Business / Finance Glossary

Bid: The price a potential buyer is willing to pay for a security. Sometimes also used in the context of takeovers where one corporation is bidding for (trying to buy) another corporation. In tra . . . View Full Definition

Bid Away: Refers to over-the-counter trading. Bid from another dealer exists at the same (listed) or higher (O.T.C.) price.

Bid Price: This is the quoted bid, or the highest price an investor is willing to pay to buy a security. Practically speaking, this is the available price at which an investor can sell shares of stock. . . . View Full Definition

Bid Wanted: Used in the context of general equities. Announcement that a holder of securities wants to sell and will entertain bids.

Bid-Asked Spread: The difference between the bid and the asked prices.

Bid-To-Cover Ratio: The ratio of the number of bids received in a Treasury security auction compared to the number of accepted bids.

Bidder: A firm or person that wants to buy a firm or security.

Bidding Buyer: In the context of general equities, a nonaggressive buyer who prefers to await a natural seller in the hope of paying a lower price.

Bidding Through The Market: In the context of general equities, aggressive willingness to purchase a security at a premium to the inside market. Contrast with bidding buyer.

Bidding Up: Moving the bid price higher.

Big Bang: The term applied to the liberalization in 1986 of the London Stock Exchange (L.S.E.) when trading was automated.

Big Board: A nickname for the New York Stock Exchange (NYSE). Also known as The Exchange. More than 2,000 common and preferred stocks are traded. Founded in 1792, the N.Y.S.E. is the oldest exchange in . . . View Full Definition

Big Picture: To highlight trading interest due to the size of the trade.

Big Producer: A successful broker who generates a large volume of commission. See Rainmaker.

Big Uglies: Unpopular stocks.

Bill Of Exchange: General term for a document demanding payment.

Bill Of Lading: A contract between an exporter and a transportation company in which the latter agrees to transport the goods under specified conditions that limit its liability. It is the exporter's receip . . . View Full Definition

Billing Cycle: The time elapsed between billing periods for goods sold or services rendered.

Binder: An amount of money paid to indicate good faith in a transaction before the transaction is completed.

Binomial Option Pricing Model: An option pricing model in which the underlying asset can assume one of only two possible, discrete values in the next time period for each value that it can take on in the preceding time period.

Black Friday: A precipitous drop in a financial market . The original Black Friday occurred on September 24, 1869, when prospectors attempted to corner the gold market.

Black Market: An illegal market.

Black Monday: Refers to October 19, 1987, when the Dow Jones Industrial Average fell 508 points on the heels of sharp drops the previous week. On Monday, October 27, 1997, the Dow dropped 554 points. Whil . . . View Full Definition

Black-Scholes Option-Pricing Model: A model for pricing call options based on arbitrage arguments. Uses the stock price, the exercise price, the risk-free interest rate, the time to expiration, and the expected standard deviat . . . View Full Definition

Blank Check: A check that is duly signed, but the amount of the check is left blank to be supplied by the drawee.

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