WomensFinance.com

Glossary : C

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Calendar effect: The tendency of stocks to perform differently at different times, including such anomalies as the January effect, month-of-the-year effect, day-of-the-week effect, and holiday effect.
Calendar spread: Applies to derivative products. Bull spread in which there is a simultaneous purchase and sale of options of the same class at different strike prices, but with the same expiration date.
Call: An option that gives the right to buy the underlying futures contract.
Callable: Mainly applies to convertible securities. Redeemable by the issuer before the scheduled maturity under specific conditions and at a stated price, which usually begins at a premium to par and declines annually. Bonds are usually "called" when interest rates fall so significantly that the issuer can save money by floating new bonds at lower rates.
Call an option: To exercise a call option.
Call date: A date before maturity, specified at issuance, when the issuer of a bond may retire part of the bond for a specified call price.
Called away: Convertibles: redeemed before maturity.
Option: Call or put option exercised against the stockholder.
Sale: Delivery required on a short sale.
Call money rate: Also called the broker loan rate , the interest rate that banks charge brokers to finance margin loans to investors. The broker charges the investor the call money rate plus a service charge.
Call option: An option contract that gives its holder the right (but not the obligation) to purchase a specified number of shares of the underlying stock at the given strike price, on or before the expiration date of the contract.
Call premium: Premium in price above the par value of a bond or share of preferred stock that must be paid to holders to redeem the bond or share of preferred stock before its scheduled maturity date.
Call price: The price, specified at issuance, at which the issuer of a bond may retire part of the bond at a specified call date.
Call protection: A feature of some callable bonds that establishes an initial period when the bonds may not be called.
Call provision: An embedded option granting a bond issuer the right to buy back all or part of the issue prior to maturity.
Call risk: The combination of cash flow uncertainty and reinvestment risk introduced by a call provision.
Call swaption: A swaption in which the buyer has the right to enter into a swap as a fixed-rate payer. The writer therefore becomes the fixed-rate receiver/floating rate payer.

Cancel: Used in the context of general equities. Void an order to buy or sell from 1) the floor, or 2) the trader/salesman's scope. In Autex, the indication still remains on record as having once been placed unless it is expunged.
Canadian agencies: agency banks established by Canadian Banks in the U.S.
Canadian Dealing Network (C.D.N.): The organized O.T.C. market of Canada. Formerly known as the Canadian Over-the counter Automated Trading System (COATS), the C.D.N. became a subsidiary of the Toronto Stock Exchange in 1991.
Canadian Exchange Group (C.E.G.): The C.E.G. is an association between the Toronto Stock Exchange, the Montreal Exchange, the Vancouver Stock Exchange, the Alberta Stock Exchange and the Winnipeg Stock Exchange for the purpose of providing Canadian market data to customers outside Canada.
"Can get $xxx": Refers to over-the-counter trading. "I have a buyer who will pay $xxx for the stock "; usually a standard markdown (1/8) from $xxx is applied to this price in bidding the seller for his stock. Antithesis of cost me.
"Cannot compete": Used in the context of general equities. Cannot accommodate customers (i.e., compete with other market-makers) at that price level, often due to not having a natural opposite side of the trade.
"Cannot complete": Used in the context of general equities. Inability to finish an order on a principal or agency basis given prevailing price instructions and/or market conditions.
Cap: An upper limit on the interest rate on a floating-rate note (F.R.N.) or an adjustable rate mortgage (A.R.M.).

Capital: Money invested in a firm.
Capital account: Net result of public and private international investment and lending activities.
Capital allocation decision: Allocation of invested funds between risk-free assets and the risky portfolio.
Capital asset pricing model (C.A.P.M.): An economic theory that describes the relationship between risk; and expected return, and serves as a model for the pricing of risky securities. The C.A.P.M. asserts that the only risk that is priced by rational investors is systematic risk, because that risk cannot be eliminated by diversification. The C.A.P.M. says that the expected return of a security or a portfolio is equal to the rate on a risk-free security plus a risk premium.
Capital budget: A firm's set of planned capital expenditures.
Capital budgeting: The process of choosing the firm's long-term capital assets.

Capital expenditures: Amount used during a particular period to acquire or improve long-term; assets such as property, plant or equipment.
Capital flight: The transfer of capital abroad in response to fears of political risk.
Capital gain: When a stock is sold for a profit, it's the difference between the net sales price of securities and their net cost, or original basis. If a stock is sold below cost, the difference is a capital loss.
Capital gains yield: The price change portion of a stock's return.
Capital lease: A lease obligation that has to be capitalized on the balance sheet.
Capital loss: The difference between the net cost of a security and the net sale price, if
that security is sold at a loss.
Capital market: The market for trading long-term debt instruments (those that mature in
more than one year).
Capital market efficiency: Reflects the relative amount of wealth wasted in making transactions. An efficient capital market allows the transfer of assets with little wealth loss. See: efficient market hypothesis.
Capital market imperfections view: The view that issuing debt is generally valuable but that the firm's optimal choice of capital structure is a dynamic process that involves the other views of capital structure (net corporate/personal tax, agency cost, bankruptcy cost, and pecking order), which result from considerations of asymmetric information, asymmetric taxes, and transaction costs.
Capital market line (C.M.L.): The line defined by every combination of the risk-free asset and the market portfolio. The line represents the extra risk premium you get for taking an extra risk. Defined by the Capital Asset Pricing Model.
Capital rationing: Placing one or more limits on the amount of new investment undertaken by a firm, either by using a higher cost of capital, or by setting a maximum on parts of, and/or the entirety of, the capital budget.
Capital stock: Stock authorized by a firm's charter and having par value, stated value, or no par value. The number and value of issued shares are usually shown, together with the number of shares authorized, in the capital accounts section of the balance sheet. See: Common stock
Capital structure: The makeup of the liabilities and stockholders' equity side of the balance sheet, especially the ratio of debt to equity and the mixture of short and
long maturities.

Capital surplus: Amounts of directly contributed equity capital in excess of the par value.
Capitalization: The debt and/or equity mix that funds a firm's assets.
Capitalization method: A method of constructing a replicating portfolio in which the manager purchases a number of the largest-capitalized names in the stock index in proportion to their capitalization.
Capitalization ratios: Also called financial leverage ratios, these ratios compare debt to total capitalization and thus reflect the extent to which a corporation is trading on its equity. Capitalization ratios can be interpreted only in the context of the stability of industry and company earnings and cash flow.
Capitalization table: A table showing the capitalization of a firm, which typically includes the amount of capital obtained from each source - long-term debt and common equity - and the respective capitalization ratios.
Capitalized: Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives greater than one year.
Capitalized interest: Interest that is not immediately expensed, but rather is considered as an asset and is then amortized through the income statement over time.
Car: A loose quantity term sometimes used to describe the amount of a commodity underlying one commodity contract; e.g., "a car of bellies." Derived from the fact that quantities of the product specified in a contract used to correspond closely to the capacity of a railroad car.
Certificates of Amortized Revolving Debt (C.A.R.D.s): Pass-through securities backed by credit card receivables.
Carry: Related:net financing cost.
Carrying costs: Costs that increase with increases in the level of investment in current assets.
Carrying value: Book value.
Certificates of Automobile Receivables (C.A.R.s): Pass-through securities backed by automobile receivables.
Cash: The value of assets that can be converted into cash immediately, as reported by a company. Usually includes bank accounts and marketable securities, such as government bonds and Banker's Acceptances. Cash equivalents on balance sheets include securities (e.g., notes) that mature within 90 days.
Cash budget: A forecasted summary of a firm's expected cash inflows and cash outflows as well as its expected cash and loan balances.
Cash & carry: Applies to derivative products. Combination of a long position in a stock/index/commodity and short position in the underlying future, whereby a cost of carry exists on the long position.
Cash and equivalents: The value of assets that can be converted into cash immediately, as reported by a company. Usually includes bank accounts and marketable securities, such as government bonds and Banker's Acceptances. Cash equivalents on balance sheets include securities (e.g., notes) that mature within 90 days.
Cash commodity: The actual physical commodity, as distinguished from a futures contract.
Cash conversion cycle: The length of time between a firm's purchase of inventory and the receipt of cash from accounts receivable.
Cash cow: A company that pays out most of its earnings per share to stockholders as dividends. Or, a company or division of a company that generates a steady and significant amount of free cash flow.
Cash cycle: In general, the time between cash disbursement and cash collection. In net working capital management, it can be thought of as the operating cycle less the accounts payable payment period.
Cash deficiency agreement: An agreement to invest cash in a project to the extent required to cover any cash deficiency the project may experience.

Cash delivery: The provision of some futures contracts that requires not delivery of underlying assets but settlement according to the cash value of the asset.
Cash discount: An incentive offered to purchasers of a firm's product for payment within a specified time period, such as ten days.
Cash dividend: A dividend paid in cash to a company's shareholders. The amount is normally based on profitability and is taxable as income. A cash distribution may include capital gains and return of capital in addition to the dividend.
Cash equivalent: A short-term security that is sufficiently liquid that it may be considered the financial equivalent of cash.
Cash flow: In investments, it represents earnings before depreciation, amortizationand non-cash charges. Sometimes called cash earnings. Cash flow from operations (called funds from operations) by real estate and other investment trusts is important because it indicates the ability to pay dividends.
Cash flow after interest and taxes: Net income plus depreciation.
Cash flow coverage ratio: The number of times that financial obligations (for interest, principal payments, preferred stock dividends, and rental payments) are covered by earnings before interest, taxes, rental payments, and depreciation.
Cash flow from operations: A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus non-cash expenses that were deducted in calculating net income.
Cash flow matching: Also called dedicating a portfolio, this is an alternative to multiperiod immunization in which the manager matches the maturity of each element in the liability stream, working backward from the last liability to assure all required cash flows.
Cash flow per common share: Cash flow from operations minus preferred stock dividends, divided by the number of common shares outstanding.
Cash flow time-line: Line depicting the operating activities and cash flows for a firm over a particular period.
Cash-flow break-even point: The point below which the firm will need either to obtain additional financing or to liquidate some of its assets to meet its fixed costs.
Cash management bill: Very short maturity bills that the Treasury occasionally sells because its cash balances are down and it needs money for a few days.

Cash markets: Also called spot markets, these are markets that involve the immediate delivery of a security or instrument. Related: Derivative markets.
Cash offer: Often used in risk arbitrage. Proposal, either hostile or friendly, to acquire a target company through the payment of cash for the stock of the target. Compare to exchange offer.
Cash plus convertible: Mainly applies to convertible securities. Convertible bond which requires cash payment upon conversion.
Cash price: Applies to derivative products. See: Spot price.
Cash ratio: The proportion of a firm's assets held as cash.
Cash sale/settlement: Used in the context of general equities. Transaction in which the contract is settled on the same day as the trade date, or next day if the trade is after 2:30 p.m. E.S.T. And the parties agree to this procedure. Often settled in this way because a party is strapped for cash and cannot wait until the regular, five business day, settlement. See: Settlement date.
Cash settlement contracts: Futures contracts, such as stock index futures, that settle for cash, not involving the delivery of the underlying.
Cash transaction: A transaction where exchange is immediate, as contrasted to a forward contract, which calls for future delivery of an asset at an agreed-upon price.
Cash-equivalent items: Temporary investments of currently excess cash in short-term, high-quality securities such as treasury bills and Banker's Acceptances.
Cash-surrender value: The amount an insurance company will pay if the policyholder ends a whole life insurance policy.
Cashout: Refers to a situation where a firm runs out of cash and cannot readily sell marketable securities.
CEDEL: A centralized clearing system for Eurobonds.
Certainty equivalent: An amount that would be accepted in lieu of a chance to receive a possibly higher, but uncertain, amount.
Certificate of deposit (C.D.): Also called a time deposit, this is a certificate issued by a bank or thrift that indicates a specified sum of money has been deposited. A C.D. bears a maturity date and a specified interest rate, and can be issued in any denomination. The duration can be up to five years.
C.F.A.T.: Cash flow after taxes.
Characteristic line: The market model applied to a single security. i.e. a regression of security returns or the benchmark return. The slope of the line is a security's beta.
Changes in Financial Position: Sources of funds internally provided from operations that alter a company's cash flow position: depreciation, deferred taxes, other sources, and capital expenditures.
Chartists: Related: technical analysts.

Cheapest to deliver issue: The acceptable Treasury security with the highest implied repo rate; the rate that a seller of a futures contract can earn by buying an issue and then delivering it at the settlement date.
Chicago Board Options Exchange (C.B.O.E.): A securities exchange created in the early 1970s for the public trading of standardized option contracts. Locale where the trading of stock options, foreign currency options, and index options (S&P 100, 500, and 0.T.C. 250 index) is predominant.
Chicago Mercantile Exchange (C.M.E.): A not-for-profit corporation owned by its members. Its primary functions are to provide a location for trading futures and options, collect and disseminate market information, maintain a clearing mechanism and enforce trading rules. Applies to derivative products. A locale where the trading of futures (O.T.C. 250 industrial stock price index, S& P 100 and 500 index) and futures options (S&P 500 stock index) is predominant.
Chinese hedge: Mainly applies to convertible securities. Trading hedge in which one is short the convertible and long the underlying common, hoping that the convertible's premium will contract. Antithesis of set up.
Chinese wall: Communication barrier between financiers (investment bankers) and traders. This barrier is erected to prevent the sharing of inside information that bankers are likely to have.
Choice market: Mainly applies to international equities. Locked market in London terminology.
Churning: Excessive trading of a client's account in order to increase the broker's commissions.
Circle: Underwriters, actual or potential, often seek out and "circle" investor interest in a new issue before final pricing. The customer circled basically made a commitment to purchase the issue if it comes at an agreed-upon price. If the actual price is other than that stipulated, the customer supposedly has first offer at the actual price.
Circus swap: A fixed rate currency swap against floating U.S. dollar L.I.B.O.R. payments.
Claim dilution: A reduction in the likelihood one or more of the firm's claimants will be fully repaid, including time value of money considerations.
Claimant: A party to an explicit or implicit contract.
Class: Applies to derivative products. Options of the same type - put or call - with the same underlying security. See: series.
Clean: Used in the context of general equities. Block trade that matches buy or sell orders/interests, sparing the block trader any inventory risk (no net position and hence none available for additional customers). Natural. Antithesis of open.

Clean opinion: An auditor's opinion reflecting an unqualified acceptance of a company's financial statements.
Clean price: Bond price excluding accrued interest.
Clean up: Used in the context of general equities. Purchase/sale of all the remaining supply/demand of/for stock, or the last piece of a block, in a trade -- leaving a net zero position.
"Clean your skirts": Used in the context of general equities. "Make all of your obligated calls "; checking with all prior obligations in a security. Often preceded by "subject to".
Clear: A trade is settled out by the seller delivering securities and the buyer delivering funds in proper form. A trade that does not clear is said to fail. Comparison of the details of a transaction between broker/dealers prior to settlement; final exchange of securities for cash on delivery.
Clear a position: To eliminate a long or short position, leaving no ownership or obligation.
Clearinghouse: An adjunct to a futures exchange through which transactions executed on its floor are settled by a process of matching purchases and sales. A clearing organization is also charged with the proper conduct of delivery procedures and the adequate financing of the entire operation.
Clearing House Automated Payments System (C.H.A.P.S.): A computerized clearing system for sterling funds that began operations in 1984. It includes 14 member banks, nearly 450 participating banks, and is one of the clearing companies within the structure of the Association for Payment Clearing Services (A.P.A.C.S.).
Clearing House Electronic Subregister System (C.H.E.S.S.): C.H.E.S.S. is the automatic transfer and settlement system for the majority of Australian Stock Exchange (A.S.X.) listed securities.
Clearing House Interbank Payments System (C.H.I.P.S.): An international wire transfer system for high-value payments operated by a group of major banks.
Clearing member: A member firm of a clearing house. Each clearing member must also be a member of the exchange. Not all members of the exchange, however, are members of the clearing organization. All trades of a non-clearing member must be registered with, and eventually settled through, a clearing member.
Clientele effect: The grouping of investors who have a preference that the firm follow a particular financing policy, such as the amount of leverage it uses.
Close a position: Used in the context of general equities. Eliminate an investment from one's portfolio, by either selling a long position or covering a short position.
Close, the: The period at the end of the trading session. Sometimes used to refer to closing price. Related: Opening, the.
Closed-end fund: An investment company that sells shares like any other corporation and usually does not redeem its shares. A publicly traded fund sold on stock exchanges or over the counter that may trade above or below its net asset value. Related: Open-end fund.
Closed-end mortgage: Mortgage against which no additional debt may be issued.
Closely held company: A company who has a small group of controling shareholders. In contrast, a widely-held firm has many shareholders. It is difficult or impossible to wage a proxy battle for any closely-held firm.
Closing purchase: A transaction in which the purchaser's intention is to reduce or eliminate a short position in a stock, or in a given series of options.
Closing range: Also known as the range. The high and low prices, or bids and offers, recorded during the period designated as the official close. Related: settlement price.
Closing sale: A transaction in which the seller's intention is to reduce or eliminate a long position in a stock, or a given series of options.
Closing transaction: Applies to derivative products. Buy or sell transaction that eliminates an existing position (selling a long option or buying back a short option).
Antithesis of opening transaction.
Cluster analysis: A statistical technique that identifies clusters of stocks whose returns are highly correlated within each cluster and relatively uncorrelated between clusters. Cluster analysis has identified groupings such as growth, cyclical, stable and energy stocks.
Coefficient of determination: A measure of the goodness of fit of the relationship between the dependent and independent variables in a regression analysis; for instance, the percentage of variation in the return of an asset explained by the market portfolio return. Also known as R-squared.
Coffee, Sugar & Cocoa Exchange (CS&CE): The New York-based commodity exchange trading futures and options on softs. The CS&CE shares the trading floor at the Commodities Exchange Center.

Coinsurance effect: Refers to the fact that the merger of two firms decreases the probability of default on either firm's debt.
Collar: An upper and lower limit on the interest rate on a floating-rate note (F.R.N.) or an adjustable rate mortgage (A.R.M.).
Collateral: Asset than can be repossessed if a borrower defaults.
Collateral trust bonds: A bond in which the issuer (often a holding company) grants investors a lien on stocks, notes, bonds, or other financial asset as security. Compare mortgage bond.
Collateralized mortgage obligation (C.M.O.): A security backed by a pool of pass-through rates , structured so that there are several classes of bondholders with varying maturities, called tranches. The principal payments from the underlying pool of pass-through securities are used to retire the bonds on a priority basis as specified in the prospectus. Related: mortgage pass-through security.
Collection float: The negative float that is created between the time when you deposit a check in your account and the time when funds are made available.
Collection fractions: The percentage of a given month's sales collected during the month of sale and each month following the month of sale.
Collection policy: Procedures followed by a firm in attempting to collect accounts receivables.
Collective wisdom: The combination of all of the individual opinions about a stock's or security's value.
Colt (Continuous on-line trading system): Computerized O.T.C. traders-assistance system that provides for trade entry and position monitoring, among other functions.
Comanger: A bank that ranks just below a lead manager in a syndicated Eurocredit or international bond issue. Comanagers may assist the lead manger bank in the pricing and issue of the instrument.
Combination: Applies to derivative products. Arrangement of options involving two long or two short positions with different expiration dates or strike (exercise) prices. See: straddle.
Combination matching: Also called horizon matching, a variation of multiperiod immunization and cash flow matching in which a portfolio is created that is always duration matched and also cash-matched in the first few years.
Combination strategy: A strategy in which a put and call with the same strike price and expiration are either both bought or both sold. Related: straddle
Come in: Used in the context of general equities. Fall in price.
Comeout, the: Used in the context of general equities. The opening. Antithesis of the Close.

Come out of the trade: Used in the context of general equities. Trader's resulting position in a security from executing a trade (or the expectations thereof). Antithesis of going into the trade.
COMEX: A division of the New York Mercantile Exchange (N.Y.M.E.X.). Formerly known as the Commodity Exchange, COMEX is the leading U.S. market for metals futures and options trading.
Commercial draft: Demand for payment.
Commercial paper: Short-term unsecured promissory notes issued by a corporation. The maturity of commercial paper is typically less than 270 days; the most common maturity range is 30 to 50 days or less.
Commercial risk: The risk that a foreign debtor will be unable to pay its debts because of business events, such as bankruptcy.
Commission: The fee paid to a broker to execute a trade, based on number of shares, bonds, options, and/or their dollar value. In 1975, deregulation led to the creation of discount brokers, who charge lower commissions than full service brokers. Full service brokers offer advice and usually have a full staff of analysts who follow specific industries. Discount brokers simply execute a client's order -- and usually do not offer an opinion on a stock. Also known as a round-turn.
Commission broker: A broker on the floor of an exchange who acts as agent for a particular brokerage house and buys and sells stocks for the brokerage house on a commission basis.
Commission house: A firm which buys and sells futures contracts for customer accounts. Related: futures commission merchant, omnibus account.
Commitment: A trader is said to have a commitment when he assumes the obligation to accept or make delivery on a futures contract. Related: Open interest.
Commitment fee: A fee paid to a commercial bank in return for its legal commitment to lend funds that have not yet been advanced. Often used in risk arbitrage. Payment to institutional investors in the U.K. (pension funds and life insurance companies) by the lead underwriter of a takeover that takes place when the underwriter provides the target company's shareholders with a cash alternative for a target company's shares in exchange for the bidding companies' shares. The payment is typically 0.5% for the first 30 days, 1.25% for each week thereafter and a final 0.75% acceptance payment when the takeover is completed.
Committee on Uniform Securities Identification Procedures (C.U.S.I.P.): Committee that assigns identifying numbers and codes for all securities. These "C.U.S.I.P." numbers and symbols are used when recording all buy or sell orders.
Commodities Exchange Center (C.E.C.): The location of five New York futures exchanges: Commodity Exchange, Inc. (COMEX), the New York Mercantile Exchange (NYMEX), the New York Cotton Exchange, the Coffee, Sugar and Cocoa Exchange (CSC), and the New York futures Exchange (NYFE).
Commodity: A commodity is food, metal, or another physical substance that investors buy or sell, usually via futures contracts.
Commodity Futures Trading Commission (C.F.T.C.): Applies to derivative products. Commodity futures trading commission is an agency created by Congress in 1974 to regulate exchange trading in futures.
Common-base-year analysis: The representing of accounting information over multiple years as percentages of amounts in an initial year.
Common code: A nine digit identification code issued jointly by CEDEL and Euroclear. As of January 1991 common codes replaced the earlier separate CEDEL and Euroclear codes.
Common market: An agreement between two or more countries that permits the free movement of capital and labor as well as goods and services.
Common shares: In general, there are two types of shares, common and preferred stock. The common shares usually entitle the shareholders to vote at shareholders meetings. The common shares have a discretionary dividend.
Common size statement: A statement in which all items are expressed as a percentage of a base figure, useful for purposes of analyzing trends and the changing relationship between financial statement items. For example, all items in each year's income statement could be presented as a percentage of net sales.
Common stock: These are securities that represent equity ownership in a company. Common shares let an investor vote on such matters as the election of directors. They also give the holder a share in a company's profits via dividend payments or the capital appreciation of the security. Used in the context of general equities.) units of ownership of a public corporation with junior status to the claims of secured/unsecured creditors, bond and preferred shareholders in the event of liquidation.
Common stock/other equity: Value of outstanding common shares at par, plus accumulated retained earnings. Also called shareholders' equity.
Common stock equivalent: A convertible security that is traded like an equity issue because the optioned common stock is trading high.
Common stock market: The market for trading equities, not including preferred stock.
Common stock ratios: Ratios that are designed to measure the relative claims of stockholders to earnings (cash flow per share), and equity (book value per share) of a firm.

Common-size analysis: The representing of balance sheet items as percentages of assets and of income statement items as percentages of sales.
Company-specific risk: Related: Unsystematic risk
Company, the: Used for listed equity securities and refers to over-the-counter trading. Public-traded corporation involved in the corporate repurchase of its shares.
Comparative credit analysis: A method of analysis in which a firm is compared to others that have a desired target debt rating in order to infer an appropriate financial ratio target.
Comparison universe: The collection of money managers of similar investment style used for assessing relative performance of a portfolio manager.
Compensating balance: An excess balance that is left in a bank to provide indirect compensation for loans extended or services provided.
Competence: Sufficient ability or fitness for ones needs. Possessing the necessary abilities to be qualified to achieve a certain goal or complete a project.
Competition: Intra- or intermarket rivalry between businesses trying to obtain a larger piece of the same market share.
Competition ahead: Often used in risk arbitrage. Situation whereby another O.T.C. market-maker has transacted with Investment bank at the stated market level (without being faded) before the present bid/offer has been made. For example, if bear steams hits a Investment bank bid and we subsequently go down an eighth, followed by an offering being received by Investment bank at this previously transacted price, "Competition was ahead"of Investment banks.
Competitive bidding: A securities offering process in which securities firms submit competing bids to the issuer for the securities the issuer wishes to sell.
Competitive offering: An offering of securities through competitive bidding.
Complete: Used in the context of general equities. Fill.
Complete capital market: A market in which there is a distinct marketable security for each and every possible outcome.
Complete portfolio: The entire portfolio, including risky and risk-free assets.
Completion bonding: Insurance that a construction contract will be successfully completed.
Completion risk: The risk that a project will not be brought into operation successfully.
Completion undertaking: An undertaking either (1) to complete a project such that it meets certain specified performance criteria on or before a certain specified date or (2) to repay project debt if the completion test cannot be met.
Composition: Voluntary arrangement to restructure a firm's debt, under which payment is reduced.
Compound interest: Interest paid on previously earned interest as well as on the principal.
Compound option: Option on an option.
Compounding: The process of accumulating the time value of money forward in time. For example, interest earned in one period earns additional interest during each subsequent time period.
Compounding frequency: The number of compounding periods in a year. For example, quarterly compounding has a compounding frequency of 4.
Compounding period: The length of the time period (for example, a quarter in the case of quarterly compounding) that elapses before interest compounds.
Comprehensive due diligence investigation: The investigation of a firm's business in conjunction with a securities offering to determine whether the firm's business and financial situation and its prospects are adequately disclosed in the prospectus for the offering.
Concentration account: A single centralized account into which funds collected at regional locations (lockboxes) are transferred.
Concentration services: Movement of cash from different lockbox locations into a single concentration account from which disbursements and investments are made.
Concession agreement: An understanding between a company and the host government that specifies the rules under which the company can operate locally.
Conditional call: Mainly applies to convertible securities. Circumstances under which a company can effect an earlier call, usually stated as percentage of a stock's trading price during a particular period, such as 140% of the exercise price during a 40-day trading span.
Conditional sales contracts: Similar to equipment trust certificates except that the lender is either the equipment manufacturer or a bank or finance company to whom the manufacturer has sold the conditional sales contract.
Condor: Applies to derivative products. Option strategy consisting of both puts and calls at different strike prices that capitalizes on a narrow range of volatility. The payoff diagram takes the shape of a bird.
Confidence indicator: A measure of investors' faith in the economy and the securities market. A low or deteriorating level of confidence is considered by many technical analysts as a bearish sign.
Confidence letter: Often used in risk arbitrage. Statement by an investment bank that it is highly confident that the financing for its client/acquirer's takeover can and will be obtained.
Confidence level: The degree of assurance that a specified failure rate is not exceeded.
Confirmation: The written statement that follows any "trade" in the securities markets. Confirmation is issued immediately after a trade is executed. It spells out settlement date, terms, commission, etc.
"Confirm me out": Used for listed equity securities. "Go to the floor and check with the specialist or floor broker that my previously active order has been cancelled and was not executed". One does not have to honor any trade reported after given a "firm out".
Conflict between bondholders and stockholders: These two groups may have interests in a corporation that conflict. Sources of conflict include dividends, distortion of investment, and underinvestment. Protective covenants work to resolve these conflicts.
Conglomerate: A firm engaged in two or more unrelated businesses.
Conglomerate merger: A merger involving two or more firms that are in unrelated businesses.
Consensus forecast: The mean of all financial analysts' forecasts for a company.
Consol: A government bond with no maturity . Popular in Great Britain. The formula for valuing these bonds is simple. The consol payment divided by yield to maturity is the price of the bond.
Consolidated tape: Used for listed equity securities. Combined ticker tapes of the N.Y.S.E. and the curb. Network A covers the N.Y.S.E.-listed securities and is used to identify the originating market. Network B does the same for AMEX-listed securities and also reports on securities listed on regional stock exchanges. See tape.
Consolidation: The combining of two or more firms to form an entirely new entity.
Consortium banks: A merchant banking subsidiary set up by several banks that may or may not be of the same nationality. Consortium banks are common in the Euromarket and are active in loan syndication.
Constant-growth model: Also called the Gordon-Shapiro model, an application of the dividend discount model which assumes (1) a fixed growth rate for future dividends and (2) a single discount rate.
Consumer credit: Credit granted by a firm to consumers for the purchase of goods or services. Also called retail credit.
Consumer Price Index: The CPI, as it is called, measures the prices of consumer goods and services and is a measure of the pace of U.S. inflation. The U.S.Department of Labor publishes the CPI very month.
Contagion: Excess correlation of equity or bond returns. For example, under usual conditions we might observe a certain level of correlation of market returns. A period of contagion would be associated with much higher than expected correlation. Some examples might be the conjectured contagion in East Asian markets beginning in July 1997 when the Thai currency devalued or the impact across many emerging markets to the Russian default. Contagion is difficult to identify because you need some sort of measure of the expected correlation. It is complicated because correlations are known to change through time, for example, see Erb, Harvey and Viskanta's article in the 1994 Financial Analysts Journal. In periods of negative returns, correlations (and volatility) is known to increase. So what might appear to be excessive may not be contagion.
Contango: A market condition in which futures prices are higher in the distant delivery months.
Contingency order: Used in the context of general equities. Order to buy one security, if the trader can sell another, usually given that certain price limits or conditions reach a certain level. Swap, switch order.

Contingent claim: A claim that can be made only if one or more specified outcomes occur.
Contingent deferred sales charge (CDSC): The formal name for the load of a back-end load fund.
Contingent immunization: An arrangement in which the money manager pursues an active bond portfolio strategy until an adverse investment experience drives the then-available potential return down to the safety-net level. When that point is reached, the money manager is obligated to pursue an immunization strategy to lock in the safety-net level return.

Contingent pension liability: Under ERISA, the firm is liable to the plan participants for up to 39% of the net worth of the firm.
Continuous compounding: The process of accumulating the time value of money forward in time on a continuous, or instantaneous, basis. Interest is earned continuously, and at each instant, the interest that accrues immediately begins earning interest on itself.
Continuous random variable: A random value that can take any fractional value within specified ranges, as contrasted with a discrete variable.
Contract: A term of reference describing a unit of trading for a financial or commodity future. Also, the actual bilateral agreement between the buyer and seller of a transaction as defined by an exchange.
Contract month: The month in which futures contracts may be satisfied by making or accepting a delivery. Also called value managers, those who assemble portfolios with relatively lower betas, lower price-book and P/E ratios and higher dividend yields, seeing value where others do not.
Contramarket stock: Used in the context of general equities. Stock that will fight the grain/trend of the market as whole, such as a commodities-related stock or one in an industry out of favor with investors in a bull market.
Contribution margin: The difference between variable revenue and variable cost.
Control: 50% of the outstanding votes plus one vote.
Controlled disbursement: A service that provides for a single presentation of checks each day (typically in the early part of the day).
Controlled foreign corporation (C.F.C.): A foreign corporation whose voting stock is more than 50% owned by U.S. stockholders, each of whom owns at least 10% of the voting power.
Controller: The corporate manager responsible for the firm's accounting activities.
Convenience yield: The extra advantage that firms derive from holding the commodity rather than the future.
Convention statement: An annual statement filed by a life insurance company in each state where it does business in compliance with that state's regulations. The statement and supporting documents show, among other things, the assets, liabilities, and surplus of the reporting company.
Conventional mortgage: A loan based on the credit of the borrower and on the collateral for the mortgage.
Conventional pass-throughs: Also called private-label pass-throughs, any mortgage pass-through security not guaranteed by government agencies. Compare agency pass-throughs.
Conventional project: A project with a negative initial cash flow (cash outflow), which is expected to be followed by one or more future positive cash flows (cash inflows).
Convergence: The movement of the price of a futures contract toward the price of the underlying cash commodity. At the start, the contract price is higher because of time value. But as the contract nears expiration, and time value decreases, the futures price and the cash price converge.
Conversion factors: Rules set by the Chicago Board of Trade for determining the invoice price of each acceptable deliverable Treasury issue against the Treasury Bond futures contract.

Conversion parity price: Related: Market conversion price.
Conversion parity/value: Mainly applies to convertible securities. Common stock price at which a convertible bond can become exchangeable for common shares of equal value; value of a convertible bond based solely on the market value of the underlying equity. Par value + conversion ratio. See bond value, investment value, parity.
Conversion premium: The percentage by which the conversion price of a convertible security exceeds the prevailing common stock price at the time the convertible security is issued.
Conversion price: Mainly applies to convertible securities. Dollar value at which convertible bonds, debentures, or preferred stock can be converted into common stock, as announced when the convertible is issued.
Conversion ratio: Mainly applies to convertible securities. Relationship that determines how many shares of common stock will be received in exchange for each convertible bond or preferred share when the conversion takes place. It is determined at the time of issue and is expressed either as a ratio or as a conversion price from which the ratio can be figured by dividing the par value of the convertible by the conversion price.
Conversion value: Also called parity value, the value of a convertible security if it is converted immediately.
Convertibility: The degree of freedom to exchange a currency without government restrictions or controls.
Convertible arbitrage: Mainly applies to convertible securities. A practice, usually of buying a convertible bond and shorting a percentage of the equivalent underlying common shares to create a positive cash flow position (with expected returns above the riskless rate) in a static environment and capital appreciation should the convertible's premium expand. This form of investing is far from riskless and requires constant monitoring. See: Chinese hedge and set up.
Convertible bond: Mainly applies to convertible securities. General debt obligation of a corporation which can be exchanged for a set number of common shares of the issuing corporation at a prestated conversion price.
Convertible eurobond: A eurobond that can be converted into another asset, often through exercise of attached warrants.
Convertible exchangeable preferred stock: Convertible preferred stockthat may be exchanged, at the issuer's option, into convertible bonds that have the same conversion features as the convertible preferred stock.
Convertible 100: Mainly applies to convertible securities. Goldman Sachs index of the 100 convertibles of greatest institutional importance. Weighted by issue size, it measures the performance of its components against that of their underlying common stock and against other broad market indices as well.
Convertible preferred: Mainly applies to convertible securities. Similar to convertible bond except represents equity in the corporation. Divided income is not a pre-tax income item for the issuing corporation, but holding institutions are entitled to an 85% exclusion of dividends.
Convertible price: The contractually specified price per share at which a convertible security can be converted into shares of common stock.
Convertible preferred stock: Preferred stock that can be converted into common stock at the option of the holder.
Convertible security: A security that can be converted into common stock at the option of the security holder, includes convertible bonds and convertible preferred stock.
"Converts": Mainly applies to convertible securities. System that permits monitoring of the convertibles marketplace through a personal computer.
Convex: Bowed, as in the shape of a curve. Usually referring to the price/required yield relationship for option-free bonds.
Convexity: A convex curve is one where you draw a straight line connecting the end points and the curve falls below the straight line. If the curve is above, it is known as concave.
Core competency: Primary area of competence. Narrowly defined fields or tasks at which a company or business excels. Primary areas of specialty.
Cornering the market: Used in the context of general equities. (illegal) Purchasing a security or commodity in such volume that control over its price is achieved (e.g., Unhappy news for a short seller, who would have to pay an inflated price to cover).
Corporate acquisition: The acquisition of one firm by another firm.
Corporate bonds: Debt obligations issued by corporations.
Corporate charter: A legal document creating a corporation.
Corporate finance: One of the three areas of the discipline of finance. It deals with the
operation of the firm (both the investment decision and the financing decision) from that firm's point of view.
Corporate financial management: The application of financial principals within a corporation to create and maintain value through decision making and proper resource management.
Corporate financial planning: Financial planning conducted by a firm that encompasses preparation of both long-and short-term financial plans.
Corporate processing float: The time that elapses between receipt of payment from a customer and the depositing of the customer's check in the firm's bank account; the time required to process customer payments.
Corporate repurchase: Used in the context of general equities. Active buying by a corporation of its own stock in the marketplace. Reasons for doing so include putting unused cash to use, raising E.P.S., creating support for their stock price, increasing internal control (shark repellant), stock for E.S.O.P. or pension plans. Subject to rules, such as that buying must be on a zero minus or a minus tick, after the opening and before 3:30 p.m.
Corporate tax view: The argument that double (corporate and individual) taxation of equity returns makes debt a cheaper financing method.
Corporate taxable equivalent: Rate of return required on a par bond to produce the same after-tax yield to maturity that the quoted premium or discount bond would generate.
Corporation: A legal "person" that is separate and distinct from its owners. A corporation is allowed to own assets, incur liabilities, and sell securities, among other things.
Correction: Used in the context of general equities. Reverse movement, usually downward, in the price of an individual stock, bond, commodity, or index. If prices have been rising on the market as a whole, then fall dramatically, this is know as a correction within an upward trend. Antithesis of a technical rally. See: dip, break.
Correlation: Applies to derivative products. Statistical measure of the degree to which the movements of two variables (stock/option/convertible prices or returns) are related. See: Correlation coefficient.
Correlation coefficient: A standardized statistical measure of the dependence of two random variables, defined as the covariance divided by the standard deviations of two variables.
Cost-benefit ratio: The net present value of an investment divided by the investment's initial cost. Also called the profitability index.
Cost company arrangement: Arrangement whereby the shareholders of a project receive output free of charge but agree to pay all operating and financing charges of the project.
Cost of capital: The required return for a capital budgeting project.
Cost of carry: Used in the context of general equities. Out-of-pocket costs incurred while an investor has an investment position, examples include interest on long positions in margin account, dividend lost on short margin positions, and
incidental expenses. Related: Net financing cost.
Cost-of-carry market: Applies to derivative products. Futures contracts trade in a "cost-of-carry market" when the underlying commodity can be stored, insured, and converted into the future easily and inexpensively. Arbitrageurs, because of the ease of switching from the spot commodity to futures, will keep these markets in line with prevailing interest rates.
Cost of equity: The required rate of return for an investment of 100% equity.
Cost of funds: Interest rate associated with borrowing money.
Cost of lease financing: A lease's internal rate of return.
Cost of limited partner capital: The discount rate that equates the after-tax inflows with outflows for capital raised from limited partners.
"cost me": Refers to over-the-counter trading. "The price I must pay to obtain the securities you wish to buy is [$]" usually, a standard markup (1/8) is then applied for resale to this buyer. Antithesis of can get.
Counter trade: The exchange of goods for other goods rather than for cash; barter.
Counterpart items: In the balance of payments, counterpart items are analogous to unrequited transfers in the current account. They arise because the double-entry system in balance of payments accounting and refer to adjustments in reserves owing to monetization or demonetization of gold, allocation or cancellation of SDRs, and revaluation of the various components of total reserves.
Counterparties: The parties to an interest rate swap.
Counterparty: Party on the other side of a trade or transaction.
Counterparty risk: The risk that the other party to an agreement will default. In an options contract, the risk to the option buyer that the option writer will not buy or sell the underlying as agreed.
Country economic risk: Developments in a national economy that can affect the outcome of an international financial transaction.
Country beta: Covariance of a national economy's rate of return and the rate of return the world economy divided by the variance of the world economy.
Country financial risk: Centers around the ability of a national economy to generate enough foreign exchange to meet payments of interest and principal on its foreign debt.

Country risk: General level of political, financial and economic uncertainty in a country affecting the value of loans or investments in that country.
Country selection: A type of active international management that measures the contribution to performance attributable to investing in the better-performing stock markets of the world.
Coupon: The periodic interest payment made to the bondholders during the life of the bond.
Coupon equivalent yield: True interest cost expressed on the basis of a 365-day year.
Coupon payments: A bond's interest payments.
Coupon rate: In bonds, notes or other fixed income securities, the stated percentage rate of interest, usually paid twice a year.
Covariance: A statistical measure of the degree to which random variables move together. A positive covariance implies that one variable is above (below) its mean value when the other variable is above (below) its mean value.
Covenants: Provisions in a bond indenture or preferred stock agreement that require the bond or preferred stock issuer to take certain specified actions (affirmative covenants) or to refrain from taking certain specified actions (negative covenants).
Cover: The purchase of a contract to offset a previously established short position.
Covered option: Applies to derivative products. Option position that is offset by an equal and opposite position in the underlying security. Antithesis of naked option.
Coverage initiated: Usually refers to the fact that analysts begin following a particular security. This usually happens when a security become sufficiently large to warrant attention by the investment community.
Coverage ratios: Ratios used to test the adequacy of cash flows generated through earnings for purposes of meeting debt and lease obligations, including the interest coverage ratio and the fixed charge coverage ratio.
Covered call: A short call option position in which the writer owns the number of shares of the underlying stock represented by the option contracts. Covered calls generally limit the risk the writer takes because the stock does not have to be bought at the market price, if the holder of that option decides to exercise it.
Covered call writing strategy: A strategy that involves writing a call option on securities that the investor owns in his or her portfolio. See: covered or hedge option strategies.
Covered interest arbitrage: A portfolio manager invests dollars in an instrument denominated in a foreign currency and hedges his resulting foreign exchange risk by selling the proceeds of the investment forward for dollars.
Covered or hedge option strategies: Strategies that involve a position in an option as well as a position in the underlying stock, designed so that one position will help offset any unfavorable price movement in the other, including covered call writing and protective put buying. Related: naked strategies
Covered Put: A put option position in which the option writer also is short the corresponding stock or has deposited, in a cash account, cash or cash equivalents equal to the exercise of the option. This limits the optionwriter's risk because money or stock is already set aside. In the event that the holder of the put option decides to exercise the option, the writer's risk is more limited than it would be on an uncovered or naked put option.
Cramdown: The ability of the bankruptcy court to confirm a plan of reorganization over the objections of some classes of creditors.
Crash: Dramatic loss in market value. The last great crash was in 1929. Some refer to October 1987 as a crash but the market return was positive.

Crawling peg: An automatic system for revising the exchange rate. It involves establishing a par value around which the rate can vary up to a given percent. The par value is revised regularly according to a formula determined by the authorities.

Credible signal: A signal that provides accurate information; a signal that can be distinguish among senders.
Credit: Money loaned.
Credit analysis: The process of analyzing information on companies and bond issues in order to estimate the ability of the issuer to live up to its future contractual obligations. Related: default risk
Credit enhancement: Purchase of the financial guarantee of a large insurance company to raise funds.
Credit period: The length of time for which the customer is granted credit.
Credit risk: The risk that an issuer of debt securities or a borrower may default on his obligations, or that the payment may not be made on a negotiable instrument. Related: Default risk
Credit scoring: A statistical technique wherein several financial characteristics are combined to form a single score to represent a customer's credit worthiness.
Credit spread: Applies to derivative products. Difference in the value of two options, when the value of the one sold exceeds the value of the one bought. One sells a "credit spread". Antithesis of a debit spread Related: Quality spread.
Crediting rate: The interest rate offered on an investment type insurance policy.
Creditor: Lender of money.
CREST: CREST is CrestCo's real-time settlement system for UK and Irish shares and other corporate securities. From 1999, CrestCo will also take ownership of government bond and money markets settlement in the UK.
Cross: Used for listed equity securities. Securities transaction in which the same broker acts as agent for both sides of the trade; a legal practice only if the broker first offers the securities publicly at a price higher than the bid.
Cross-border risk: Refers to the volatility of returns on international investments caused by events associated with a particular country as opposed to events associated solely with a particular economic or financial agent.
Cross default: A provision under which default on one debt obligation triggers default on another debt obligation.
Crossed market: Used in the context of general equities. Market condition whereby the inside market consists of a highest bid price that is higher than the lowest offer price. See: Overlap the market
Cross hedging: The practice of hedging with a futures contract that is different from the underlying being hedged. Applies to derivative products. Use of a hedging instrument different from the security being hedged. Hedging instruments are usually selected with the highest price correlation to the underlying.
Cross holdings: One corporation holds shares in another firm. One needs to allow for cross holdings when aggregating capitalizations of firms. Ignoring cross holdings leads to double counting
Crossover rate: The return at which two alternative projects have the same net present value.
Cross rates: The exchange rate between two currencies expressed as the ratio of two foreign exchange rates that are both expressed in terms of a third currency. Mainly applies to international equities. Foreign exchange rate between two currencies other than the U.S. Dollar, the currency into which most currencies are usually quoted.
Cross-sectional approach: A statistical methodology applied to a set of firms at a particular point in time.
Cross-share holdings: Often used in risk arbitrage. Corporations' or governments' equity share ownership in another corporation's shares.
Crowd trading: Used for listed equity securities. Group of exchange members with a defined area of function tending to congregate around a trading post pending execution of orders. Includes specialists, floor traders, odd-lot dealers, and other brokers as well as smaller groups with specialized functions. See: priority.
Crown jewel: A particularly profitable or otherwise particularly valuable corporate unit or asset of a firm. Often used in risk arbitrage. The most desirable entities within a diversified corporation as measured by asset value, earning power and business prospects; in takeover attempts, they typically are the main objective of the acquirer and may be sold by a takeover target to make the rest of the company less attractive. See scorched earth policy.
Cum dividend: With dividend. Used in the context of general equities. With dividend; said of a stock whose buyer is eligible to receive a declared dividend. Stocks are usually "cum dividend" for trades made on or before the fifth trading day preceding the record date, when the register of eligible holders is closed for that dividend period. Antithesis of ex-dividend.
Cum rights: With rights.
Cumulative abnormal return (C.A.R.): Sum of the differences between the expected return on a stock and the actual return that comes from the release of news to the market.
Cumulative dividend feature: A requirement that any missed preferred or preference stock dividends be paid in full before any common dividend payment is made.
Cumulative preferred stock: Preferred stock whose dividends accrue, should the issuer not make timely dividend payments. Related: Non-cumulative preferred stock.
Cumulative probability distribution: A function that shows the probability that the random variable will attain a value less than or equal to each value that the random variable can take on.
Cumulative Translation Adjustment (C.T.A.) account: An entry in a translated balance sheet in which gains and/or losses from translation have been accumulated over a period of years. The C.T.A. account is required under the FASB No. 52 rule.
Cumulative voting: A system of voting for directors of a corporation in which shareholder's total number of votes is equal to his number of shares held times the number of candidates.
Curb, the: Used for listed equity securities. American Stock Exchange (A.M.E.X.).
Currency: Money.
Currency arbitrage: Taking advantage of divergences in exchange rates in different money markets by buying a currency in one market and selling it in another market.
Currency basket: The value of a portfolio of specific amounts of individual currencies, used as the basis for setting the market value of another currency. It is also referred to as a currency cocktail.
Currency future: A financial future contract for the delivery of a specified foreign currency.
Currency hedge: Mainly applies to international equities. Hedging technique to guard against foreign exchange fluctuations (i.e., short Euro l00 mm when holding a long position of Euro l00 mm in stocks).
Currency option: An option to buy or sell a foreign currency.
Currency overvaluation: Mainly applies to international equities. 1) Consideration that a currency is overvalued if private demand for the currency at the going exchange rate is less than total private supply (i.e., Central banks are buying up the difference, supporting the value of the currency through foreign exchange intervention); 2) Currency value exceeding purchasing power parity.
Currency risk: Related: Exchange rate risk
Currency risk sharing: An agreement by the parties to a transaction to share the currency risk associated with the transaction. The arrangement involves a customized hedge contract embedded in the underlying transaction.
Currency selection: Asset allocation in which the investor chooses among investments denominated in different currencies.
Currency swap: An agreement to swap a series of specified payment obligations denominated in one currency for a series of specified payment obligations denominated in a different currency.
Current account: Net flow of goods, services, and unilateral transactions (gifts) between countries.
Current assets: Value of cash, accounts receivable, inventories, marketable securities and other assets that could be converted to cash in less than 1 year.
Current coupon: A bond selling at or close to par, that is, a bond with a coupon close to the yields currently offered on new bonds of a similar maturity and credit risk.
Current liabilities: Amount owed for salaries, interest, accounts payable and other debts due within 1 year.
Current issue: In Treasury securities, the most recently auctioned issue. Trading is more active in current issues than in off-the-run issues.
Current maturity: Current time to maturity on an outstanding debt instrument.
Current/noncurrent method: Under this currency translation method, all of a foreign subsidiary's current assets and liabilities are translated into home currency at the current exchange rate while noncurrent assets and liabilities are translated at the historical exchange rate that is, the rate in effect at the time the asset was acquired or the liability incurred.
Current rate method: Under this currency translation method, all foreign currency balance-sheet and income statement items are translated at the current exchange rate.
Current ratio: Indicator of short-term debt paying ability. Determined by dividing current assets by current liabilities. The higher the ratio, the more liquid the company.
Current yield: For bonds or notes, the coupon rate divided by the market price of the bond.
Current-coupon issues: Related: Benchmark issues
Cushion bonds: High-coupon bonds that sell at only at a moderate premium because they are callable at a price below that at which a comparable non-callable bond would sell. Cushion bonds offer considerable downside protection in a falling market.
Custodial fees: Fees charged by an institution that holds securities in safekeeping for an investor.
Custodian bank: Mainly applies to international equities. Bank or other financial institution that keeps custody of stock certificates and other assets of a mutual fund, individual, or corporate client. See: Depository Trust Company (D.T.C.)
Customary payout ratios: A range of payout ratios that is typical based on an analysis of comparable firms.
"Customer picking prices": Used in the context of general equities.
General: Customer is firm on price and has set the price(s) at which he wishes to transact the security. Thus, the trader is not attempting to "properly" price the trade or get one side a better price.
Missing a print: "Customer has asked us to"print to satisfy " because he has missed a print."
O.T.C.: "Stock is trading away due to a customer asking for better prices."
Swap: "Customer has selected the prices to be used in executing a swap."
Customized benchmarks: A benchmark that is designed to meet a client's requirements and long-term objectives.
Customs union: An agreement by two or more countries to erect a common external tariff and to abolish restrictions on trade among members.
Cyclical stock: Used in the context of general equities. Stock that tends to rise quickly when the economy turns up and fall quickly when the economy turns down. Examples are housing, automobiles, and paper.

Glossary created by Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University.