Investments & Financial Planning

A Stop Order is an order to buy or sell a security as soon as the security's price hits a specific price level. Buy stop orders are placed above the market and sell stop orders are placed below it. The order becomes a market order if and when a transaction takes place at or through the stated stop price. A Buy Stop Order is an order that becomes a market order to buy if and when someone trades a round lot at or above the stop price. A Sell Stop Order is an order that becomes a market order to sell if and when someone trades a round lot at or below the stop price.

A Tender Offer is a formal proposition to stockholders to sell their shares in response to a large purchase bid. The buyer customarily agrees to assume all costs and reserves the right to accept all, or a specific number or none of the shares presented for acceptance.

Treasury Bonds are federal registered or bearer obligation issued in denominations of $500 to $1 million with maturities ranging from 5 to 35 years, carrying a fixed interest rate and issued, quoted and traded as a percentage of its face value.

A Underwriter is also known as an investment banker or distributor. He or she is a Middleman between an issuing corporation and the public. The underwriter usually forms an underwriting group, called a syndicate, to limit risk and commitment of capital. He or she may also contract with selling groups to help distribute the issue for a percentage. In the distribution of mutual funds, the underwriter is known as a sponsor or distributor, or even wholesaler. Investment bankers also offer other services, such as counsel and advice on the raising and investment of capital.

A Unit Investment Trust is a closed end investment company, which consists of a professionally selected basket of securities. It is either stocks or bonds. These securities are packaged into a single investment portfolio that usually remains fixed over the life of the trust. The total ownership of the portfolio is divided into a fixed number of units. Each unit represents a partial ownership of the underlying portfolio.

A Call option is an option to purchase a specified number of shares (usually 100) on or before some future date at a stated price.
Call options usually have initial lives of one to nine months.
Options are created and sold in certain option markets and can be purchased by investors to obtain the right to buy or sell a specific number of shares of common stock on or before some future date at a stated price.

The striking price is the price at which the holder of a call option can buy or the holder of a put option can sell a specified amount of stock at any time before the option's expiration date.
It is also known as the exercise price.

Treasury Bills are direct obligations of the U.S. Treasury to finance budgetary needs. Treasury bills are offered in 3 month, 6 month and 12 month maturities. Treasury bills are considered short term IOU's issued by the U.S. Treasury and are commonly considered as the risk free investment asset.
Your return on a Treasury bill is the difference between the discount price you pay for the bill and its face value, if you hold it to maturity or the amount you receive for it on a sale before its maturity.
You may buy Treasury bills directly from the Federal reserve bank without a fee or from a bank or stockbroker who will charge you a handling fee.

CD's are Certificate of Deposits which are a form of short term investments that offers a high degree of safety and negotiability. Negotiable Certificates of Deposits are negotiable instruments representing specific cash deposits in commercial banks having varying maturities and yields based on size maturity and prevailing money market conditions. Yields are generally above those on U.S. Treasury issues and comparable to those on commercial paper with similar maturities.