Glossary

G

Gearing
A company’s debts expressed as a percentage of its equity capital. High gearing means debts are high in relation to equity capital.
General Obligation (GO) Bond
A municipal bond whose issuer’s ability to pay back principal and interest is based on its full taxing power.
Ginnie Mae
Nickname for the Government National Mortgage Association and the mortgage–backed securities it issues.
GNMA
See Government National Mortgage Association.
Gold – GOX
The CBOE Gold Index – (GOX) is an equal–dollar–weighted index composed of 10 companies involved primarily in gold mining and production. The index is re–balanced after the close of business on expiration Friday on the March quarterly cycle.
Good Delivery
Securities delivered to the broker from the seller that are properly endorsed and in proper order to be delivered to the buyer.
Good–Til–Canceled (open) Order (GTC)
An order that does not expire at the end of the day it is entered. Instead, it remains in force until it is either executed or canceled. Ameritrade cancels all GTC orders at the end of the next month after the order has been placed.
Government Bond
Debt security issued by the U.S. Government.
Government National Mortgage Association (GNMA)
A government corporation that provides primary mortgages through bond issuances. Its securities are called Ginnie Maes.
Growth Stock
Stock of a company in a new industry or of a company participating in an emerging industry.
GTC
See Good–til–Canceled (Open) Order.
Guardian
Someone who manages securities in a minor’s account or someone who handles the affairs of an incompetent person.

H

Hedge
To reduce the risk in one security by taking an offsetting position in a related security.
Held
A situation where a security is temporarily not available for trading (e.g. Market Makers are not allowed to display quotes).
HH Savings Bonds
A savings bond that pays semiannual coupon interest, unlike EE savings bonds.
Hit the Bid
This is the term used for when traders sell to the current posted bid.
House Maintenance Call
Demand to the customer for additional funds from the brokerage firm because the equity in the customer’s margin account has fallen below the minimum amount allowed by the firm.
House Requirement
The minimum amount of equity brokerage firms require margin clients to maintain in the account.
Hypothecation
A brokerage firm’s pledging of margin securities at a bank to secure the funds necessary to carry an account’s debit balance.

I

Immediate–or–Cancel (IOC)
An instruction on an order that requires execution of as many lots as can be filled immediately, and the rest canceled.
Income Bonds
Bonds issued when the ability of the issuing company to pay interest is questioned. They are speculative instruments that pay high rates of interest.
Income Stream
A strategy of arranging bonds so that they produce a consistent series of payments.
Indenture
The terms of a corporate bond. Also known as deed of trust, it appears on the face of the bond certificate.
Industrial Revenue (ID Revenue, ID Revs, or Industrial Rev) Bond
A form of municipal bond whose issuer’s ability to pay interest and principal is based on revenue earned from an industrial complex.
Inside Ask
The lowest price at which someone is willing to sell a security.
Inside Bid
The highest price at which someone is willing to buy a security.
Inside Market
The highest bid and the lowest offer prices among all competing Market Makers in a Nasdaq security, i.e., the best bid and offer prices.
Insider
Person with nonpublic information on a corporation. Directors, officers and stockholders owning more than 10% of any one class of stock are usually considered insiders.
Insider Dealing
The purchase or sale of shares by someone who possesses "inside" information about the company; i.e., information on the company’s performance and prospects which has not yet been made available to the market as a whole and which, if available, might affect the share price.
Interest Rate Risk
The prospect that Treasury and agency securities will decline in price if economy–wide interest rates rise.
Interim Dividend
A dividend declared part way through a company’s financial year, authorized solely by the directors.
Intermediate–Term Bonds
Those maturing five to ten years after original issue.
In–The–Money
Used to describe options that the holder would profit from exercising. Call options are in–the–money when the underlying security’s value is greater than the option’s strike price. Put options are in–the–money when the underlying security’s value is less than the option’s strike price.
Investment Banker
See underwriter.
Investment Trust
Company whose sole business consists of buying, selling and holding shares.
IPO Date
The date that the security started publicly trading.
IRA – Individual Retirement Accounts
A tax–deferred retirement plan created by the U.S. government.
Issue
(1) The process by which a new security is brought to market. (2) Any security.
Issue Date
Month and day that a security is initially issued.
Issued Stock
Stock sold to the public.

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