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G - When the fifth letter of a NASDAQ stock symbol is a
G, the represented item is the first convertible bond of a company.
G-Hedge - An interest rate collar with an upfront premium and a even
range on both sides of the forward rate.
Gamma - A ratio comparing a change in the option delta to a small change
in the price of the asset on which the option is written.
Gamma Distribution - A standardized distribution which may determinate a
securities' price behavior.
Gap - The difference between a stock's price at the trading day opening
and the previous trading day’s closing price.
Gap Opening - Referring to general equities, an opening price that is
substantially different (higher or lower) than the previous day’s
closing price.
Garmen-Kohlhagen Option Pricing Model - A model used for pricing foreign
currency options.
Garn-St. Germain Act (1982) - Legislation that loosen requirements for
savings and loan associations in the United States, leading to
substantial losses covered by deposit insurance in the late 1980s.
Geared Equity Capital Unit (GECU - An open-ended equity-linked note,
leveraged by setting the floor value of the note below issuance price.
Geared Zero Coupon Convertibles - Zero coupon convertibles with a
minimum redemption value below par, no conversion premium or interim put
provision, no call provision, and exercise only at maturity.
Gearing - Ratio calculated by the price of the underlying divided by the
price of the call or warrant.
Geld und Brief - German for Bid (g) and asked (b).
GEM(Growing-Equity Mortgage) - A mortgages in which there are annual
increases in the monthly payment amount in order to reduce outstanding
principal and to shorten the term of the loan.
General Cash Offer - An offering made to the public.
General Obligation (GO) Bond - A bond backed by the full faith, credit
and taxing power of a municipal or soveriegn issuer.
General Partnership - Form of corporation where all owners are general
partners sharing in the profits, losses and management responsibilities.
Generalized Least Squares - A regression technique that is used when the
error terms from an ordinary least squares regression display non-random
patterns such as autocorrelation.
Generally Accepted Accounting Principals - The conventions, rules, and
procedures necessary to define accepted accounting practice in the U.S.
Gensaki Rate - The repurchase agreement rate on Japanese government
bonds.
Geographic Risk - Risks associated with an investment in relation to the
geographic area, for example, hurricanes and earthquakes.
Geometric Average - The mean
Geometric Mean Return - A measure of the compound rate of growth of the
initial portfolio market value during the evaluation period, showing all
cash distributions as if they were reinvested in the portfolio.
Gestation Repo - A reverse repurchase agreement between mortgage firms
and securities dealers.
Get Hit - Go with a lower price.
Get Out - Referring to general equities, to sell your interest in a
security.
Gilt-Edged Market-Maker (GEMM) - A principal in British Government
securities.
Gilt-Edged Securities - "Blue chip" securities of the British and Irish
government.
Gilts - Bonds issued by the government of the United Kingdom.
Gini Coefficient - A measure of a spreading within a group of values. It
is calculated as the average difference between every pair of values
divided by two times the average of the sample. The larger the
coefficient, the higher the rate of spreding.
Giro Bank - A European financial intermediary specializing in a
book-entry transaction settlement process that does not require actual
cash settlement.
Give Up - Referring to listed equity securities, situation when a trade
is made between two brokers via a third broker, also used to refer to
the distribution of commissions to brokers that did not participate in
the trade, but did provide a service such as research.
Glass-Steagall Act - Congressional act forbidding commercial banks to
own, underwrite, or deal in corporate stocks and bonds.
Global Asset Allocation - Strategy entailing investments in assets and
markets in a number of countries.
Global Bonds - Bonds designed for immediate trading in any domestic
capital market and in the Euromarket.
Global Credit Support Service (GCSS) - An over-the-counter derivative
collateralization service.
Global Depositary Receipts (GDRs) - Negotiable receipt for a given
number of shares of Euromarket instruments.
Global Fund - A mutual fund with the ability to invest anywhere in the
world. Globalization- Inclination toward the integration of national
capital markets and a worldwide investment environment.
Global Hedge - A hedge covering the aggregate risks of a portfolio or an
entire organization.
Globalization - The trend toward viewing economic and financial issues
from a worldwide perspective.
Globex - An electronic exchange network designed to trade a variety of
securities and derivatives.
GNMA Midget - A term used by dealers referring to GNMA pass-through
certificates backed by fixed rate mortgages with a 15-year maturity.
GNMA-I - Mortgage-backed securities on which holders receive separate
principal and interest payments on each of their certificates.
GNMA-II - Mortgage-backed securities on which holders receive an
aggregate principal and interest payment from a central paying agent on
all of their certificates.
Gnomes - A 15-year fixed rate pass-through security issued by the
Federal Home Loan Mortgage Corporation (Freddie Mac) under its cash
program.
Go Along - Referring to listed equity securities, buying or selling at
prices that randomly occur on the floor.
Go-Around - When the Fed solicits competitive bids or offers from
dealers to buy securities, to sell securities, to do repo, or to do
reverses.
Goes - Referring to general equities, meaning "trades".
Going Concern Value - Earning power of an venture’s assets plus its
goodwill.
Going Into The Trade - Referring to general equities, the condition of
the traders position in the security along with expectations of stock
placement with accounts just before taking an order to the exchange
floor for execution.
Going Out - Referring to general equities, advertising over the SS1,
Autex, or NASDAQ.
Going-Private Transactions - When a publicly owned stock in a firm goes
to complete equity ownership, or becomes privately held.
Gold Exchange Standard - A system for fixing exchange rates whereby the
US dollar is backed by gold and the currency of other countries is then
pegged to the US dollar.
Gold Loan - A loan denominated in ounces of gold and payable in either
gold or currency at the gold rate at repayment.
Gold Standard - A monetary system whereby currencies are defined in
terms of their gold content, and payments between countries are made in
gold.
Golden Parachute - A bonus or compensation paid to top level managers of
a firm in the event a takeover occurs.
Good 'Til Cancelled Order - An order to buy or sell a security at a
limit for an indefinite time period; an order that is good until
executed or canceled.
Good Delivery - Refers to a successful transfer of a security, a
delivery in which everything is in order.
Good Through/Until Date Order - Referring to general equities, market or
limited price order which is to be represented in the trading crowd for
a stated period of time unless cancelled, executed, or changed.
Goodwill - The excess of the purchase price over the fair market value
of the net assets acquired under the purchase method of accounting.
Governing Law - The jurisdiction’s legal system that interprets an
agreement.
Government National Mortgage Association (Ginnie Mae) - A US Government
Corporation, part of the Department of Housing & Urban Development. This
corporation invests in real estate loans and sells mortgage-backed
securities to investors in order to raise money to fund home and
business loans. Ginnie Mae guarantees timely payment of principal and
interest on securities issued by approved servicers that are
collateralized by FHA-issued, VA-guaranteed, or Farmers Home.
Government National Mortgage Association (GNMA) Paper - Debt securities
collateralized by residential mortgage debt and guaranteed as to payment
of interest and principal by the Government National Mortgage
Association, an agency of the United States government.
Government Securities - US Treasury securities that are negotiable.
Government Sponsored Enterprises - Privately owned entities created by
Congress to reduce the cost of capital for certain borrowing sectors of
the economy such as farmers, homeowners, and students.
Graduated-Payment Mortgages - A loan where the borrower’s payments are
lower than those of comparable mortgages in the beginning, but over a
predetermined period of time, the payments are increased and then fixed
at a level generally higher than that of comparable mortgages.
Grant Date - The effective date of an employee stock option.
Grantor Trust - Trust agreement whereby collateral for a mortgage-backed
security is deposited with a trustee or custodian.
Graveyard Market - Referring to general equities, market wherein
investors who must sell do so with substantial losses while potential
investors wait for market conditions to improve before investing.
Gray Market - Sales of Eurobonds that occur before the issue price is
set.
Great Call - Referring to general equities, when a customer may have an
interest in a trade, but does not have a working order in with the
trader.
Greeks - Option derivatives usually designated by a Greek letter.
Greenmail - When a company holds a large block of stock in a target
company forcing the target company to repurchase the stock at a premium
in order to avoid a takeover.
Greenshoe Option - Option allowing the underwriter for a new issue to
buy and resell additional shares.
Grey List - Referring to general equities, a list of stocks which can be
traded by the block desks, but not in risk arbitrage.
Gross Domestic Product (GDP) - The market value of goods and services
produced including the income of foreign corporations and foreign
residents working in the U.S., but not that of US residents and
corporations that are working overseas.
Gross Interest - Interest earned before taxes.
Gross National Product (GNP) - The economy’s total income. The GNP is
equal to the GDP plus the income of domestic residents abroad less that
of non-residents accrued domestically.
Gross Parity - Often referring to convertible securities and
international equities, equal to the convertible price including accrued
interest, equal to the international security price including
commissions, fees, stamp duty and other transaction costs, translated
into U.S. dollar amounts.
Gross Profit Margin - The amount left over after the cost of goods sold
is deducted.
Gross Replacement Value (GRV) - The cost of replacing all contracts with
a given counterparty that have a net present value, prior to possible
netting agreements adjustments.
Gross Settlement - A method of making separate payment on each
transaction between two parties.
Gross Spread - Portion or fraction of the gross proceeds of a securities
offering that is paid to the underwriters of the offering as
compensation.
Group Of Eight (G-8) - See Group of Five above: The Group of Five with
the addition of Canada, Italy, and Russia.
Group Of Five (G-5) - A group which includes the US, United Kingdom,
Japan, Germany, and France. This group meets periodically to discuss
international economic issues.
Group Of Seven (G-7) - See Group of Five above; The Group of Five with
the addition of Canada and Italy.
Group Rotation - Shifts from one investment sector to another to put
emphasis on groups with favorable prospects.
Growing Perpetuity - Cash flows that are endless and are expected to
increase indefinitely.
Growth Equivalent of Franchise Investments - A measure of the current
value of all corporate investments.
Growth Fund - Mutual fund that investing primarily in shares of growth
stocks with a goal of capital appreciation.
Growth Management - A management style that highlights the recent past
and potential of a company to increase its earnings per share.
Growth Manager - A money manager who buys stocks that are selling at
relatively high P/E ratios with an expectation of higher earnings
growth.
Growth Opportunity - An opportunity to invest in a profitable project.
Growth Phase - A phase of development in which a firm grows via
earnings, new products, and expanding market share.
Growth Rates - The compound annual growth rate for the number of full
fiscal years shown on a report.
Growth Stock - Any stock that appeals to investors that are seeking
appreciation of capital rather than asset preservation or current
income, generally these stocks are not in highly regulated industries
and do not pay significant dividends.
Guarantee - A contractual obligation to accept responsibility for
repayment of another entity's obligation.
Guarantee Fund - Assets available to cover a defaulting company's
obligations to creditors.
Guaranteed Bond - A bond on which the payment of principal, interest, or
both has been guaranteed by a party other than the issuer.
Guaranteed Coupon Reinvestment Bonds - A bonds which gives the holder a
series of options to receive coupons in cash or to reinvest it in the
same bond at par on the interest payment date.
Guaranteed Exchange Rate Warrant - Covered warrants on foreign stock
indexes issued in the United States by a financial intermediary with the
currency exchange rate at maturity fixed at the spot rate in effect at
issuance.
Guaranteed Index Unit - Zero coupon or low yield note combined with
capped or uncapped participations that provide upside exposure to
changes in the value of an equity index.
Guaranteed Insurance Contract - Contract- A contract assuring a stated
nominal interest rate over a certain period of time, usually several
years.
Guaranteed Investment Contract - An investment product that involves an
agreement by an insurance company to pay the principal amount of a
predetermined annual interest rate over the life of the investment in
return for a single premium.
Guaranteed Mortgage Certificates - Certificates issued by the Federal
Home Loan Mortgage Corporation (Freddie Mac) that represent undivided
interest in certain conventional whole loans and participations
previously purchased by the Federal Home Loan Mortgage Corporation.
Guaranteed Return Index Participation (GRIP) - Equity index-linked note
with index participation of less than 100 percent.
Guaranteed Return on Investment (GROI) Certificate - Position
guaranteeing investors a minimum return with a cap on the maximum
return.
Guaranteed Return Structure (GRS) - Product that guarantees a minimum
value at maturity or guarantees a minimum return based on levels reached
by the underlying during the life of the instrument.
Guaranteed Warrant - A stock index warrant issued by a corporation in
the United States market.
Guaranteed-Minimum Reinvestment Rate - A provision of some CMO tranches
that assures investors they will be able to reinvest their periodic cash
flows at a fixed rate.
Guarantor Program - The aggregation by a single issuer for the purpose
of forming a qualifying pool to be issued as PCs under the Federal Home
Loan Mortgage Corporation.
Guru - Slang term for any analyst or financial journalist who regularly
publishes predictions and recommendations in regard to the stock market.
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