![]() |
|
Financial Terms | |
Position |
Information about financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit.
Main Page: business, stock trading, payroll, financial advisor, accounting, financial, inventory control, money, |
Definition of PositionPositionA market commitment; the number of contracts bought or sold for which no offsetting transaction
Related Terms:Changes in Financial PositionSources of funds internally provided from operations that alter a company's Clear a positionTo eliminate a long or short position, leaving no ownership or obligation. CompositionVoluntary arrangement to restructure a firm's debt, under which payment is reduced. Deemed DispositionUnder certain circumstances, taxation rules assume that a transfer of property has occurred, even though there has not been an actual purchase or sale. This could happen upon death or transfer of ownership. Fallacy of CompositionThe incorrect conclusion that something that is true for an individual is necessarily true for the economy as a whole. Financial PositionStatus of a firm's assets, liabilities, and equity accounts as of a certain time, as shown in its financial statement. Limitation on asset dispositionsA bond covenant that restricts in some way a firm's ability to sell major assets. ![]() Long positionAn options position where a person has executed one or more option trades where the net Long positionOutright ownership of a security or financial instrument. The long positionPurchase of an investment. MM dividend-irrelevance propositionTheory that under ideal conditions, the value of the firm is unaffected by dividend policy. MM's proposition I (debt irrelevance proposition)The value of a firm is unaffected by its capital structure. MM's proposition IIThe required rate of return on equity increases as the firm’s debt-equity ratio increases. Modigliani and Miller Proposition IA proposition by Modigliani and Miller which states that a firm cannot Modigliani and Miller Proposition IIA proposition by Modigliani and Miller which states that the cost of Open positionA net long or short position whose value will change with a change in prices. ![]() Policy-Ineffectiveness PropositionTheory that anticipated policy has no effect on output. Position diagramDiagram showing the possible payoffs from a derivative investment. Short positionOccurs when a person sells stocks he or she does not yet own. Shares must be borrowed, short positionThe sale of an investment, particularly by someone who does not yet own it. Short sale, short positionThe sale of a security or financial instrument not Take a positionTo buy or sell short; that is, to have some amount that is owned or owed on an asset or Aggressive Cost CapitalizationCost capitalization that stretches the flexibility within generally Asset CoverageExtent to which a company's net assets cover a particular debt obligation, class of preferred stock, or equity position. authoritythe right (usually by virtue of position or rank) to use resources to accomplish a task or achieve an objective Balance SheetA financial statement showing the financial position of a business – its assets, liabilities and Bank reconciliationA comparison between the cash position recorded on a company’s Bear raidA situation in which large traders sell positions with the intention of driving prices down. BookA banker or trader's positions. Book profitThe cumulative book income plus any gain or loss on disposition of the assets on termination of the SAT. Bridge financingInterim financing of one sort or another used to solidify a position until more permanent BuyTo purchase an asset; taking a long position. Buy inTo cover, offset or close out a short position. Related: evening up, liquidation. capital gainThe positive difference between the adjusted cost base of an investment held as a capital property and the proceeds of disposition you receive when you sell it. When you sell such an investment for more than you paid, you realize a capital gain. capital lossThe negative difference between the adjusted cost base of an investment held as a capital property and the proceeds of disposition you receive when you sell it. When you sell such an investment for less than you paid, you incur a capital loss. cash flowthe receipt or disbursement of cash; when related Closing purchaseA transaction in which the purchaser's intention is to reduce or eliminate a short position in Closing saleA transaction in which the seller's intention is to reduce or eliminate a long position in a stock, confrontation strategyan organizational strategy in which company management decides to confront, rather than avoid, competition; an organizational strategy in which company management still attempts to differentiate company cost leadership strategya plan to achieve the position in a cost structurethe relative composition of an organization’s CoverThe purchase of a contract to offset a previously established short position. Covered callA short call option position in which the writer owns the number of shares of the underlying Covered or hedge option strategiesStrategies that involve a position in an option as well as a position in the Covered PutA put option position in which the option writer also is short the corresponding stock or has Day tradingRefers to establishing and liquidating the same position or positions within one day's trading. Dealer loanOvernight, collateralized loan made to a dealer financing his position by borrowing from a Delivery noticeThe written notice given by the seller of his intention to make delivery against an open, short Dynamic hedgingA strategy that involves rebalancing hedge positions as market conditions change; a EquilibriumA position in which there is no pressure for change, where demand and supply are equal. Evening upBuying or selling to offset an existing market position. Exposure nettingOffsetting exposures in one currency with exposures in the same or another currency, Flat price riskTaking a position either long or short that does not involve spreading. Foreign exchange riskThe risk that a long or short position in a foreign currency might have to be closed out Future-Oriented Financial InformationInformation about prospective results of operations, financial position and/or changes in financial position, based on assumptions about future economic conditions and courses of action. Future-oriented financial information is presented as either a forecast or a projection. HedgeA securities transaction that reduces or offsets the risk on an existing Hedged portfolioA portfolio consisting of the long position in the stock and the short position in the call hold missiona mission that attempts to protect the business Information servicesOrganizations that furnish investment and other types of information, such as internal accounting controlsRefers to forms used and procedures Limit priceMaximum price fluctuation LiquidationWhen a firm's business is terminated, assets are sold, proceeds pay creditors and any leftovers LongOne who has bought a contract(s) to establish a market position and who has not yet closed out this Long runA period of time in which all costs are variable; greater than one year. Long straddleA straddle in which a long position is taken in both a put and call option. Maintenance margin requirementA sum, usually smaller than -but part of the original margin, which must ManagementManagement refers to the individuals in an entity that have the authority and the responsibility to manage the entity. The positions of these individuals, and their titles, vary from one entity to another and, to some extent, from one country to another depending on the local laws and customs. Thus, when the context requires it, the term includes the board of directors or committees of the board which are designated to oversee certain matters (e.g., audit committee). Margin requirement (Options)The amount of cash an uncovered (naked) option writer is required to Material review boardA company committee typically comprising members representing Membershipor a seat on the exchange A limited number of exchange positions that enable the holder to Merchant BankA financial institution that engages in investment banking functions, such as advising clients in mergers and acquisitions, underwriting securities and taking debt or equity positions. Mortgage InsuranceCommonly sold in the form of reducing term life insurance by lending institutions, this is life insurance with a death benefit reducing to zero over a specific period of time, usually 20 to 25 years. In most instances, the cost of coverage remains level, while the death benefit continues to decline. Re-stated, the cost of this kind of insurance is actually increasing since less death benefit is paid as the outstanding mortgage balance decreases while the cost remains the same. Lending institutions are the most popular sources for this kind of coverage because it is usually sold during the purchase of a new mortgage. The untrained institution mortgage sales person often gives the impression that this is the only place mortgage insurance can be purchased but it is more efficiently purchased at a lower cost and with more flexibility, directly from traditional life insurance companies. No matter where it is purchased, the reducing term insurance death benefit reduces over a set period of years. Most consumers are up-sizing their residences, not down-sizing, so it is likely that more coverage is required as years pass, rather than less coverage. Mutual offsetA system, such as the arrangement between the CME and SIMEX, which allows trading Naked option strategiesAn unhedged strategy making exclusive use of one of the following: Long call OffsetElimination of a long or short position by making an opposite transaction. Related: liquidation. Opening purchaseA transaction in which the purchaser's intention is to create or increase a long position in Opening saleA transaction in which the seller's intention is to create or increase a short position in a given organization charta depiction of the functions, divisions, Original marginThe margin needed to cover a specific new position. Related: Margin, security deposit (initial) Overreaction hypothesisThe supposition that investors overreact to unanticipated news, resulting in P&S (P and S)Purchase and sale statement. A statement provided by the broker showing change in the customer's net Perfect hedgeA financial result in which the profit and loss from the underlying asset and the hedge position Performance attribution analysisThe decomposition of a money manager's performance results to explain PukeSlang for a trader selling a position, usually a losing position, as in, "When in doubt, puke it out." PurchaseTo buy, to be long, to have an ownership position. ReplacementThis subject of replacement of existing policies is covered because sometimes existing life insurance policies are unnecessarily replaced with new coverage resulting in a loss of valuable benefits. If someone suggests replacing your existing coverage, insist on having a comparison disclosure statement completed. Restructuring ChargeA special, nonrecurring charge taken in conjunction with a consolidation Restructuring ChargesCosts associated with restructuring activities, including the consolidation and/or relocation of operations or the disposition or abandonment of operations or productive assets. Reversing tradeEntering the opposite side of a currently held futures position to close out the position. Risk arbitrageSpeculation on perceived mispriced securities, usually in connection with merger and Round-turnProcedure by which the Long or short position of an individual is offset by an opposite Scale inWhen a trader or investor gradually takes a position in a security or market over time. ScalpTo trade for small gains. It normally involves establishing and liquidating a position quickly, usually ShortOne who has sold a contract to establish a market position and who has not yet closed out this position Short sellingEstablishing a market position by selling a security one does not own in anticipation of the price SpectailA dealer that does business with retail but that concentrates more on acquiring and financing its own Speculative motiveA desire to hold cash for the purpose of being in a position to exploit any attractive Spread strategyA strategy that involves a position in one or more options so that the cost of buying an Structured SettlementHistorically, damages paid out during settlement of personal physical injury cases were distributed in the form of a lump-sum cash payment to the plaintiff. This windfall was intended to provide for a lifetime of medical and income needs. The claimant or his/her family was then forced into the position of becoming the manager of a large sum of money. Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |