Warrants:
A security that gives the holder the right to purchase
securities from the warrant issuer at a stipulated
subscription price. Warrants are usually long-term
instruments, with expiration dates years in the future.
Wash Sale:
When an investor repurchases an asset within 30 days of
the sale date and reports the original sale as a tax loss.
The Internal Revenue Service prohibits wash sales since no
change in ownership takes place.
When Issued (WI):
A securities issue authorized and sold to investors but
not yet physically available for delivery. Often a
"WI" designation will follow a stock symbol in
the newspaper.
Whipsaw:
A volatile market that can punish an active trader who
buys just before prices fall and then sells first before
prices recover. This risk is inconsequential to long-term
investors.
Write / Writer:
To sell an option that is not owned through an opening
sale transaction. While this position remains open, the
writer is subject to fulfilling the obligations of that
option contract; i.e., to sell stock (in the case of a
call) or buy stock (in the case of a put) if that option
is assigned. An investor who so sells an option is called
the writer, regardless of whether the option is covered or
uncovered.
X or XD:
Symbol used in newspapers to indicate that a stock is
trading without a dividend. The symbol X also signifies
without interest in bond tables. In most cases, it is wise
to find out when a dividend paying stock will trade
ex-dividend. By buying when the stock is ex-dividend, you
avoid the tax liability on the just distributed dividend.
Note that after a dividend is paid, the stock's price
falls by the amount of the dividend paid, plus or minus
any market adjustment. The same principle holds for mutual
funds paying distributions. Buy shares after distributions
are made. Stock mutual funds usually make distributions in
December or January.
Year to Date (YTD):
Total return for a partial year. See also TOTAL
RETURN.
Year-End Values:
The market value of an account at any given year-end. Used
to quickly gauge year-to-year changes.
Yellow Sheets:
A daily listing of bonds, prices, and market makers for
corporate bonds not listed on major exchanges.
Yield Curve:
Graph that shows a series of current interest rates, most
often of U.S. Treasury issues from 3 months to 30 years
maturity. A snap shot of the interest rate structure of the
economy and sometimes a predictor of economic trends.
Normally, the yield curve is moderately positive meaning
that investors want higher rates the longer the maturity to
offset the risk of holding the bond to maturity while rates
go up for newly issued bonds. A negative curve occurs when
investors fear that in the short term, rates will be high
and money will remain "tight" near-term. When a
negative curve starts to flatten a powerful stock and bond
rally usually ensues. A steep curve occurs when investors
don't fear inflation in the near-term but are concerned
about the long term. A sudden flattening of a steep curve in
which the short end rises can be a harmful sign for the
stock and bond markets.
Yield Spread:
Difference in yield between various bonds of equivalent time
to maturity. Since time to maturity is the same, the major
distinguishing variable is quality. For example, a 5 year
U.S. Treasury Note will have a lower current yield than a
comparable 5-year corporate bond.
Yield to Call:
Yield on a bond which will be called by the issuer at the
first call date.
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