Tax Method:
IRS defined system for determining which open lots to sell
or buy-to-cover when all lots of an investment are not
sold or covered at one time. FIFO means selling or
covering the lots in the same order by date as they were
bought or shorted. Specific Lot means selling or covering
specific lots that have been pre-selected before the trade
is actually executed. Average Cost means using the average
cost of all shares as the cost basis without the need to
specify which lot is actually being traded.
Tax-Deferred:
Applies to an investment with accumulated earnings that
are free from taxation until the investor takes possession
of them. Usually, you cannot take possession of these
investments without penalty until you are 59-1/2 years
old. Tax-deferred investments are allowed by the IRS to
save for retirement.
Tax-Exempt Security:
An investment (generally a debt instrument, i.e., bond)
whose interest is exempt from taxation by federal, state,
and/or local authorities. Frequently called municipal
bonds or munis, whether they were issued by a state
government or agency, or by any local political district
or subdivision. Tax-exempt securities are best applied to
taxable accounts, as the yield is not competitive enough
to be used in tax-deferred accounts. Tax-exempt issues can
be taxable under certain circumstances.
T-Bills:
T-Bills, the common name for a U.S. Treasury bill, are
short-term (with a maturity of up to a year) discounted
government securities sold through competitive bidding at
weekly and monthly auctions in denominations from $10,000
to $1 million. Individuals can also purchase them directly
from a Federal Reserve Bank in denominations of under
$500,000.
Technical Analysis:
A method of predicting future stock price movements based
on the study of historical market data such as (among
others) the prices themselves, trading volume, open
interest, the relation of advancing issues to declining
issues, and short selling volume.
Technical Short Value:
The market value of a security, which the client has sold
but has not yet, delivered to the broker.
Theoretical Option Pricing Model:
See BLACK-SCHOLES
FORMULA.
Theoretical Value:
The estimated value of an option derived from a
mathematical model. See also MODEL;
BLACK-SCHOLES
FORMULA.
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