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W

Warrant An option that a corporation issues, with its own shares as the underlying asset. The crucial implication is that exercise of the option changes the number of claims against the corporation’s assets. Thus, the pricing equations for Call (Put) Warrants and ordinary Call (Put) Options differ by the dilution ...

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V

Value date 1. In the Eurodeposit and FX markets, the delivery date for funds traded. For the spot market it would be the spot date, ordinarily two business days after the transaction. For the forward market it would be a future delivery date. In the bond market (usually), the date ...

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U

U.K. Mips Goldman, Sachs’s variation on its Mips structure, tailored to maximize its advantages for the UK market in ways that the U.S. government wouldn’t allow. Grand Metropolitan Delaware (limited partnership) issued 20 million “preferred securities” paying quarterly dividends at $25, lending the proceeds to Grand Metropolitan plc via a ...

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T

Tailed calendar spread A calendar spread trade involving one long position and one short position of different sizes (in contracts). Tandem spread A spread consisting of calendar spreads in two commodities. Tanker Freight Swap A Swap with payoffs that depend on an average of tanker shipping rates. TED Spread Definition: ...

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S

Samurai market Japan’s foreign market. The market in Japan for securities that non Japanese companies and governments issue. Example: Some shares of General Motors trade in the Samurai market. Scalper, Scalp-beggar A exchange floor trader who is a market maker. Scalping Disseminating (e.g., via a newsletter, press release, web page, ...

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R

Random variable A function that assigns a real number to each and every possible outcome of a random experiment. Random walk Theory that stock price changes from day to day are at random; the changes are independent of each other and have the same probability distribution. Many believers of the ...

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Q

Quality option Also called the swap option, the seller’s choice of deliverables in Treasury Bond and Treasury note futures contract. Quanto A currency-protected derivative product that is, one denominated in a currency other than that of the underlying to which exposure is sought. The name refers to the variable notional ...

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P

Pack A Forward Strip, each corresponding to a particular year, of four consecutive, quarterly Eurodollar or Euroyen futures contracts. Markets, such as Simex offer a Pack as a convenient package of futures contracts, without the execution risk inherent in building up the Strip, contract by contract. A trader can use ...

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Put – Call Ratio

The Put-Call Ratio is the number of put options traded divided by the number of call options traded in a given period. While typically the trading volume is used to compute the Put-Call Ratio, it is sometimes calculated using open interest volume or total dollar value instead. Weekly or monthly ...

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O

Objective (mutual funds) The fund’s investment strategy category as stated in the prospectus. There are more than 20 standardized categories. Odd lot A trading order for less than 100 shares of stock. Odd lot dealer A broker who combines odd lots of securities from multiple buy or sell orders into ...

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