New securities and investments FBLA

W2

Your employer must send this to you by January 31st. It will show you the total amount of money you made during the year and the totL taxes withheld.

W4

An employees withholding certificate. This document is used by your employer to determine how much tax to withhold from your paycheck.

1099-INT

A certificate sent to you by the bank telling you how much interest you have earned.

Record date

the date determined by the Board of Directors upon which the investor must be the "holder of record" in order to receive the upcoming dividend. Settlement of a trade must occur by the record date for the buyer to receive the dividend

Ex-Date

two days before the Record Date of corporate stock. The date upon which the buyer is not entitled to the upcoming dividend. Note that for mutual funds, this date is established by the Board of Directors, usually the day after the Record Date

Pre-emptive right

the right of common stockholders to maintain their proportional ownership if the company offers more shares of stock

subscription right

the securities used in additional offerings of stock to purchase available shares, usually at a slight discount

warrant

long term equity securities giving the owner the right to purchase stock at a set price. OFten attached as a "sweetener" that makes the other security more attractive

straight preferred stock

a preferred stock whose missed dividends do not go into arrears, a.k.a. "non-cumulative preferred."

cumulative preferred stock

preferred stock where missed dividends go into arrears and must be paid before the issuer may pay dividends to other preferred stock and/or common stock

preliminary prospectus

a.k.., "red herring," a prospectus that lacks the "POP" and the effective date. Used to solicit indications of interest.

effective date

date established by SEC as to when the underwriters may sell new securities to investors, a.k.a. "release date."

public offering price

a.k.a., "POP,' the price an investor pays for a mutual fund or an initial public offering. For a mutual fund= NAV + the sales charge.

third market

exchange-listed stock traded OTC primarily by institutional investors

fourth market

Where big institutional investors (pension funds, insurance companies, mutual funds, etc.) trade directly through electronic communications networks (ECNs)

interest rate risk

the risk that interest rates will rise, pushing the market value of fixed-income security down. Long-term bonds are most susceptible

reinvestment risk

the risk that a fixed-income investor will not be able to reinvest interest payments or the par value at attractive interest rates. Happens when rates are falling

bond points

bonds are quoted in terms of either their price or their yield. If we're talking about a bond's price, we're talking about bond points. A bond point is worth $10, a bond selling for 98 bond points is worth $980

basis points

bonds are quoted in terms of either their price or their yield. If we're talking about a bond's price, we're talking about a bond's yield. If we're talking about a bond's yield, we're talking about basis points (yield to maturity to be exact)

book/journal entry

a security maintained as a computer record rather than a physical certificate. All U.S. Treasuries and many mutual funds are issued in this manner. Also known as "fully registered."

negotiable CDs

large-denominated certificates of deposit that may be traded (negotiable) on a secondary market

GMNA

a government agency (not a public company) that buys insured mortgages from lenders, selling pass-through certificates to investors. Monthly payments to investors pay interest and return principal only at maturity, while "pass-throughs" pass through principal monthly. Thus the clever name "pass-through"

FNMA

buys mortgages from lenders and sells mortgage-backed securities to investors. A quasi-agency, a public company listed for trading on the NYSE

FHLMC

a quasi-agency, public company that purchases mortgages from lenders and sells mortgage-backed securities to investors. Stock is listed on NYSE

REMIC

Real Estate Investment Conduit. A type of mortgage-backed security

FOMC

the Federal Reserve Board's Federal Open Market Committee. Sets short-term interest rates by setting discount rate, reserve requirement and buying/selling T-bills to/from primary dealers

fiscal policy

means by which a government adjusts its spending levels and tax rates to monitor and influence a nation's economy. It is the sister strategy to monetary policy through which a central bank influences a nation's money supply

monetary policy

what the FRB implements through the discount rate, reserve requirement, and FOMC open market operations. Monetary policy tightens or loosens credit in order to affect short-term interest rates and, therefore, the economy.

discount rate

interest rate charged by the 12 Federal Reserve Banks to member banks who borrow from the FRB

Street Name

leaving a security in the brokerage firm's name, rather than the investor's

Uptick Rule

The last change in a stock must be positive in order to do a short sale

SEP IRA

For self-employed individuals, tax deductible, higher maximum contribution

Split Coupon Bonds

Little or no interest is paid for the first part of the term, followed by a higher rate

Extendable Security

The maturity date may be postponed

Serial Bonds

A portion of the bonds mature each year

Arbitrage

Simultaneous buying and selling of a commodity in markets to make a profit

Assets under management

AUM

403b

similar to a 401k, but only employees of certain nonprofit organizations can participate

457b

Employee pre-tax dollars diverted into investment account for governmental employees

Collar

A rate the mortgage interest can't fall behind

Payment of Order Flow

-SEC requires orders to be touted to the best available price posted

-By allowing firms to pay for order flow, competition will increase which will greatly benefit customers to always receive the best available price

Form 8-K Current Report

due within 15 days of the major event date. Financial statements can be unaudited. Major events may include change in leadership or bankruptcy

Series EE bonds

An appreciation type of savings security sold at face value. Interest is issued to you electronically. Cannot buy more than $10,000

Assignment

When a buyer excerises their rights under an option contract, the seller recieves a notice that they must fufill their obligation to buy or sell.

Holder

The buyer of an option contract

Writter

The seller of an option contract

Dodd-Frank Act

a law enacted in the aftermath of the financial crisis of 2008-2009 that strengthened government oversight of financial markets and placed limitations on risky financial strategies such as heavy reliance on leverage

408(k) Plan

Qualified plans for small employers. A mix of an IRA and profit-sharing plan. More commonly referred to as a SEP.

conduit borrower

typically agree to repay the issuer, who pays the interest and principal on the bonds. In cases where the conduit borrower fails to make a payment, the issuer usually is not required to pay the bondholders.

Wash Sale

Selling a security at a loss for tax purposes and, within 30 days before or after, purchasing the same or a substantially identical security. The IRS disallows the claimed loss.

non-recourse revenue bonds

If the revenue stream dries up bond holders do not have a claim on the revenue source

Encumbrance

outstanding mortgages or other debt related to real estate and any unpaid accrued acquisition or construction costs.

Group Annuity

a contract providing income for a specified period of time, or duration of life for a person or persons established to benefit a group of employees.

Retention

a mechanism of internal fund allocation for loss exposure used in place of or as a supplement to risk transfer to an insurance company.

Provisions

contingencies outlined in an insurance policy.

Jumbo CD

is a CD for a large amount of money usually $100,000 or more