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- Waiting
period
- Time during which the Securities
and Exchange Commission (S.E.C.) studies a firm's registration statement. During this time the
firm may distribute a preliminary prospectus.
Walk away - Used for listed equity securities. To take and
maintain a position in a stock
after going to the floor to consummate a trade. Antithesis
of trade me out, buy them back.
Wall Street - Generic term for firms that buy, sell, and underwrite securities.
Wall Street analyst - Related: Sell-side
analyst.
Wallflower - Stock that has
fallen out of favor with investors; tends to have a low
P/E (price to earnings ratio).
Wanted for cash - A statement displayed on market tickers indicating that a bidder will pay cash for same day settlement of a block of a
specified security.
Warehouse receipt - Evidence that a firm
owns goods stored in a warehouse.
-
- Warehousing
- The interim holding
period from the time of the closing of a loan to its
subsequent marketing to capital market investors.
Warrant - A security
entitling the holder to buy a proportionate amount of stock at some specified future date at a specified price,
usually one higher than current market. This
"warrant" is then traded as a security, the
price of which reflects the value of the underlying
stock. Warrants are issued by corporations and often
used as a "sweetener" bundled with
another class of security to enhance the marketability of
the latter. Warrants are like call options, but with
much longer time spans -- sometimes years. In addition, warrants are offered by corporations whereas exchange traded call options are not issued by firms.
Wash - Gains equal losses.
Wash sale - Used in the context of general equities. Purchase
and sale of a security either simultaneously or within
a short period of time, often done with the intention of recognizing a tax loss without
altering one's position. See: tax selling.
Wasting asset - An asset which has
a limited life and thus, decreases in value (depreciates)
over time. Also applies to consumed assets, such as gas, and termed "depletion."
Watch list - A list of securities
selected for special surveillance by a brokerage, exchange
or regulatory organization; firms on the list are often takeover
targets, companies planning to issue new securities or stocks showing unusual activity.
Weak form efficiency - A form of pricing
efficiency where the price of the security reflects
the past price and trading history of the security. In such a market,
security prices follow a random walk. Related: Semistrong form efficiency, strong form efficiency.
Weekend effect - The common recurrent low or negative average return from Friday to Monday in the stock market.
Weighted average cost of
capital (W.A.C.C.) - Expected
return on a portfolio of all the firm's securities. Used as a hurdle rate for capital investment. Often the weighted
average of the cost of equity and the cost of debt The weights are determined by the relative proportions of
equity and debt in a
firm's capital structure.
Weighted average coupon
- The weighted average of the gross interest rates of the mortgages underlying the pool as of the pool issue date, with the balance of each mortgage used as the
weighting factor.
Weighted average life
- See: Average
life.
Weighted average maturity
- The weighted average maturity of a M.B.S. is the weighted average of the
remaining terms to maturity of the mortgages underlying the collateral
pool at the date issue, using as the weighting factor
the balance of each of the mortgages as of the issue date.
Weighted average
portfolio yield - The weighted average
of the yield of all the bonds
in a portfolio.
Weighted average
remaining maturity - The average remaining term of the mortgages underlying a M.B.S..
Well diversified portfolio
- A portfolio
spread out over many securities in such a way that the
weight of any security is small. The risk of a well-diversified portfolio closely
approximates the systemic risk of the overall market, the unsystematic
risk of each security having been diversified out of the portfolio.
When distributed - Used in the context of general equities. When issued.
When issued (W.I.) - Used in the context of general equities. When, as
if issued: refers to a transaction made conditionally
because a security, although authorized, has not yet
been issued. Treasury securities, new issues of stocks and
bonds, stocks that have split, and in-merger situations after the time the proxy has become
effective but before completion, are all traded on a when
issued basis. With ice.
White knight - A friendly potential acquirer
sought out by a target firm that is threatened by a
less welcome suitor.
White squire - Often used in risk arbitrage. White knight who buys
less than a majority interest.
Whole life insurance - A contract with
both insurance and investment components: (1) It pays off a stated amount upon the death
of the insured, and (2) it accumulates a cash value that the policyholder can redeem or
borrow against.
Wholesale mortgage banking
- The purchasing of loans originated by others, with
the servicing rights released to the buyer.
Wide opening - Used in the context of general equities. Abnormally
large spread between the bid
and asked prices of a security
at the opening of a trading session.
Wild card option - The right of the seller of a Treasury Bond futures
contract to give notice of intent to deliver at or before 8:00 p.m. Chicago time after
the closing of the exchange (3:15 p.m. Chicago time)
when the futures settlement
price has been fixed. Related: Timing option.
Williams Act - Often used in risk arbitrage. Federal legislation
enacted in 1968 (and now comprises Rules 13d and 14d of the Security Exchange Act of 1934) that imposes
requirements with respect to public tender offers.
Window contract - A guaranteed investment contract purchased with deposits over some future
designated time period (the "window"), usually between 3 and 12 months. All
deposits made are guaranteed the same credit rating. Related: bullet contract.
Window dressing - Used in the context of general equities. Trading
activity near the end of a quarter or fiscal year that is designed to dress up a portfolio to be presented to clients or shareholders. For example, a portfolio manager may sell losing positions in his portfolio so he can display only
positions that have gained in value.
Winners's curse - Problem faced by uninformed bidders. For example,
in an initial public offering uninformed
participants are likely to receive larger allotments of issues
that informed participants know are overpriced.
Wire house - A firm operating a private wire to its own branch
offices or to other firms, commission houses or
brokerage houses.
With dividend - Purchase of shares
in which the buyer is entitled to the forthcoming dividend. Related: ex-dividend.
With ice - Used in the context of general equities. When issued.
With rights - Purchase of shares
in which the buyer is entitled to the right to buy shares in the company's rights issue.
Withdrawal plan - The ability to establish automatic periodic mutual fund redemptions and have proceeds mailed
directly to the investor.
Withholding tax - A tax levied by a country of source on income paid,
usually on dividends remitted to the home country of
the firm operating in a foreign country. Tax levied on dividends paid abroad.
Without - If 70 were bid in the
market and there was no offer,
the quote would be "70 bid without." The expression "without"
indicates a one-way market.
Without recourse - Without the lender
having any right to seek payment or seize assets in the
event of nonpayment from anyone other than the party (such as a special-purpose entity)
specified in the debt contract.
Wi wi - Treasury bills trade
on a W.I. basis between the day they are auctioned and the
day settlement is made. Bills traded before they are auctioned are said to be traded Wi
wi.
Woody - Sexual slang for a market
moving strongly upward, as in, "This market has a woody."
Working - Used in the context of general equities. Attempting
to complete the remaining part of a trade, by finding
either buyers or sellers for the rest.
Working away - Used in the context of general equities.
Transacting an order with another broker/dealer.
Working capital - Defined as the difference between current assets and current liabilities (excluding short-term debt). Current assets may or may not include cash and cash equivalents, depending on the company.
Working capital management
- The management of current assets and current liabilities to maximize short-term
liquidity.
Working capital ratio
- Working capital expressed as a percentage of sales.
Working order - Used in the context of general equities. Order that exists in the marketplace, whereby a broker is bidding or offering to fill the order in a series of lots at opportune times in hope of obtaining the best price.
Workout - Informal arrangement between a borrower and creditors.
Workout market - Used in the context of general equities. Market which represents an indication
of prices at which it is believed a security can be
bought or sold within a reasonable length of time.
Workout period - Realignment period of a temporarily misaligned yield relationship that sometimes occurs in fixed income markets.
World Bank - A multilateral development finance agency created
by the 1944 Bretton Woods, New Hampshire
negotiations. It makes loans to developing countries for social overhead capital projects,
which are guaranteed by the recipient country. See: International
Bank for Reconstruction and Development.
World Equity Benchmark
Series (W.E.B.S.) - The World Equity Benchmark Series are similar to SPDRs. W.E.B.S. trade on the AMEX, and track the Morgan Stanley Capital
International (MSCI) country indexes. W.E.B.S. are available for these countries:
Australia, Austria, Belgium, Canada, France, Germany, Hong Kong, Italy, Japan, Malaysia
Free, Mexico, Netherlands, Singapore, Spain, Sweden, Switzerland, and United Kingdom.
World investible wealth
- The part of world wealth that is traded and is therefore accessible to investors.
Write - Applies to derivative products. Sell an option.
Write-down - Decreasing the book
value of an asset if its book value is overstated compared to current market values.
Writer - The seller of an option,
usually an individual, bank, or company, that issues the option and consequently has the obligation to sell the asset
(if a call) or to buy the
asset (if a put) on which the option is written if the
option buyer exercises the option.
W-type bottom - A double bottom where the price or indicator chart
has the appearance of a W. See: technical
analysis.
Glossary created by Campbell R. Harvey, Professor of Finance, Fuqua
School of Business at Duke University. |
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