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Glossary of Financial Terms — N, O 

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Terms — N
Terms — O


National Association of Securities Dealers

Formed in 1939 under the auspices of the Maloney Act, it is a self-regulating body of the securities industry designated to establish rules of fair practice for the protection of the investing public.

 

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Negotiated Offering

A method of syndication by which the terms of an offering are determined by negotiation between the issuer and the underwriters’ manager.

 

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Net Asset Value

The ‘true’ value of a fund’s investments based on the quoted prices of its components.

 

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Net Asset Value Percentage

Refers to percent of Total Company (net asset) Market Amount.

 

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Net Unsettled Trades

This is the sum of any Due-To-Broker and Due-From-Broker amounts. The actual item purchased shows in the inventory listings as of the Trade Date. The payable is automatically posted against cash on Settlement Date.

 

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Network Level 1

A network service consisting of real-time bid/ask quotes for securities trading on the Nasdaq stock market.

 

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Network Level 3

A trading service consisting of everything in Level 2 plus the ability to enter quotes, execute orders, and send information. This service is restricted to FINRA member firms that function as registered market makers.

 

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New Issue

A stock or bond sold by a corporation for the first time. Proceeds may be said to retire outstanding debt, for new plants or equipment, or for additional working capital.

 

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New Money

In a refunding, the amount by which the principal amount of securities offered exceeds the principal amount maturing.

 

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New Money Preferred

A preferred stock of a public utility that was issued on or after October 1, 1942 and did not refund or replace any bond, debenture or other preferred stock issued prior to October 1, 1942. In accordance with the laws regarding investment by one corporation in the stock of another corporation, corporations are entitled to an 85 % tax deduction on the dividends from new money preferred stocks.

 

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Nine Bond Rule

The rule of the New York Stock Exchange that all orders for the nine bonds (USD 9000 par amount) or less in listed issues must be sent to the floor for execution unless the customer directs the broker to go the OTC market.

 

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Nominal Bond

A bond whose value does not adjust to compensate for the impact of inflation.

 

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Nominal Rate

The growth rate of your money.

 

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Nominal Return

Describes any change in value, including the artificial rise in prices that comes with inflation.

 

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Nominal Value

The stated value of an issued security that remains fixed, as opposed to its market value, which fluctuates.

 

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Nominal Yield

The rate listed on the face of a bond; the coupon rate.

 

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Nominee Name

The registered name issued by the Comptroller of the Currency into which a bank or a trust company registers the securities it holds as an investment agent for its trust department portfolios, thereby facilitating a good delivery to brokers at time of sale or exchange.

 

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Non-Callable Treasuries

A treasury which cannot be redeemed at the option of the issuer.

 

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Non-Qualified

Non-Qualified Plan: Any type of tax-deferred, employer-sponsored retirement plan that falls outside of ERISA guidelines. Non-qualified plans are designed to meet specialized retirement needs for key executives and other select employees. These plans also are exempt from the discriminatory and top-heavy testing that qualified plans are subject to.

Non-Qualified Stock Option: A type of employee stock option where you pay ordinary income tax on the difference between the grant price and the price at which you exercise the option.

Non Qualified Distribution:
1. A distribution from a Roth IRA that occurs before the Roth IRA owner meets certain requirements (see definition for qualified distributions).
2. A distribution from an education savings account that exceeds the amount used for qualified education expenses.

 

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Non-Refundable

Ineligible for a stated period of time, for redemption with funds raised through the sale of an issue having an interest cost lower than that on the outstanding bonds. Bonds with refunding protection are still subject to regular redemption and call for sinking funds.

 

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Note

A promise to pay as distinguished from an order to pay. A written promise of the maker to pay a certain sum of money to the person named as payee, on demand or at a fixed or determinable future date. In the government securities market, a note is a coupon issue with a maturity of one to ten years. In contrast to Treasury bonds, coupon rates on Treasury notes are not restricted by law.

 

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Object

An input/output defined in the activity screen within Process Charter. Objects that are affected by work that is being performed. This is in contrast to a resource.

 

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Odd Coupons

Sometimes, the first or last coupon period is either linger or shorter than a normal coupon period and therefore the coupon payment is more or less than a normal coupon payment. Calculating the odd coupon payment is roughly the same as calculating accrued interest for the number of days in the odd coupon period.

 

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Odd-Lot

Refers to a trading unit of a bond that is some fraction of a round-lot. A premium is usually charged for odd-lot transactions.

 

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Off to Off

Refers to a trade made from one retail account to another (off-the-street to off-the-street).

 

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Offer

The price at which someone will sell a security.

 

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Offer Wanted

The security referred to is desired by a buyer and prospective sellers are requested to submit offers for it. The inference is that the security will be bought from the lowest offerer.

 

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Old Money Preferred

A preferred stock of a public utility that was issued prior to October 1, 1942, or that refunded or replaced a bond, debenture or other preferred stock issued prior to October 1, 1942. The tax deduction for corporations investing in stock of another corporation is 60.2 % for income from old money preferreds.

 

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Omnibus Account

An omnibus account combines the transactions of individual accounts into one master account, usually facilitated by a larger brokerage firm such as Charles Schwab or Edward Jones. This provides small investors access to mutual funds that require large minimum investments at lower fees. The omnibus structure also creates anonymity and protects the identity of individual account holders.

 

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One-sided Market

A market consisting of only a firm bid or a firm offering.

 

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Open Currency Position

A holding of a non-domestic asset with the associated currency risk.

 

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Open-end

To liquidate all or part of a portfolio and to hold cash or cash equivalents.

 

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Open-end Fund

A mutual fund that has no fixed number of shares outstanding. The share represent an interest in the fund’s portfolio. New shares are offered to the public and any investor can sell shares back to the fund at market value. Price is determined by the per share net asset value of the portfolio on a daily basis.

 

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Open Order

An order to buy or sell entered at a certain price and designated good until canceled.

 

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Option

1. An agreement, or privilege, which conveys the right to buy or sell a specific security at a stipulated price and within a stated period of time. If not exercised during that time, the money paid for the option is forfeited.
2. Right to buy or sell property that is granted in exchange for an agreed-upon sum.

 

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Option to Double

A feature of an indenture that allows a sinking fund to purchase twice the normal principal amount of bonds for the sinking fund, at the sinking fund call price. Such additional purchases are not considered buying ahead.

 

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Original Face

Value of asset pool at time of origination.

 

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Original Issue Discount

The discount from par at which a new issue comes to the market. The IRS treats the accretion of this discount over the life of the security as being current income to the holder.

 

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Original Principal

The principal amount of a pass-through pool originally issued (also called original face).

 

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Originator

A person who solicits builders, brokers, and others to obtain applications for mortgage loans. Origination is the process by which the mortgage banker brings into being a mortgage secured by real property.

 

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Out Firm

Advises that a trader has already given someone else an option to buy or sell the security at a given price, for a specified period of time.

 

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Out Trade

A futures trade by a floor trader which the clearing house cannot march with the other party to the trade, as recorded at the time of the trade.

 

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Overbought

A market that is susceptible to a downward correction in price levels. Implies that prices have risen more than fundamentals would dictate.

 

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Oversold

A market that is susceptible to an upward correction in price levels. Implies that prices have fallen more than fundamentals would dictate.

 

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Over the Counter Deliveries

Securities that are delivered by messenger to members and agents against payment. Delivery hours are between 9:00 and 11:30 a.m.

 

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Overtrading

The practice of allowing illegal concessions by paying substantially more than the market value for one security in order to affect the sale of another.

 

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Information contained herein is believed to be reliable, but the accuracy and completeness of this material cannot be guaranteed.
Information contained herein is believed to be reliable, but the accuracy and completeness of this material cannot be guaranteed.

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