Business / Finance Glossary

Trading Dividends: Costs of buying and selling marketable securities and borrowing. Trading costs include commissions, slippage, and the bid/ask spread. See: Transactions costs.

Trading Halt: Maximizing a firm's revenues by purchasing stock in other firms in order to collect the maximum amount of dividends of which 70% is tax-free.

Trading Paper: When trading of a stock, bond, option or futures contract is stopped by an exchange while news is being broadcast about the security. See: Suspended trading.

Trading Pattern: CDs purchased by accounts that are likely to resell them. The term is commonly used in the Euromarket.

Trading Posts: Long-range direction of a security or commodity futures price, charted by drawing one line connecting the highest prices the security has reached and another line connecting the lowest price . . . View Full Definition

Trading Profit: The positions on the floor of a stock exchange where the specialists stand and securities are traded.

Trading Range: The profit earned on short-term trades of securities held for less than one year, subject to tax at normal income tax rates.

Trading Unit: The difference between the high and low prices traded during a period of time; for commodities, the high/low price limit an exchange establishes for a specific commodity for any one day's trading.

Trading Variation: The number of shares of a particular security that is used as the acceptable quantity for trading on the exchanges.

Trading Volume: The increments to which securities prices are rounded up or rounded down.

Traditional View (Of Dividend Policy): The average volume (in thousands and local currency) of common shares traded during the last three years and one year on the major exchange that the shares are listed on. For U.S. companies . . . View Full Definition

Tranche: An argument that, 'within reason,' investors prefer higher dividends to lower dividends because the dividend is sure but future capital gains are uncertain.

Transaction: One of several related securities offered at the same time. Tranches from the same offering usually have different risk, reward, and/or maturity characteristics.

Transaction Demand (For Money): The delivery of a security by a seller and its acceptance by the buyer.

Transaction Exposure: The money needed to accommodate a firm's expected cash transactions.

Transaction Loan: Risk to a firm with known future cash flows in a foreign currency, that arises from possible changes in the exchange rate. Related: Translation exposure.

Transaction Tax: A loan extended by a bank for a specific purpose. Lines of credit and revolving credit agreements involve by contrast loans that can be used for various purposes.

Transactions Costs: Applies mainly to international equities. Levies on a deal that foreign governments sometimes charge.

Transactions Motive: The time, effort, and money necessary, including such things as commission fees and the cost of physically moving the asset from seller to buyer. Related: Round-trip transactions costs, info . . . View Full Definition

Transfer: A desire to hold cash in order to conduct cash-based transactions.

Transfer Agent: A change of ownership from one person or party to another.

Transfer Payments: Individual or institution a company appoints to look after the transfer of securities.

Transfer Price: Payments from a government to its citizens, such as welfare and other government benefits.

Transfer Tax: The price at which one unit of a firm sells goods or services to another unit of the same firm.

Transferable Put Right: A small federal tax on the movement of ownership of all bonds (except obligations of the U.S., foreign governments, states, and municipalities) and all stocks.

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