Back-end Load:
See EXIT FEE.

Backspread:
A delta-neutral spread composed of more long options than short options on the same underlying instrument. This position generally profits from a large movement in either direction in the underlying instrument.

Balance Sheet:
A report stating the financial status of an individual or business at a given time.

Balanced Mutual Funds:
A mutual fund whose holdings are split between stocks and bonds.

Basis Point:
The smallest measure used in quoting yields and interest rates. One basis point equals .01%, a 100 basis point move in a U.S. Treasury bond yield is 1%.

Bear:
An adjective describing the opinion that a stock, or a market in general, will decline in price -- a negative or pessimistic outlook.

Bear Spread (call):
The simultaneous writing of one call option with a lower strike price and the purchase of another call option with a higher strike price. E.g.: Writing 1 XYZ Jan 50 call, and buying 1 XYZ Jan 55 call.

Bear Spread (put):
The simultaneous purchase of one put option with a higher strike price and the writing of another put option with a lower strike price. E.g.: Buying 1 XYZ Jan 55 put, and writing 1 XYZ Jan 50 put.

Beta:
A measure of risk commonly used to compare the volatility of mutual funds or stocks to the overall market. The S&P 500 Index is the base for calculating beta and carries a value of 1. Securities with betas below 1 are less risky than the market as a whole. Betas above 1 are more risky. A beta of 1.3 is 30% more volatile than the S&P 500. Betas with negative values are inversely related to the S&P 500. Note: The beta of precious metals can be low but these funds have high price volatility. You cannot compare the beta of bond funds against the beta of equity funds, because the bond fund beta is calculated using the Shearson Long Bond Index rather than the S&P 500 Index.

Bid / bid Price:
The highest price a dealer is willing to pay for a security at a particular time.

Block Trade:
A measure of the net asset worth of a company's common stock, calculated by subtracting a company's intangible assets and preferred stock from total net worth and then dividing by the amount of common shares outstanding.

Book Value Per Share:
Net asset worth of a company's common stock.

Box Spread:
A four-sided option spread that involves a long call and a short put at one strike price as well as a short call and a long put at another strike price. E.g.: Buying 1 XYZ Jan 50 call, and writing 1 XYZ Jan 55 call; simultaneously buying 1 XYZ Jan 55 put, and writing 1 Jan 50 put.
Break-even Point(s):
The stock price(s) at which an option strategy results in neither a profit nor a loss. An option strategy's break-even point(s) are normally stated as of the option's expiration date, a theoretical option pricing model can be used to determine the strategy's break-even point(s) for other dates as well.

Broker Loan Rate:
Interest rate at which brokerage firms borrow from banks to finance their clients' security positions. Call loan rate is sometimes used because the loans can be called on a 24-hour notice.

Bull Spread (call):
The simultaneous purchase of one call option with a lower strike price and the writing of another call option with a higher strike price. E.g.: Buying 1 XYZ Jan 50 call, and writing 1 XYZ Jan 55 call.

Bull Spread (put):
The simultaneous writing of one put option with a higher strike price and the purchase of another put option with a lower strike price. E.g.: Writing 1 XYZ Jan 55 put, and buying 1 XYZ Jan 50 put.

Bull:
A person who believes that a stock, or the market in general, will rise in price -- a positive or optimistic outlook.

Butterfly Spread:
A strategy involving four options and three strike prices that has both limited risk and limited profit potential. A long call butterfly is established by buying one call at the lowest strike price, writing two calls at the middle strike price, and buying one call at the highest strike price. A long put butterfly is established by buying one put at the highest strike price, writing two puts at the middle strike price, and buying one put at the lowest strike price. E.g.: A long call butterfly might be buying 1 XYZ Jan 50 call, writing 2 XYZ Jan 55 calls and buying 1 XYZ Jan 60 call.

Buying Power:
The amount of money available to buy securities. This is determined by the sum of the cash held in the brokerage account and the loan value of marginable securities.

Buy-to-Cover:
A transaction type that is a closing transaction for a short sell position.

Buy-write:
A covered call position in which stock is purchased and an equivalent number of calls written at the same time. This position may be transacted as a spread order, with both sides (buying stock and writing calls) being executed simultaneously. E.g.: Buying 200 shares XYZ stock, and writing 2XYZ Jan 50 calls. See also COVERED CALL WRITING.