetermined conditions, such as the right to buy or sell an asset at a specified price within a specified time frame.
Equity-Linked Security
A financial instrument whose returns are tied to the performance of an underlying equity instrument, such as a stock or a stock index. These securities often offer investors exposure to the potential upside of equities while providing some downside protection or guaranteed returns.
escrow end date
The date on which the escrow account established for a particular financial transaction is scheduled to terminate. This date marks the end of the period during which funds or assets are held in escrow by a third party, typically until certain conditions of the transaction are met. After the escrow end date, the funds or assets are released to the designated parties according to the terms of the agreement.
Escrowed Bond
An Escrowed Bond involves setting aside funds to repay bondholders at maturity or call date, ensuring they receive their principal payments as promised.
estimated annual income (EAI)
Estimated Annual Income (EAI) refers to the projected amount of income an investment is expected to generate over the course of a year. This figure is calculated based on various factors such as interest rates, dividend yields, and expected changes in the value of the investment. EAI is useful for investors to estimate their potential earnings from an investment and make informed decisions about their portfolio.
Estimated Fees
Estimated fees are the anticipated charges or costs associated with a financial transaction or investment.
Estimated Total Cost
Estimated total cost refers to the projected overall expenses associated with a particular financial transaction or investment, taking into account various fees, charges, and other relevant costs.
estimated yield (EY)
Estimated yield (EY) is a projected rate of return on an investment, calculated based on assumptions about future performance and other relevant factors. It provides an approximation of the potential earnings an investor may receive from holding a particular security or asset over a specific period.
Eurobond
A Eurobond is an international bond issued in a currency different from the country where it’s issued.
exchange
An exchange is a marketplace where securities, commodities, derivatives, and other financial instruments are traded. It provides a platform for buyers and sellers to execute transactions.
expected yield
Expected yield refers to the anticipated return on an investment based on various factors such as current market conditions, historical performance, and future expectations. It is an estimate of the income or profit that an investment is expected to generate over a specific period, typically expressed as a percentage of the investment’s value.
Extension Risk
Extension risk refers to the risk that the maturity of a bond or other fixed-income security will extend beyond the expected or initially estimated time frame. This risk is particularly relevant for mortgage-backed securities (MBS) and other asset-backed securities (ABS) where borrowers may refinance their loans, causing the securities to have longer durations than anticipated. Extension risk can lead to lower-than-expected returns for investors, especially in environments of falling interest rates.
extraordinary redemption
Extraordinary redemption is the early repayment of a bond or other fixed-income security due to unusual circumstances, such as financial restructuring or regulatory changes.
Extraordinary Redemption (aka Catastrophic Call)
Extraordinary redemption, also known as a catastrophic call, refers to the premature repayment of a bond or fixed-income security due to exceptional circumstances, such as financial distress or regulatory changes.
Face Value Amount
Face value amount refers to the nominal value of a bond or security, which is the amount that the issuer promises to repay the holder at maturity. It is also known as par value or principal amount.
Factor
A multiplier applied to cash flows in financial calculations, commonly used in mortgage-backed securities to adjust for prepayments of underlying loans.
FDIC certificate
A document issued by the Federal Deposit Insurance Corporation (FDIC) to insure deposits in banks and thrifts against loss in the event of bank failure, providing depositors with confidence and protection for their funds.
FDIC insured
A term indicating that the deposits held in a bank or thrift are protected by the Federal Deposit Insurance Corporation (FDIC), up to the maximum limit allowed by law, in case of bank failure.
Federal Deposit Insurance Corporation (FDIC)
The FDIC, or Federal Deposit Insurance Corporation, is a U.S. government agency that protects depositors’ money in case a bank fails. It provides insurance coverage for deposits up to a certain limit per account holder, per bank. If a bank fails, the FDIC reimburses depositors for their insured funds.
Federal Funds
Federal funds are reserves that banks hold at the Federal Reserve and lend to each other overnight. The interest rate on these loans is called the federal funds rate, which influences short-term interest rates in financial markets.
Federal Funds Rate (or Fed Funds Rate)
The Federal Funds Rate, also known as the Fed Funds Rate, is the interest rate at which banks lend reserves to each other overnight. This rate is set by the Federal Reserve and serves as a key benchmark for short-term interest rates in the financial markets.
Federal Home Loan Mortgage Corporation (FHLMC)
The Federal Home Loan Mortgage Corporation (FHLMC), also known as Freddie Mac, is a government-sponsored enterprise (GSE) that provides liquidity, stability, and affordability to the U.S. housing market. It buys mortgages from lenders, pools them together, and sells them as mortgage-backed securities (MBS) to investors.
Federal National Mortgage Association (FNMA)
The Federal National Mortgage Association (FNMA), commonly known as Fannie Mae, is a government-sponsored enterprise (GSE) that helps facilitate the flow of mortgage money in the United States. It buys mortgages from lenders, pools them together, and sells them as mortgage-backed securities (MBS) to investors.
Federal Savings and Loan Corporation
The Federal Savings and Loan Corporation (FSLIC) was a government agency created to provide deposit insurance for savings and loan institutions in the United States. It insured deposits in savings and loans similar to the way the Federal Deposit Insurance Corporation (FDIC) insures deposits in commercial banks. However, the FSLIC was abolished in 1989 during the savings and loan crisis, and its responsibilities were transferred to the FDIC.
federally tax exempt/taxable
Federally tax-exempt refers to income or investments that are not subject to federal income tax. These typically include municipal bonds issued by state or local governments for specific projects like infrastructure or education. Conversely, federally taxable refers to income or investments that are subject to federal income tax, such as most corporate bonds or interest earned on savings accounts.
Fill or Kill
Fill or Kill (FOK) is a type of order used in trading that instructs the broker to either execute the entire order immediately at the specified price or cancel it entirely (“kill”) if the order cannot be filled completely. This order type is often used when traders want to ensure that their orders are filled entirely and immediately, without any partial executions. If the broker cannot fill the entire order at the specified price, the order is canceled, and no partial execution occurs.
first coupon date
The first coupon date is when bondholders receive their initial interest payment after the bond is issued.
first settlement date
The first settlement date refers to the initial date on which a financial transaction, typically involving the purchase or sale of securities, is completed, and the assets and funds are exchanged between the parties involved.
Fixed Coupon
A fixed coupon refers to a predetermined interest rate that remains constant throughout the life of a bond or other fixed-income security. This fixed rate is used to calculate periodic interest payments made to the bondholder, typically at regular intervals until the bond matures.
Fixed Income Security
A fixed income security is an investment that provides a fixed interest payment at regular intervals, typically until the security reaches maturity. These securities include bonds, certificates of deposit (CDs), preferred stocks, and other debt instruments. They are valued based on factors such as their coupon rate, maturity date, and credit quality. Fixed income securities are often favored by investors seeking steady income streams and relatively lower risk compared to stocks.
fixed rate capital securities
Fixed rate capital securities are financial instruments that pay a fixed interest rate or coupon to investors over a set period.
Floating Rate
Floating rate refers to an interest rate that can change periodically based on fluctuations in a benchmark interest rate or index, typically reflecting current market conditions.
Floating rate Coupons
Floating rate coupons are interest payments on bonds or other debt instruments that fluctuate periodically based on changes in an underlying reference rate, such as LIBOR or the prime rate.
Foreign (i.e., Non-U.S) Bond
A foreign bond refers to a debt security issued by a non-U.S. entity or government in a currency other than the one used in the country where the bond is issued.
Full Faith and Credit
Full faith and credit typically refers to the unconditional guarantee provided by a government to honor its financial obligations. This assurance extends to both principal and interest payments on debt securities issued by the government.
High-Yield Bond
High-yield bonds are debt securities issued by companies or governments with lower credit ratings, typically offering higher interest rates to compensate for the increased risk of default.
histogram
A histogram is a graphical representation of the distribution of numerical data. It consists of bars, where each bar represents a range of values, and the height of the bar corresponds to the frequency or count of data points falling within that range. Histograms are used to visualize the shape, center, and spread of a dataset.
historical inflation factor
The historical inflation factor adjusts financial data or economic indicators for inflation over time.
Hours of Operation
Hours of Operation refers to the period during which a business, service, or facility is open and available for operation or customer service.
Hybrid Preferred Security
A Hybrid Preferred Security is a type of financial instrument that combines features of both equity and debt. It typically pays a fixed dividend like debt but may have the option to convert into common stock, offering potential for capital appreciation like equity.
In Default
“In Default” refers to a situation where a borrower has failed to meet the financial obligations specified in a loan agreement or bond issuance. This failure could involve missing scheduled payments, violating covenants, or any other breach of terms outlined in the borrowing arrangement.
Include Only (I)
“Including Only” (I) refers to a trading instruction where a broker is instructed to fill an order only with the specified security or securities listed and not to include any others. This is typically used to ensure that only the desired assets are included in the transaction.
Income Type
“Income Type” refers to the categorization of income generated by an investment. It could include interest income, dividend income, rental income, or other types of income generated by an asset. Understanding the income type helps investors assess the nature of the returns they can expect from an investment.
increment
“Increment” refers to the increase or change in a quantity, value, or measurement. In financial contexts, it can denote the incremental change in price, quantity, or other financial metrics. For example, an increment of $1 in the price of a stock indicates a $1 increase in its value. Similarly, an increment of 100 shares in trading volume represents an increase of 100 shares being traded.
indenture
An indenture is a legal and binding agreement between a bond issuer and bondholders that outlines the terms and conditions of the bond issuance
index
An index is a statistical measure used to represent changes in a particular financial market, sector, or asset class.
index start level
The index start level refers to the initial value or baseline level of an index at the beginning of a specified period, typically used as a reference point for measuring subsequent changes in the index.
Index-Linked
Index-linked refers to financial products or securities whose returns or payments are linked to the performance of a specific index. This means that changes in the index value will directly impact the returns or payments received by investors holding these securities.
indicated annual dividend (IAD)
Indicated Annual Dividend (IAD) is the expected annual dividend payment per share of a stock, based on the most recent dividend declaration. It indicates the amount of money shareholders can anticipate receiving per share over the next year if the company maintains its current dividend rate.
Industry Group
An Industry Group is a classification system used to categorize companies based on the nature of their business activities. It helps investors and analysts understand the performance and trends within specific sectors of the economy by grouping together companies that operate in similar industries or sectors. This classification facilitates comparisons and analysis within and across industries.
Inflation Accrual
Inflation accrual refers to the increase in the value of an asset or investment due to inflation over time. It accounts for the impact of inflation on the purchasing power of money. Inflation accrual is typically calculated by adjusting the value of an asset or investment by the rate of inflation over a specific period, allowing investors to account for the decrease in the real value of money caused by inflation.
Inflation Factor
The inflation factor represents the adjustment made to account for changes in purchasing power due to inflation. It is typically expressed as a percentage increase or multiplier applied to a financial value to reflect the impact of inflation over time. The inflation factor helps to maintain the real value of assets or investments by adjusting for the decrease in purchasing power caused by inflation.
Inflation Risk (Purchasing Power Risk)
Inflation risk, or purchasing power risk, is the threat of decreasing money value over time due to inflation. It can erode the real rate of return on investments, diminishing future cash flow values and overall wealth.
Inflation-Linked CD
An inflation-linked CD is a type of certificate of deposit (CD) where the interest rate is tied to an inflation index, such as the Consumer Price Index (CPI). This means that the interest paid on the CD adjusts periodically based on changes in the inflation rate, helping to protect the purchasing power of the investor’s funds.
Inflation-Protected Securities (TIPS)
TIPS are U.S. Treasury bonds that safeguard against inflation by adjusting their principal value and interest payments based on changes in the Consumer Price Index (CPI).
Insured Bond
An insured bond is a type of bond that comes with insurance coverage provided by a third-party insurer, typically enhancing its credit rating and reducing the risk associated with default.
Insured Letter of Credit
An insured letter of credit is a financial instrument that guarantees payment from a third-party insurer in case the issuer fails to fulfill its obligations. This insurance provides additional security to the beneficiary of the letter of credit.
Interdealer
Interdealer refers to transactions or activities that occur between different dealers or brokers within the financial market. These transactions typically involve the buying and selling of securities, currencies, or other financial instruments among market participants such as banks, investment firms, and other financial institutions.
interest
Interest refers to the cost of borrowing money or the compensation received for lending money, typically expressed as a percentage of the principal amount. It is a fundamental concept in finance and economics, representing the price paid for the use of funds over a specified period. Interest can be earned on investments such as savings accounts, bonds, or loans, and it plays a crucial role in determining the profitability of financial transactions.
interest accrual date
Interest accrual date is the date from which interest starts accumulating on a financial instrument, such as a bond or a loan. It marks the beginning of the interest-earning period and is typically based on the terms outlined in the financial contract. Interest accrues daily, monthly, quarterly, or annually, depending on the agreement, and is calculated based on the outstanding principal balance and the applicable interest rate.
interest income
Interest income refers to the money earned from investments in interest-bearing financial assets such as bonds, certificates of deposit (CDs), savings accounts, and money market funds. It is typically paid periodically by the issuer of the investment and is based on the interest rate and the amount of principal invested. Interest income is considered a form of passive income and is taxable in most jurisdictions.
Interest Rate Risk
Interest rate risk refers to the possibility of changes in interest rates affecting the value of an investment, particularly fixed-income securities like bonds and CDs.
Interest Type
Interest type refers to the method used to calculate and distribute interest payments on a financial instrument such as a bond or a certificate of deposit (CD). It specifies how interest is accrued and paid out over the life of the investment. Common interest types include fixed rate, floating rate, and zero coupon.
international
“International” refers to anything related to or involving multiple countries. In the context of finance, it often pertains to investments, transactions, or businesses that operate across national borders or have implications beyond a single country’s economy or regulatory environment.
Investment-Grade
“Investment-grade” refers to bonds or other debt securities that are considered to have a relatively low risk of default by credit rating agencies. These securities are typically issued by financially stable companies or governments with strong creditworthiness. Investors often perceive investment-grade securities as safer investments compared to lower-rated or speculative-grade securities, and they typically offer lower yields as a result.
ISIN
ISIN stands for International Securities Identification Number. It is a unique code used to identify securities such as stocks, bonds, and derivatives. ISINs are assigned to securities to facilitate trading and settlement processes, as well as to provide a standardized means of identifying financial instruments globally. Each security is assigned a unique ISIN, which consists of a 12-character alphanumeric code.
issue date
The issue date refers to the date on which a security, such as a bond or stock, is issued by its issuer and made available for purchase by investors. It marks the beginning of the security’s life cycle, and it is the date from which interest accrues or dividends begin to accumulate, depending on the type of security.
Issue Description
The issue description is a concise summary of a security’s key features and terms.
issue price – fixed income
The issue price for fixed income securities refers to the initial price at which the security is offered to investors when it is first issued.
Issue Type
Issue Type refers to the classification or category of a security being issued, such as common stock, preferred stock, bonds, or other types of financial instruments.
Issuer
Issuer refers to the entity, whether a corporation, government, or other organization, that offers and sells securities to investors. The issuer may raise capital by issuing stocks, bonds, or other financial instruments.
issuer events
Issuer events are significant occurrences or developments involving the organization that has issued securities. These events can include corporate actions such as mergers, acquisitions, bankruptcies, dividend declarations, or changes in corporate governance. They are important for investors as they can impact the value or performance of the securities issued by the company.
Issuer Legal Name
The legal name of the entity or organization that issues securities, bonds, or other financial instruments. This name is the official designation of the issuer for legal and regulatory purposes.
Issuer Location
The geographical location where the issuer of securities, bonds, or other financial instruments is legally registered or headquartered. This location may affect the regulatory framework, tax laws, and other factors related to the issuer’s operations and financial obligations.
Issuer Name
The official name of the entity or organization issuing securities, bonds, or other financial instruments. This name identifies the legal entity responsible for fulfilling the terms and conditions associated with the issued securities.
Issuing Agency
The organization or entity responsible for issuing securities or bonds. This could be a government agency, corporation, or other authorized institution that raises funds by selling debt securities to investors.
Key Rate Duration
Key Rate Duration measures bond price sensitivity to changes in specific key interest rates.
Kicker
A “kicker” refers to an additional feature or provision added to a security or financial instrument that can enhance its value or performance.
Ladder
A “ladder” in finance typically refers to a strategy where investments with different maturity dates are evenly spaced out over time. This approach helps spread out risk and provides regular liquidity as investments mature at staggered intervals.
Laddering
“Laddering” is an investment strategy where assets with different maturity dates are spread out evenly over time. For example, in bond investing, this could involve purchasing bonds with staggered maturity dates, such as one-year, two-year, three-year, and so on. This strategy helps manage risk by reducing exposure to interest rate fluctuations and provides a regular income stream as investments mature at different times.
last coupon
“Last coupon” refers to the most recent interest payment made to the bondholder before the current date. It represents the interest accrued on the bond from the last coupon payment date up to the present.
Latest Sale Price
“Latest Sale Price” refers to the price at which the most recent transaction of a security took place. This price represents the most recent valuation of the security based on the last completed trade.
Latest Sale Yield
“Latest Sale Yield” refers to the yield at which the most recent sale of a security occurred. It indicates the annual return earned by an investor if they bought the security at its current market price.
Latest Trade Date
“Latest Trade Date” refers to the date on which the most recent transaction of a security occurred. It indicates the most recent time the security was bought or sold in the market.
Letter of Credit
A “Letter of Credit” is a document issued by a bank or financial institution guaranteeing payment to a seller on behalf of a buyer. It serves as a promise of payment for goods or services provided, ensuring that the seller will receive the agreed-upon amount even if the buyer fails to pay. Letters of credit are commonly used in international trade to reduce the risk for both buyers and sellers involved in transactions.
Limit Price
“Limit Price” is the maximum price set by an investor for buying or selling a security.
Liquid Bond
A “Liquid Bond” refers to a bond that can be easily bought or sold in the market without significantly affecting its price.
Liquidity Risk
“Liquidity Risk” is the potential for an investor to encounter difficulty buying or selling an asset at a desirable price due to a lack of market participants or trading activity.
Listed
“Listed” refers to securities or financial instruments that are available for trading on an organized exchange, such as a stock exchange or bond market.
London Interbank Offered Rate (LIBOR)
The London Interbank Offered Rate (LIBOR) is a widely used benchmark interest rate that indicates the average interest rate at which major global banks can borrow from one another in the London interbank market. It is calculated and published daily by the Intercontinental Exchange (ICE) based on submissions from a panel of banks. LIBOR is used as a reference rate for various financial products and contracts, including loans, mortgages, derivatives, and bonds.
Long-Term Bond
A long-term bond is a debt security with a maturity period typically exceeding 10 years.
LTV (Loan to Value Ratio) (%)
The Loan-to-Value (LTV) ratio expresses the amount of a loan relative to the appraised value of the asset being purchased or financed, usually expressed as a percentage.
Make whole call
A “make whole call” is a bond provision allowing the issuer to repay the bond early, compensating investors for lost interest payments by paying them the present value of future cash flows.
Make-Whole Call Provision
A “make-whole call provision” allows a bond issuer to repay bondholders before maturity by compensating them for the lost interest income.
Managed Account
A “managed account” refers to an investment account that is overseen by a professional money manager or investment advisor on behalf of an individual or institution.
Mandatory Tender
“Mandatory tender” refers to a provision in a bond or other security that requires the issuer to repurchase the security from investors at a predetermined price and date, typically triggered by specific events outlined in the security’s terms and conditions.
marginable security
A marginable security is a type of financial asset that can be used as collateral for borrowing funds from a broker to purchase additional securities. These securities are typically highly liquid and have stable prices, allowing brokers to extend credit to investors against their value.
mark-down
A mark-down refers to the reduction in the price of a security or other asset by a broker when selling it to a customer. This markdown is typically applied to compensate for various factors such as fluctuations in market conditions, transaction costs, or to reflect the broker’s profit margin.
mark-up
The difference between the actual market price of a security and the price at which it is sold to a customer by a broker or dealer. It represents the dealer’s profit or compensation for facilitating the trade.
market fluctuation
Changes in asset prices driven by factors like supply, demand, economic indicators, geopolitics, and investor sentiment.
Market Order
An instruction to buy or sell a security at the current market price, executed as soon as possible at the prevailing market rate.
Markup or Markdown
The difference between the selling price of a security and its current market value. A markup occurs when the selling price is higher than the market value, while a markdown occurs when the selling price is lower than the market value. These terms are commonly used in retail or brokerage contexts to describe the adjustment made to the price of a security for sale to a customer.
Material Deal Change
Significant modification to a transaction, potentially affecting outcomes or parties involved.
Material Events
Significant occurrences or developments that can impact financial markets or investment decisions.
material events – fixed income
Significant occurrences or developments specifically related to fixed income securities or markets that can impact investment strategies, pricing, or risk assessments.
Maturity
The date on which a debt security, such as a bond or a note, becomes due for repayment of the principal amount. It signifies the end of the contract between the issuer and the bondholder, at which point the issuer must repay the principal amount borrowed to the bondholder.
Maturity Date
The date on which the principal amount of a debt security, such as a bond or a note, becomes due and is repaid to the bondholder by the issuer. It represents the end of the term of the security and marks the completion of the contractual obligation between the issuer and the bondholder.
Maturity Range
The range of dates within which the maturity date of a debt security falls. It indicates the span of time between the earliest and latest possible maturity dates for a particular security.
maximum rate
The highest interest rate that can be applied to a debt instrument or loan, as specified in the terms and conditions of the agreement. This rate represents the upper limit beyond which the interest rate cannot increase, providing a safeguard for borrowers against excessively high interest charges.
Minimum Coupon Field
The lowest allowable interest rate on a bond or fixed income security.
minimum rate
The lowest interest rate allowed on a bond or fixed-income security.
Minimum Yield to Maturity Field
The lowest yield to maturity (YTM) that an investor can expect to receive from holding a bond until its maturity date.
Minimum-Maximum (Amount Available) Increment Amounts
The smallest and largest increments by which the available amount for investment can change, typically seen in offerings of bonds or other financial instruments.
Monthly Factor
A value used in financial calculations to adjust for the time value of money, representing the proportion of a year’s interest that accrues in a single month. It’s commonly applied to interest calculations for bonds and other fixed-income securities.
Moody’s
A prominent credit rating agency that evaluates the creditworthiness of issuers and their debt securities. It assigns credit ratings to various entities, including governments, corporations, and financial instruments, to assess the risk of default. Moody’s ratings are widely used by investors and financial institutions to make informed decisions about lending and investment opportunities.
Moody’s Minimum Rating
The lowest credit rating assigned by Moody’s Investors Service to a particular security or issuer that meets its minimum creditworthiness standards. This rating serves as a benchmark for investors, indicating the lowest level of credit risk they are willing to accept in their investment portfolio.
Moody’s rating
Moody’s rating is a credit assessment from Moody’s Investors Service, evaluating an issuer’s creditworthiness for debt securities.
Mortgage Product
A mortgage product refers to a specific type of mortgage offered by a lender, such as a fixed-rate mortgage, adjustable-rate mortgage (ARM), or government-backed mortgage like FHA or VA loans.
Mortgage Program
A mortgage program refers to a set of guidelines and terms established by a lender or financial institution for offering mortgage loans to borrowers. These programs may include various types of mortgages, such as fixed-rate, adjustable-rate, or government-backed loans, along with specific eligibility criteria and terms.
Mortgage-Backed Pass-Through Security
A mortgage-backed pass-through security is an investment representing a claim on cash flows from a pool of mortgage loans, with investors receiving payments consisting of principal and interest from homeowners’ mortgage payments.
Mortgage-Backed Security (MBS)
A mortgage-backed security (MBS) is a type of asset-backed security that represents a claim on the cash flows from a pool of mortgage loans. These loans are typically secured by real estate properties.
Municipal Bond
A municipal bond is a debt security issued by a state, municipality, or county to finance public projects such as roads, schools, and infrastructure. These bonds are typically exempt from federal taxes and may also be exempt from state and local taxes, making them attractive to investors seeking tax-advantaged income.
municipal general obligation bond
A municipal general obligation (GO) bond is a type of municipal bond issued by a state or local government, typically backed by the full faith, credit, and taxing power of the issuing authority. These bonds are used to fund general government operations and projects, such as infrastructure improvements, public services, and other initiatives that benefit the community as a whole.
Municipal Securities Rulemaking Board (MSRB)
The MSRB regulates the municipal securities market to protect investors. It sets rules for brokers, dealers, and municipal advisors.
Negative Credit Watch
Negative Credit Watch is a designation indicating that a credit rating may be downgraded in the near future due to negative developments or impending risks concerning the issuer’s financial health or creditworthiness.
Negotiated Sale
Negotiated Sale refers to the process of selling bonds where the terms, including interest rates and maturity dates, are determined through negotiations between the issuer and underwriters, rather than through a competitive bidding process.
New Issue
New Issue refers to a security, such as a bond or stock, that is offered to the public for the first time. It represents the initial sale of securities by a company or government entity, typically to raise capital for various purposes such as funding projects or expansion.
new issue order
A new issue order is a request to buy securities issued for the first time, allowing investors to purchase them at the initial offering price.
New-Issue CD
A New-Issue CD refers to a certificate of deposit (CD) issued by a bank or financial institution for the first time, often with a fixed interest rate and maturity date.
Next Call Date
The Next Call Date is the date on which the issuer of a callable bond or security has the option to redeem or call back the security before its maturity date.
Next Call Price
The Next Call Price is the price at which the issuer of a callable bond or security has the option to redeem or call back the security before its maturity date.
Next Coupon Date
The Next Coupon Date is the date on which the next coupon payment is scheduled to be made to the bondholder.
Next reset date
The Next Reset Date is the date on which the interest rate on a variable-rate security, such as an adjustable-rate mortgage (ARM) or a floating-rate bond, is next scheduled to be adjusted based on the specified index or benchmark.
Next reset rate
The Next Reset Rate refers to the interest rate that will apply to a variable-rate security, such as an adjustable-rate mortgage (ARM) or a floating-rate bond, after the next reset date. It is determined based on the current market conditions and the terms outlined in the security’s prospectus or contract.
Next Step Date
The Next Step Date refers to the date on which the next action or step is scheduled to occur in a financial transaction or process. It could be a date specified in a contract, agreement, or investment prospectus indicating when the next action, such as a payment, adjustment, or decision, is expected to take place.
Nominal Yield
Stated annual interest rate on a fixed-income security, like a bond or CD.
Noncallable
A type of bond or security that cannot be redeemed by the issuer prior to its maturity date, providing investors with certainty about the timing of their investment returns.
Note
A debt security that typically represents a promise by the issuer to pay a stated amount of interest over a specified period and to repay the principal amount at maturity. Notes usually have shorter maturities than bonds, typically ranging from one to ten years.
Offer
The price at which a seller is willing to sell a security. It represents the lowest price at which a seller is willing to part with their security.
offer price
The price at which a seller is willing to sell a security or financial instrument. It is the price quoted when someone is looking to sell an asset, such as a stock or bond.
Official Statement
Detailed document for municipal bond investors, outlining bond terms, issuer financials, and risks.
Open order
An instruction to buy or sell a security that remains active until it’s executed or canceled by the investor.
option adjusted convexity
Option-Adjusted Convexity (OAC) refers to the measure of the sensitivity of the price of a bond to changes in interest rates, accounting for embedded options such as call or put provisions. It quantifies the curvature of the bond’s price-yield curve and helps investors understand the potential impact of interest rate changes on the bond’s value, taking into account the effect of embedded options.
option adjusted duration
Option-Adjusted Duration (OAD) is a measure of the sensitivity of a bond’s price to changes in interest rates, considering the impact of embedded options such as call or put provisions. Unlike traditional duration, which measures the bond’s interest rate risk assuming no changes in cash flows, OAD adjusts for potential changes in cash flows due to the exercise of embedded options. It provides investors with a more accurate estimate of a bond’s interest rate sensitivity when options are present.
option adjusted spread
Option-Adjusted Spread (OAS) is a measure of the yield spread between a bond with embedded options (such as callable or putable bonds) and a risk-free benchmark, typically a Treasury security. It accounts for the value of the embedded options by adjusting the spread to reflect the additional yield investors require to compensate for the uncertainty associated with these options. OAS is used to compare the relative value of bonds with different option features and to assess their risk-adjusted returns.
Option strategy
Option strategies involve buying and/or selling options to achieve specific investment goals.
Order
An order is a directive given by an investor to buy or sell a security, specifying details such as the security type, quantity, price, and duration.
Order Acknowledgment
An order acknowledgment is a notification sent by a broker or exchange to an investor confirming receipt and acceptance of their order to buy or sell a security.
Order Verification
Order verification is a process in which a broker or exchange confirms the details of a trade before executing it, ensuring accuracy and preventing errors.
Original Face
Original face refers to the initial principal amount of a debt security when it was first issued.
Original issue amount
Original issue amount refers to the total value of a security when it is first issued by the issuer. This amount represents the initial offering price of the security to investors.
Original Issue Discount (OID)
Original Issue Discount (OID) refers to the difference between the face value of a debt instrument (such as a bond) and its issue price when it is first issued to investors. This discount arises when the bond is sold for less than its face value. The OID is typically amortized over the life of the bond, resulting in an increase in the bond’s value over time. This process allows investors to gradually recognize the discount as interest income for tax purposes.
Original Maturity Date
Original Maturity Date is the date on which a debt instrument, such as a bond or loan, was initially scheduled to be repaid in full. It represents the maturity date specified at the time of issuance, before any changes or modifications are made to the terms of the instrument.
outlier bid
An outlier bid refers to an unusually high or low bid price compared to other bids in the market. It may indicate a significant deviation from the prevailing market price or trading activity, potentially suggesting unique circumstances or strategic behavior by the bidder.
Over-the-Counter (OTC)
OTC refers to off-exchange trading where financial instruments are directly traded between parties through a dealer network.
par
“Par” refers to the face value of a bond, which is typically the amount the issuer promises to repay the bondholder at maturity. It’s also used to describe a situation where the market price of a bond equals its face value.
Par Value
Par value is the face value of a bond, representing the amount that the issuer promises to repay the bondholder at maturity. It’s also known as the nominal value or face value of the bond.
participation rate
The participation rate is a term commonly used in the insurance industry, particularly in the context of indexed annuities. It refers to the percentage of an index’s return that is credited to the annuity’s cash value. For example, if the participation rate is 80% and the underlying index gains 10% over a specified period, the annuity’s cash value would increase by 8% (80% of 10%).
pay frequency
Pay frequency refers to how often interest payments or dividends are distributed to investors. It could be monthly, quarterly, semi-annually, or annually, depending on the terms of the investment or security.
Payment in Kind
Payment in Kind (PIK) refers to a method of paying interest or dividends on a financial instrument by issuing additional securities rather than cash. This allows the issuer to conserve cash flow while still meeting its debt obligations.
Pension Funds
Financial vehicles designed to provide retirement income for employees, managed by institutional investors such as insurance companies, mutual funds, or specialized entities.
Perpetual
A type of security or investment without a fixed maturity date, meaning it has no specific end date for repayment of principal or termination of interest payments.
Perpetual Maturity
The characteristic of a financial security that lacks a predetermined maturity date, meaning it does not have an expiration date for repayment of principal.
Phantom Interest
Interest that appears to accrue on a financial instrument but is not actually paid out to the holder. It may result from accounting practices or complex financial structures.
Positive Credit Watch
A designation indicating that a credit rating agency is considering upgrading a bond or issuer’s credit rating in the near future due to positive developments or improved financial conditions.
Pre-refunded Bond
A pre-refunded bond is a municipal bond where the issuer has already set aside funds to repay bondholders before the bond’s maturity date.
pre-refunded price
The pre-refunded price refers to the market price of a bond that has been redeemed or called before its scheduled maturity date, typically because the issuer has set aside funds to repay bondholders early.
Preferred Stock
Corporate ownership with dividend priority over common shares, typically without voting rights.
Preliminary Official Statement (POS)
A document issued by a municipal bond issuer that provides investors with information about the forthcoming bond issue, including its terms, conditions, and risks.
Premium
The amount by which the market price of a bond exceeds its face value or par value.
Premium Bond
A bond that is trading above its face value or par value, usually because its coupon rate is higher than prevailing market interest rates, making it more attractive to investors.
premium, fixed income
A premium in fixed income refers to the price paid for a bond that is higher than its face value or par value. This typically occurs when the bond’s coupon rate is higher than the prevailing interest rates in the market, making it more valuable to investors.
Prepayment Risk
Prepayment risk is the risk that borrowers will repay their loans earlier than expected, which can affect the cash flows of fixed income securities such as mortgage-backed securities (MBS) or callable bonds. This risk is more prevalent when interest rates decline, leading borrowers to refinance their loans at lower rates, causing investors to miss out on anticipated interest payments.
prevailing market price (PMP)
The prevailing market price (PMP) is the current price at which a security is trading in the market. It represents the most recent price at which buyers and sellers have agreed to transact for a particular security at a given point in time.
previous factor
The previous factor refers to the multiplier used to calculate the principal amount of a mortgage-backed security (MBS) or other structured financial product. This factor is applied to the original principal balance to determine the current outstanding balance of the security.
previous factor effective date
The previous factor effective date is the date on which the previous factor used in calculating the principal amount of a mortgage-backed security (MBS) or other structured financial product was established or became effective.
price
Price refers to the amount of money for which a financial instrument, such as a bond or stock, is bought or sold in the market. It represents the value at which buyers and sellers agree to execute a transaction. Prices can fluctuate based on various factors including supply and demand, market sentiment, and economic conditions.
price (ask)
The “ask price” refers to the price at which a seller is willing to sell a security. It represents the minimum price at which someone is willing to part with the security.
price (bid)
The “bid price” refers to the price at which a buyer is willing to purchase a security. It represents the maximum price that a buyer is willing to pay for the security.
Price Change Number
The “price change number” typically refers to the numerical change in the price of a security or financial instrument over a specific period of time. It quantifies the difference between the current price and the previous price, indicating whether the price has increased or decreased.
Price Change Percent
The “price change percent” represents the percentage change in the price of a security or financial instrument over a specific period of time. It indicates the extent of the price movement relative to the previous price, helping investors assess the magnitude of the change in value.
Price Tiers
Price tiers refer to specific price levels within an order book or market depth where buy and sell orders are listed. These tiers show the different prices at which traders are willing to buy or sell a security, providing insight into the market’s liquidity and pricing dynamics.
pricing date
The pricing date is the specific date on which the price of a security or financial instrument is determined or quoted.
primary country
The primary country refers to the main or predominant country associated with a particular security or financial instrument. It indicates the country where the issuer is headquartered or where the majority of its operations are conducted. This information helps investors understand the geographic exposure and regulatory environment of the investment.
Principal
Principal refers to the original amount of money borrowed or invested, excluding any interest or other charges. In the context of bonds or loans, it represents the initial amount that is lent to the borrower and must be repaid at maturity.
principal repayment
Principal repayment refers to the payment made by a borrower to reduce the outstanding balance of a loan or debt. It typically does not include any interest or fees associated with the loan, focusing solely on reducing the original borrowed amount.
Product Subtype
Product subtype refers to a specific category or classification within a broader financial product type. It helps further define and categorize financial instruments based on their unique characteristics or features. For example, within the category of bonds, product subtypes may include government bonds, corporate bonds, municipal bonds, etc.
Product Subtype Asset Description
Product subtype asset description provides detailed information about the specific characteristics or features of a financial product within a particular subtype. It typically includes details such as the issuer, maturity date, coupon rate, credit rating, and any unique attributes that distinguish it from other similar assets within the same subtype. This description helps investors understand the key aspects of the asset and make informed investment decisions.
Product Type
Product type refers to the broad category or classification of a financial instrument or investment product. It categorizes financial assets based on their underlying characteristics, structure, and purpose.
provision
A provision refers to a specific clause or condition included in a legal document, such as a contract, agreement, or law. It outlines particular terms, requirements, or actions that must be adhered to by the parties involved.
Public Securities Association Standard Prepayment Model (PSA)
The Public Securities Association Standard Prepayment Model (PSA) is a method used to forecast the rate at which mortgage-backed securities (MBS) will be repaid by homeowners.
Put Price
Put Price refers to the price at which the holder of a put option has the right, but not the obligation, to sell the underlying asset. It represents the strike price specified in the put option contract.
Put Provision
Put Provision is a feature in certain financial agreements, such as bonds or loans, that allows the holder to demand early repayment of the principal amount under specified conditions.
Put Schedule
Put Schedule refers to the timetable or series of dates specified in a financial contract, such as a bond or loan agreement, outlining when the holder of the security or loan has the right to exercise a put option.
Put Type
Put Type categorizes the put option associated with a financial instrument. It outlines when and how the option can be exercised.
Putable Bond
A Putable Bond is a type of bond that gives the bondholder the right to sell the bond back to the issuer at a predetermined price before the bond’s maturity date.
Quality Spread Differential (QSD)
The Quality Spread Differential (QSD) refers to the difference in yield between securities of different credit qualities but similar maturities. It measures the additional yield investors demand for holding lower-quality bonds compared to higher-quality bonds with similar characteristics.
Quantity (Face Value)
Quantity (Face Value) refers to the nominal value of the bond or security being traded, typically denominated in currency units. It represents the amount of principal or face value of the security involved in the transaction.
Quick Search
Quick Search is a feature that allows users to swiftly find specific information within a database or system by entering keywords or criteria. It helps users locate relevant data efficiently without having to navigate through multiple pages or menus.
Quoted Price
Quoted Price refers to the price at which a security or financial instrument is currently being offered for sale or purchase in the market. This price is typically displayed on trading platforms or exchanges and represents the most recent available price for the security.
Rate Schedule
Document detailing the interest rates associated with various financial products or services offered by a bank or financial institution. It typically includes information about savings account rates, loan rates, mortgage rates, and other interest-bearing accounts or transactions.
Rating Effective Date
The date on which a credit rating assigned by a credit rating agency becomes effective. This date marks the point from which the rating agency’s assessment of the creditworthiness of a particular issuer or financial instrument is considered valid and applicable.
recent trades
Recent trades refer to the most recent transactions involving a particular security. These trades provide information about the price, volume, and timing of transactions, which can be useful for investors to gauge market activity and sentiment.
redeem
“Redeem” typically means to fulfill or carry out an obligation, such as repaying a debt or fulfilling a promise. In the context of investments, it often refers to the act of returning an investment to the investor, either upon maturity or as requested by the investor.
redemption
“Redemption” refers to the process of repaying or buying back a security or investment instrument. This can occur for various reasons, such as when a bond reaches its maturity date and the issuer returns the principal amount to the bondholder, or when an investor decides to sell their shares of a mutual fund back to the fund company.
redemption price
“Redemption price” is the amount paid by the issuer to redeem or repurchase a security. For bonds, it typically includes the principal amount plus any accrued interest up to the redemption date. In the case of mutual funds, it represents the value at which investors can sell their shares back to the fund.
Reinvestment Risk
“Reinvestment risk” refers to the possibility that an investor may not be able to reinvest cash flows from an investment, such as interest or principal payments, at the same rate of return as the original investment. This risk arises when interest rates decline, leading to lower yields on reinvested funds. It can impact the total return of an investment, particularly for fixed-income securities like bonds.
reopening treasury issues
Reopening treasury issues refers to the process where the U.S. Department of the Treasury offers additional amounts of a previously issued Treasury security with the same maturity date and interest rate.
Repo
A repo, short for repurchase agreement, is a financial transaction where one party sells securities to another party with an agreement to repurchase them at a later date, usually at a slightly higher price. It’s a form of short-term borrowing often used in financial markets by banks and other institutions.
reset frequency
Reset frequency refers to how often the interest rate on a variable-rate financial instrument, such as a loan or bond, is adjusted. It determines how frequently the interest rate is reset based on changes in a specified benchmark rate, such as LIBOR or the prime rate.
Retail Notes
Retail notes are debt securities typically offered directly to individual investors by governments, municipalities, or corporations. They are often issued in smaller denominations and may be accessible to retail investors through brokerage firms or directly from issuers.
Revenue Bond
A revenue bond is a type of municipal bond issued to finance specific revenue-generating projects, such as toll roads or utilities.
Risk-Free Rate
The risk-free rate refers to the theoretical rate of return on an investment that carries no risk of financial loss. It’s often used as a benchmark in financial modeling and is typically based on the yield of a government bond, such as a U.S. Treasury bond, considered to have virtually no risk of default.
S&P Minimum Rating Field
The S&P Minimum Rating Field refers to the minimum credit rating assigned by Standard & Poor’s (S&P) to a particular financial instrument, such as a bond or other fixed-income security. This rating indicates the creditworthiness of the issuer and helps investors assess the level of risk associated with investing in that security.
S&P Ratings
S&P Ratings refer to credit ratings assigned by Standard & Poor’s (S&P), one of the major credit rating agencies. These ratings assess the creditworthiness of entities such as corporations, governments, and financial instruments like bonds. S&P ratings typically range from AAA (highest credit quality) to D (default).
School Bond Loan Program
The School Bond Loan Program is a financing initiative designed to assist school districts in funding capital projects such as building new schools, renovating existing facilities, or purchasing equipment. It provides low-interest loans to school districts, often backed by the state government, to help them meet their infrastructure needs while minimizing borrowing costs.
Search by CUSIP
Searching by CUSIP (Committee on Uniform Security Identification Procedures) allows investors to quickly locate specific securities by their unique identifier. This identification system helps streamline the process of finding detailed information about bonds, stocks, and other financial instruments.
Search by Price
Searching by price enables investors to filter and identify securities within a specific price range, facilitating the discovery of investment opportunities that match their budget or trading preferences.
Search by Product
Searching by product allows investors to filter and identify securities based on specific product types or categories, helping them find investment opportunities that align with their investment objectives and strategies.
Secondary Issue
A secondary issue involves the sale of additional shares by existing shareholders after the initial public offering (IPO).
secondary market
The secondary market is where investors buy and sell securities from other investors, rather than from the issuing company. It provides liquidity to investors by allowing them to sell their investments before maturity.
sector
A sector refers to a segment of the economy that includes businesses that provide similar goods or services. Examples of sectors include technology, healthcare, finance, and energy.
Secured Overnight Financing Rate (SOFR)
SOFR, or Secured Overnight Financing Rate, is a benchmark interest rate that reflects the cost of borrowing cash overnight collateralized by U.S. Treasury securities.
Security Description
Security description refers to a concise summary or label used to identify a specific financial instrument, such as a bond, stock, or derivative.
Security Number
A security number is a unique identifier assigned to a specific financial instrument, such as a stock, bond, or option, for trading and tracking purposes.
SEDOL
SEDOL stands for Stock Exchange Daily Official List. It is a unique seven-character alphanumeric code assigned to securities listed on the London Stock Exchange and other exchanges in the United Kingdom and Ireland. SEDOL codes are used for trading, settlement, and identification purposes.
Seniority
Seniority refers to the priority ranking of debt in the event of a company’s bankruptcy or liquidation. Debt with higher seniority has a greater claim on the company’s assets and is typically repaid before debt with lower seniority.
Settlement Date
The settlement date is when a financial transaction is completed, typically a few days after the trade date.
Settlement Month
The settlement month refers to the month in which a financial transaction is completed and settled.
share amount
Share amount refers to the number of shares of a particular security that are being bought or sold in a transaction.
sink defeased
“Sinking fund defeasance” refers to the process of setting aside funds in a sinking fund to retire debt, thereby effectively removing the liability from the balance sheet. This is often done by purchasing high-quality securities such as government bonds and placing them in an irrevocable trust, with the proceeds used to pay off the debt when it matures.
Sinking Fund
A sinking fund is a method used by companies or governments to set aside money regularly to repay debt obligations. This fund is typically used to retire or redeem bonds or other debt instruments before their maturity date. By regularly contributing to the sinking fund, the issuer can reduce the outstanding debt over time and decrease interest expenses.
sinking fund price
The sinking fund price refers to the price at which a bond or other debt instrument is redeemed or repurchased through the sinking fund. This price is usually specified in the terms of the bond indenture or offering documents and may be at par value or at a premium or discount to par, depending on the terms of the bond and prevailing market conditions.
sinking fund protection
Sinking fund protection refers to a provision in a bond indenture that protects bondholders by requiring the issuer to set aside funds regularly to retire a portion of the outstanding debt before maturity. This provision helps reduce the risk of default by ensuring that the issuer has sufficient funds to repay the bondholders when the bonds mature.
Sinking Fund Schedule
A sinking fund schedule outlines the timing and amounts of payments that the issuer of a bond must make into a sinking fund to retire a portion of the bond’s principal before maturity. This schedule typically specifies the dates on which payments are due, as well as the amounts required. The sinking fund schedule helps ensure that the issuer systematically sets aside funds to meet its obligation to repay bondholders and reduces the risk associated with default.
Sinking Fund Type
Sinking fund type refers to how a sinking fund operates, either as mandatory, where the issuer is required to retire a portion of the bond’s principal at set intervals, or optional, where the issuer has discretion over when to retire principal.
Skip day settlement
Skip-day settlement refers to a securities transaction settlement process where the delivery of securities and the payment for them occur on the next business day after the trade date. This practice allows buyers and sellers an additional day to settle their transactions.
Sorting Order
Sorting order refers to the arrangement in which items are organized or presented based on certain criteria. It determines the sequence or hierarchy of the items displayed, such as alphabetical order, numerical order, ascending or descending order, or based on other specified attributes.
sovereign debt
Sovereign debt is money borrowed by a national government, usually through issuing bonds, to fund its operations or investments.
Sovereign Risk
Sovereign risk refers to the possibility that a government may default on its debt obligations or be unable to meet its financial commitments.
special mandatory redemption
Special mandatory redemption refers to a clause in a bond agreement that requires the issuer to redeem the bond before its maturity date under certain specified conditions, such as a regulatory event or a significant change in the issuer’s financial condition.
special optional redemption
Provision allowing a bond issuer to redeem the bond before maturity under specific conditions outlined in the bond agreement.
Special Redemption
Special redemption refers to the early repayment of a bond or security by the issuer, typically under specific circumstances outlined in the bond agreement. This can include events such as a merger, acquisition, or regulatory requirement, allowing the issuer to retire the bond before its maturity date.
Spread
Spread refers to the difference between two prices or yields. In the context of bonds, it often refers to the difference in yield between a bond and a benchmark, such as a Treasury security of similar maturity. A wider spread typically indicates higher perceived risk associated with the bond, while a narrower spread suggests lower risk.
spread to treasury
Spread to Treasury refers to the difference in yield between a specific bond and a U.S. Treasury security of similar maturity. It is used to measure the credit risk premium investors demand for holding a bond issued by a corporation, municipality, or other entity compared to the risk-free rate offered by Treasuries. A higher spread indicates a higher perceived risk associated with the bond, while a lower spread suggests lower risk.
Standard & Poor’s (S&P) Corporation
Standard & Poor’s (S&P) Corporation is a prominent financial services company known for providing credit ratings, market intelligence, and other financial analysis tools to investors, businesses, and governments worldwide. S&P is well-known for its credit ratings, which assess the creditworthiness of entities issuing debt securities.
standard market session
The standard market session refers to the typical trading hours during which financial markets are open for trading.
State
In finance, “state” can refer to various aspects depending on the context. It might relate to the location or jurisdiction where a security is issued or traded, or it could indicate the condition or status of an investment or financial instrument.
Stated Maturity
Stated maturity refers to the date on which the principal amount of a debt instrument, such as a bond or a note, is scheduled to be repaid to the investor. It is the date specified in the terms of the security at the time of issuance.
Stepped-Rate Coupon
A stepped-rate coupon is a feature of a bond or other fixed-income security where the interest rate changes over time according to predetermined steps or intervals. These changes are typically based on specific dates or events outlined in the security’s terms. The stepped-rate coupon structure allows issuers to adjust the interest rate to reflect changes in market conditions or other factors, providing investors with potentially higher yields compared to traditional fixed-rate securities.
Sub Product Type
“Sub Product Type” typically refers to a more specific classification or category within a broader product type or category. For example, within the category of bonds, sub product types could include corporate bonds, municipal bonds, treasury bonds, etc.
Sub-Investment-Grade/High-Yield Corporates
“Sub-Investment-Grade” or “High-Yield Corporates” refer to corporate bonds that are rated below investment-grade (often rated below BBB- by rating agencies like S&P, Moody’s, or Fitch) and are considered higher risk compared to investment-grade bonds. These bonds typically offer higher yields to compensate investors for the increased risk of default associated with the issuing company.
Subject to AMT
“Subject to AMT” refers to investments or income that may be subject to the Alternative Minimum Tax (AMT). The Alternative Minimum Tax is a separate tax system designed to ensure that taxpayers who take advantage of certain tax benefits pay at least a minimum amount of tax. Some investments, such as certain types of municipal bonds and other tax-preferred securities, may be subject to AMT under certain circumstances.
Subject to Phantom Interest
“Subject to Phantom Interest” refers to an investment where interest accrues but is not paid out in cash to the investor. Instead, it is added to the principal amount of the investment, increasing future interest payments.
Surety Bond
A surety bond is a type of contract between three parties: the principal (the party who needs the bond), the obligee (the party requiring the bond), and the surety (the party providing the bond). It guarantees that the principal will fulfill their obligations to the obligee. If the principal fails to do so, the surety must compensate the obligee up to the bond’s limit.
Survivor’s Option
A survivor’s option is a feature often found in annuities or insurance policies that allows the beneficiary of the policyholder to continue receiving benefits after the death of the policyholder. This option typically ensures that the surviving spouse or other beneficiary will receive regular payments or other benefits for a specified period or for the rest of their life, depending on the terms of the policy.
Symbol
A symbol typically refers to a unique combination of letters or characters used to represent a particular security, such as a stock, bond, or mutual fund, on a stock exchange or trading platform. These symbols are used to identify and track the performance of specific securities in the financial markets. For example, the symbol “AAPL” represents Apple Inc. stock, while “GOOG” represents Alphabet Inc. (Google) stock.
Tax Provisions
Tax provisions are clauses or rules in financial agreements or legislation that outline tax implications for transactions, assets, or income. They cover tax rates, deductions, credits, exemptions, and reporting requirements.
Tax-Equivalent Yield (TEY)
Tax-Equivalent Yield (TEY) is a measure used to compare the yield of a tax-exempt investment, such as municipal bonds, with a taxable investment, typically corporate bonds or Treasury securities. It represents the yield a taxable bond would need to offer to match the after-tax yield of a tax-exempt bond, taking into account the investor’s tax bracket. This allows investors to evaluate the relative attractiveness of tax-exempt and taxable investments.
tax-exempt income
Tax-exempt income refers to income that is not subject to taxation by the government. This typically includes income from certain types of investments, such as municipal bonds, which are issued by state and local governments and are exempt from federal income tax.
Taxable Income (Federal)
Taxable income refers to the portion of an individual’s or entity’s income that is subject to federal income tax after accounting for deductions, exemptions, and credits. It is the income on which tax is calculated and paid to the government.
TBA Mortgage-Backed Security
A TBA (To-Be-Announced) Mortgage-Backed Security is a forward contract for buying or selling mortgage-backed securities where the specific securities to be traded are not designated at the time of the agreement.
term
“Term” typically refers to the length of time until a financial instrument matures or until a contractual obligation expires. It can also denote a specific period within a larger timeframe.
Territory
“Territory” refers to a defined geographical area that is governed or administered by a particular entity, such as a country, state, or region. It can also refer to a specific jurisdiction or domain under the control of a government or organization.
third-party price
“Third-party price” refers to the price of a security provided by a source other than the buyer or seller involved in a transaction. It typically comes from an independent pricing service, such as a financial data provider or market information platform. Third-party prices are often used as reference points or benchmarks to ensure fairness and transparency in financial transactions.
third-party providers
Third-party providers offer financial data, analysis, and tools to support investment and trading activities.
TIGRs
TIGRs, or Treasury Investment Growth Receipts, were fixed-income securities issued by brokerage firms in the 1980s. They represented the interest and principal payments of Treasury securities and were separated into zero-coupon bonds.
Total Issues Traded
Total issues traded represents the overall number of different securities that were bought and sold within a specific period or market session.
Total Number of Securities
The total number of securities refers to the aggregate count of financial instruments available within a specific market or investment category.
Total Number of Transactions
Total number of transactions refers to the sum of all individual trades executed within a given period or market session.
Total Value (Par $)
Total value (par $) refers to the combined face value of all securities traded within a given period or market session. It represents the total nominal value of bonds, stocks, or other financial instruments involved in transactions during that time frame.
TRACE eligibility
Total value (par $) refers to the combined face value of all securities traded within a given period or market session. It represents the total nominal value of bonds, stocks, or other financial instruments involved in transactions during that time frame.
TRACE Grade
TRACE grade refers to the classification of a bond’s trading activity as reported through the Trade Reporting and Compliance Engine (TRACE). It is based on various factors including the price, yield, and volume of transactions. The TRACE grade helps investors gauge the liquidity and quality of trading in a particular bond, with higher grades typically indicating more active and liquid trading.
Trading Flat
Trading flat refers to a security being traded without accrued interest. When a bond is trading flat, the buyer does not pay the seller any additional amount for the accrued interest that has accumulated since the last coupon payment date. This is common in the bond market, where prices are typically quoted on a clean basis, meaning they exclude accrued interest.
Trading Hours
Trading hours refer to the specific times during which financial markets are open for trading. These hours can vary depending on the market and the financial instrument being traded. For example, stock markets typically have regular trading hours that span from the morning to the afternoon on weekdays, while some markets, like foreign exchange (forex) and cryptocurrency markets, operate 24 hours a day, five days a week. Trading hours may also be affected by holidays and other special circumstances.
Traditional CD
A traditional CD is a fixed-term savings account where you deposit a set amount of money for a specified period, typically earning higher interest rates than regular savings accounts. You can’t access your funds without penalty until the CD matures, at which point you can withdraw your initial deposit plus interest. These CDs are low-risk, insured by the FDIC or NCUA, but offer lower returns compared to more volatile investments.
Tranche ID
A tranche ID refers to a unique identifier assigned to a specific tranche, which is a portion of a larger financial instrument, such as a bond or mortgage-backed security, that has been split into smaller pieces with varying characteristics. Tranche IDs are used to distinguish one tranche from another within the same security, allowing investors and issuers to track and manage them separately. These IDs are essential for organizing and trading tranches in the financial markets.
Treasuries
Treasuries are U.S. government-issued debt securities, considered safe investments backed by the full faith and credit of the government. They come in various forms, including Treasury bills, notes, and bonds, with different maturities. Treasuries are widely traded and often used as benchmarks in financial markets.
treasury auctions
U.S. Treasury events selling government securities to finance operations and manage debt.
treasury benchmark
Treasury benchmarks are key U.S. Treasury securities used as reference points in financial markets to assess performance, determine borrowing costs, and gauge economic health. They include Treasury bills, notes, and bonds with various maturities.
Treasury bills
Short-term debt securities issued by the U.S. Treasury with maturities ranging from a few days to one year. They are sold at a discount to face value and do not pay interest like conventional bonds. Instead, investors earn returns by buying them at a discount and receiving the full face value at maturity.
Treasury bonds
Treasury bonds are long-term government debt securities issued by the U.S. Department of the Treasury. They typically have maturities of 10 years or more and pay interest every six months. These bonds are considered low-risk investments because they are backed by the full faith and credit of the U.S. government.
Treasury inflation protected securities (TIPS)
Treasury Inflation-Protected Securities (TIPS) are U.S. government bonds designed to protect investors against inflation. They offer a fixed interest rate that is adjusted for inflation based on changes in the Consumer Price Index (CPI). This means that the principal value of TIPS increases with inflation, providing investors with a hedge against rising prices. TIPS pay interest every six months and are issued with maturities ranging from 5 to 30 years.
treasury security
A Treasury security is a government debt instrument issued by the United States Department of the Treasury to finance government spending. These securities are considered low-risk investments because they are backed by the full faith and credit of the U.S. government. Treasury securities include Treasury bills (T-bills), Treasury notes (T-notes), Treasury bonds (T-bonds), and Treasury Inflation-Protected Securities (TIPS). They are commonly used by investors seeking safety and stability in their investment portfolios.
Unchanged
“Unchanged” typically refers to the status of a security’s price or value, indicating that it has remained the same without any increase or decrease during a specific period, such as a trading session or a day. This term is often used in financial markets to describe the stability of an asset’s price when it neither rises nor falls.
Underwriter
An underwriter guarantees the sale of newly issued securities, assessing risk and setting the offering price before selling them to investors.
Unit Investment Trust (UIT)
A Unit Investment Trust (UIT) is a type of investment fund that offers a fixed portfolio of stocks, bonds, or other securities. It issues units representing an undivided interest in the underlying securities and operates for a fixed period, typically without active management.
Unsecured Bond
An unsecured bond, also known as a debenture, is a type of bond that is not backed by any collateral. Instead, it relies on the creditworthiness and reputation of the issuer for repayment. In the event of default, holders of unsecured bonds have a lower priority claim on the issuer’s assets compared to secured bondholders.
Unsecured Debt
Unsecured debt refers to borrowing that is not backed by collateral, such as assets or property.
use of proceeds – fixed income
“Use of proceeds” in the context of fixed income typically refers to how the funds raised from issuing bonds or other debt securities will be utilized by the issuer.
Value Date
Value date, also known as the settlement date, is the date on which a financial transaction is considered complete and final. It is the date when the buyer pays for securities purchased or the seller receives payment for securities sold.
Variable Rate
Interest rate that changes based on market conditions or other specified factors, offering potential for higher returns in rising rate environments and lower returns in falling rate environments.
Variable-Rate Bond
A bond whose interest rate fluctuates over time based on changes in a specified benchmark interest rate, such as the LIBOR or the Treasury bill rate. This variability in interest rates can lead to changes in the bond’s coupon payments, providing investors with exposure to interest rate movements.
Volatility
Volatility refers to the degree of variation in the price or value of a financial instrument over time. It is often used as a measure of risk, with higher volatility indicating greater uncertainty or variability in the returns of an investment.
Yield
Yield refers to the income return on an investment, typically expressed as a percentage of the investment’s cost, market value, or face value. It represents the earnings generated by an investment over a specific period of time, usually on an annual basis.
Yield Curve
A yield curve is a graphical representation of the relationship between the yield (interest rate) and the maturity (time until repayment) of bonds with similar credit quality but different maturity dates. Typically, the yield curve plots yields on the vertical axis and time to maturity on the horizontal axis.
Yield to Call (YTC)
Yield to Call (YTC) is the yield an investor would receive if they held a callable bond until the call date and the issuer redeemed the bond at that point. It’s a measure of the return on investment based on the assumption that the bond will be called before its maturity date.
Yield to maturity
Yield to maturity (YTM) is the total return anticipated on a bond if it is held until it matures. It is the annualized rate of return earned on a bond purchased at its current market price and held until its maturity date, taking into account the bond’s coupon payments, its current price, and the time remaining until maturity.
Yield to sink
Yield to sink is a measure used to calculate the yield of a bond that includes the effect of a sinking fund provision. A sinking fund provision allows the issuer of a bond to repurchase a portion of the outstanding bonds before their maturity date, typically at par value or at a premium, using a predetermined schedule.
Yield to Worst (YTW)
Yield to Worst (YTW) is the lowest potential yield that an investor can receive from a bond or other fixed-income security, considering the worst-case scenarios such as call provisions, prepayment options, and credit quality changes.
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