GLOSSARY

---

A financial contract giving the purchaser the right, but not obligation, to buy or sell an underlying asset (usually a stock) at a pre-determined "strike price", within a certain timeframe. The idea is, without having to actually own the asset, they maintain the potential to profit from the price fluctuations. . A future price movement on a security. 

A financial contract, owned by an options buyer, and gives them the right to sell their asset at a pre-determined price within a certain timeframe. The seller is paid a premium for this right.

The price at which a stock (equity) is bought or sold. Pre-determined in the options contract to execute a trade when the stock price reaches the stop price.

An employer sponsored retirement plan. It is required to meet certain requirements put in place by the IRS in order to qualify for tax-favored treatment. This provides, both the employer and employee, the ability to contribute pre-tax  dollars to plan  and allow the funds to grow tax-deferred until the withdrawal phase in retirement. (ex: 401k is a qualified plan)

The measure of an investments profitability when comparing its' cost (purchase and maintenance) to the gain or loss realized. Expressed as a percentage.

                          R.O.I. = Profit - Cost (expenses)       

                                                    Cost (purchase price)

Over a selected timeframe, what the investor is returned for investment. Either a profit or loss (a loss is called a "negative return" assuming the initial investment is greater than $0). It is expressed in the form of hole dollars or as a percentage of  the total amount invested. 

A broad term, in the world of finance, to include a comprehensive list of investment strategies. Some of these include stocks, bonds (federal, state and local), limited partnerships, debentures, notes and an array of investment contracts. 

A rare occurrence, where a combination of high inflation and a stagnant GDP merge with an elevated unemployment rate. This phenomenon was experienced in the early 1970's and most recently in 2022. Tightening monetary policy is the first line of defense to curb inflation, at the cost of exacerbating unemployment, but in this scenario unemployment is already high. 

Represents ownership in a company and one share of stock is a portion of that ownership. The R.O.I. (return on investment) can be in the form of value appreciation or dividend payout. They are categorized as common stock or preferred stock. AKA Equity

While common stock represents a share of ownership in a corporation, it comes with certain "rights of ownership", as well. (Ex: dividend payments, voting rights (one vote per share) and asset claims). AKA Ordinary Shares or Voting Shares

Designed to be a combination of common stock and bonds.It offers ownership in a company, just like common stock, but with the bonus of a fixed dividend., like the bond. These shareholders receive preferential treatment over common shareholders in the event of liquidation and dividend payouts. Lastly, shares of preferred stock have a higher dividend yield than common stock or bonds.