Business / Finance Glossary

Good Faith Deposit: Refers to PSA Uniform Practices such as cutoff times on delivery of securities and notification, allocation, and proper endorsement.

Good Money: Used in the context of commodities. Refers to the initial margin account deposit needed when buying or selling a futures contract; approximately 2%-10% of the contract value. Used in the con . . . View Full Definition

Good Through-Until Date Order: Federal funds that clear on the same day, unlike clearinghouse funds, which require three days to clear.

Good Til Cancelled Order (GTC): Used in the context of general equities. Market or limited price order that remains viable for a stated period of time unless cancelled, executed, or changed, after which such order or the p . . . View Full Definition

Good-This-Month Order (GTM): An order to buy or sell stock that is good until you execute or cancel it. Brokerages usually set a limit of 30-60 days, at which the G.T.C. order expires if not restated. (Different from a . . . View Full Definition

Goodwill: An order to buy or sell securities that continues to be a valid order until the end of the current month.

Government National Mortgage Association (Ginnie Mae): Excess of purchase price over fair market value of net assets acquired under the purchase method of accounting.

Government Obligations: A wholly owned U.S. government corporation within the Department of Housing & Urban Development. Ginnie Mae guarantees the timely payment of principal and interest on securities issued by ap . . . View Full Definition

Government Securities: U.S. government-backed debt instruments, which are considered among the safest investments possible, including Treasury bonds, bills, and notes, and savings bonds.

Government Sponsored Enterprises: Negotiable U.S. Treasury securities.

Governments: Privately owned, publicly chartered entities, such as the Student Loan Marketing Association, created by Congress to reduce the cost of capital for certain borrowing sectors of the economy i . . . View Full Definition

Grace Period: U.S. government-issued securities, such as Treasury bills, bonds, and notes, and savings bonds. Governments are considered among the safest investments available as they are backed by the U. . . . View Full Definition

Graduated Call Writing: The time period stipulated in most loan contracts and insurance policies during which a late payment will not result in default or cancellation.

Graduated Lease: Selling covered call options at incrementally rising exercise prices, so that as the price of the underlying stock rises and the options are exercised, the seller receives a higher average p . . . View Full Definition

Graduated Security: A type of long-term lease whose payments are variable rather than fixed, and depend upon a benchmark rate, such as changes in the consumer price index.

Graduated-Payment Mortgage (GPM): A security that has moved from listing on an exchange of less prominence to one of more prominence.

Graham And Dodd Method Of Investing: A type of stepped-payment loan in which the borrower's payments are initially lower than those on a comparable level-rate mortgage. The payments gradually increase over a predetermined perio . . . View Full Definition

Graham-Harvey Measure 1: An investment strategy based on security analysis and identification. Investors buy stocks with undervalued assets speculating that these assets will appreciate to their true value.

Graham-Harvey Measure 2: Performance measure developed by John Graham and Campbell Harvey. The idea is to lever a fund's portfolio to exactly match the volatility of the S&P 500. The difference between the fund's le . . . View Full Definition

Grandfather Clause: Performance measure developed by John Graham and Campbell Harvey. The idea is to lever the S&P 500 portfolio to exactly match the volatility of the fund. The difference between the fund's re . . . View Full Definition

Grantor: A provision included in a new rule or regulation that exempts a business that is already conducting business in the area addressed by the regulation from penalty or restriction.

Grantor Retained Income Trust (GRIT): A trader in the options market who makes premium income by selling options.

Grantor Trust: A tax-saving trust in which a grantor transfers property to a beneficiary, but receives income until termination, at which time the beneficiary begins receiving the income.

Graveyard Market: A mechanism of issuing MBS wherein the mortgages' collateral is deposited with a trustee under a custodial or trust agreement.

Gray Knight: Bear market in which investors who sell are faced with substantial losses, while potential investors prefer to stay liquid; that is, to keep their money in cash or cash equivalents until mar . . . View Full Definition

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