Financial Dictionary

The right to vote on matters that are put to a vote of security holders. For example the right to vote for directors.

This is the daily number of shares of a security that change hands between a buyer and a seller.

The risk in the value of options portfolios due to the unpredictable changes in the volatility of the underlying asset.

A measure of risk based on the standard deviation of the asset return. Also, volatility is a variable that appears in option pricing formulas. In the option pricing formula, it denotes the volatility of the underlying asset return from now to the expiration of the option. Some have created volatility indices. Here is an example, scale is 1-9; higher rating indirectly higher risk:

New muni bond issues scheduled to come to market within the next 30 days.

A new option contract introduced by the P.H.L.X. in 1994 that is settled in US$ rather than in the underlying currency. These options are also called 3-Ds (dollar denominated delivery).

Simultaneous purchase and sale of two options that differ only in their exercise price. See: horizontal spread.

A merger in which one firm acquires another firm that is in the same industry but at another stage in the production cycle. For example, the firm being acquired serves as a supplier to the firm doing the acquiring.

The process of dividing each expense item in the income statement of a given year by net sales to identify expense items that rise faster or slower than a change in sales.

Acquisition in which the acquired firm and the acquiring firm are at different steps in the production process.