Business / Finance Glossary

Bear Spread: Applies to derivative products. Strategy in the options market designed to take advantage of a fall in the price of a security or commodity, usually executed by buying a combination of calls . . . View Full Definition

Bear Trap: The predicament facing short sellers when a bear market reverses its trend and becomes bullish. The assets continue to sell in anticipation of further declines in price, and short sellers th . . . View Full Definition

Bearer Bond: Bonds that are not registered on the books of the issuer. Such bonds are held in physical form by the owner, who receives interest payments by physically detaching coupons from the bond cert . . . View Full Definition

Bearer Form: Describes issue form of security not registered on the issuing corporation's books, and therefore payable to its bearer. See also: Bearer bond; coupon bond.

Bearer Share: Security not registered on the books of the issuing corporation and thus payable to possessor of the shares. Negotiable without endorsement and transferred by delivery, thus avoiding some of . . . View Full Definition

Bearish: Words used to describe investor attitude.

Beating The Gun: In the context of general equities, gaining an advantageous price in a trade through a quick response to market developments.

Before-Tax Profit Margin: The ratio of net income before taxes to net sales.

Beggar-Thy-Neighbor: An international trade policy of competitive devaluations and increased protective barriers that one country institutes to gain at the expense of its trading partners.

Beggar-Thy-Neighbor Devaluation: A devaluation that is designed to cheapen a nation's currency and thereby increase its exports at the expense of other countries. Devaluation can also reduce a nation's imports. Such devalua . . . View Full Definition

Behind: Used for listed equity securities. At the same price but entered after your order/interest, such as on the specialist's book. Antithesis of ahead of you.

Bell: Signal on a stock exchange to indicate the open and close of trading.

Bellwether Issues: Related: Benchmark issues.

Below Par: Less than the nominal or face value of a security.

Benchmark: The performance of a predetermined set of securities, used for comparison purposes. Such sets may be based on published indexes or may be customized to suit an investment strategy.

Benchmark Error: Use of an inappropriate proxy for the true market portfolio.

Benchmark Interest Rate: Also called the base interest rate, it is the minimum interest rate investors will demand for investing in a non-Treasury security. It is also tied to the yield to maturity offered on the co . . . View Full Definition

Benchmark Issue: Also called on-the-run or current-coupon issue or bellwether issues. In the secondary market, the benchmark issue is the most recently auctioned Treasury issues for each maturity.

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