Category: A – Definitions

 in stock options trading the number of shares in a put or call contract normally 100 * the exercise price the price of the option call the premium is a separate figure not included in the aggregate exercise price a July call option on 100 XYZ at 70 wood for example have an exercise price of 100 number Sears time 70 price per share of 7000 if exercised on or before the July expiration date in options traded on debt instruments which include government National Mortgage Association pass-throughs treasury bills Tino’s treasury bonds and certain municipal bonds the aggregate exercise price is determined by multiplying the face value of the underlying security by the exercise Plies price for example the aggregate exercise price of Apple option treasury bond December 90 would be 90000 if exercise on or before its December expiration date the calculation being 90% * that hundred thousand face value of the underline Bond

1.  individual authorized by another person called the principal to act in the ladders behalf in transactions involving a third-party banks are frequently appointed by individuals B2B their agents and so authorized their employees to act on behalf of principles agents have three basic characteristics
   1.  they act on behalf of and are subject to control of the principal
   2.  they do not have title to the principal’s property
   3.  they owe the duty of obedient to the principals orders

securities issued by US Government sponsored entities( gse’s) end federally related institutions GS he’s currently issuing Securities comprise 8 publicly chartered entities created to reduce borrowing costs for certain sectors of the economy such as Farms Farmers homeowners and students they include a federal Farm Credit bank system the Farm Credit Financial Assistance Corporation Federal Home Loan Bank Federal Home Loan mortgage Corporation Federal National Mortgage Association( Fannie Mae) and Incorporation( FICO) gse’s issue discount notes with maturities ranging from overnight to 360 days and bonds with the exemption of the Farm Credit Financial Assistance Corporation GSE Securities are not backed by the full faith and credit of the United States government other gse’s that formally issued directly now borrow from the Federal Financing Bank

 Agency Securities part 2

 federally related institutions are arms of the United States government and have not issued Securities directly into the marketplace since the Federal Financing Bank was established to meet their Consolidated bar in needs in 1973 include the export-import bank( exit Bank) of United States the commodity Credit Corporation the farmers housing Administration the general Services administration of the government National Mortgage Association the maritime Administration the private export funding Corporation the rural electrification Administration the Rural Telephone Bank the small business administration the Tennessee Valley Authority and the Washington metropolitan area transit authority except for the private export funding Corporation and the TV a Tennessee Valley Authority federally related institutions obligations are backed by the full faith and credit of the US government agency Securities are exempt from SEC registration and from the state and local income taxes see also Federal Farm Credit system Federal home loan bank system

1.  in general:  relationship between two parties one a principal and the other an agent who represents the principal in transactions with a third party
2.  Finance: certain types of accounts entrust institutions were individuals usually trust officers act on behalf of customers agency servants that services to corporations are related to the stock purchases and sales thanks also act as agents for individuals
3.  government: securities issued by government-sponsored entities and federal federally related institutions agency Securities are exempt from Securities and Exchange Commission( sec) registration requirements see also agency securities
4.  Investment:  Act of buying or selling for the account and risk of a client generally an agent or broker acts as intermediary between buyer and seller taking no Financial Risk personally or as a firm and charging a commission for the service

 contract between two broker-dealers that is still not settled 30 days after the settlement date at that point the open balance no longer counts as an asset in the receiving firm must adjust its capital accordingly

short sale by the holder of a long position in the same stock box refers to the physical location of Securities held in safekeeping when a stock is sold against the box it is so short but only in effect a short sale is usually defined as one where the seller does not own the shares here the seller does own the shares holds a prolonged position but does not wish to disclose ownership or perhaps a long Shares are too inaccessible to deliver in the time required or prior to the taxpayer Relief act of 1997 he may have been holding his existing position to get the benefit of long-term capital gains tax treatment in any event when the sale is made against the Box the shares needed to cover our borrowed probably from a broker this technique was eliminated as a way to reduce tax liabilities in the taxpayer Relief act of 1997 also see selling short against the Box

 amount of money adjusted for inflation that an investor can keep how do the income and capital gains earned from Investments everydollar loses value to inflation Sew and Vac keep an eye on the after-tax real rate of return whenever they commit their Capital by and large investors seek a rate of return that will Mass if not exceed the rate of inflation

basis for comparing the Returns on a corporate taxable Bond and a municipal tax free bond for example a corporate bond paying 10% would have an after tax return of 6.5% for someone in the 35% tax bracket so any Municipal Bond paying higher than 6.5% would yield a higher after tax return

trading activity immediately following an initial public offering( ipo)

 trading of stocks and bonds after regular trading hours on organized exchanges this may occur when there is a major announcement about positive or negative earnings or a takeover at a particular company the stock price May therefore soror plummet from the level at which it closed during regular trading hours some brokerage firm specialize in making over-the-counter markets around the clock to accommodate after hours dealing