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Definition of With rights

With Rights Image 1

With rights

Purchase of shares in which the buyer is entitled to the rights to buy shares in the company's
rights issue.



Related Terms:

Cum rights

With rights.


Rights-on

Shares trading with rights attached to them.


American shares

Securities certificates issued in the U.S. by a transfer agent acting on behalf of the foreign
issuer. The certificates represent claims to foreign equities.


Appraisal rights

A right of shareholders in a merger to demand the payment of a fair price for their Shares, as
determined independently.


Authorized shares

Number of Shares authorized for issuance by a firm's corporate charter.



Bargain-purchase-price option

Gives the lessee the option to Purchase the asset at a price below fair market
value when the lease expires.


Bellwether issues

Related:Benchmark issues.


With Rights Image 1

Benchmark issues

Also called on-the-run or current coupon issues or bellwether issues. In the secondary
market, it's the most recently auctioned Treasury issues for each maturity.


Blue-chip company

Large and creditworthy company.


Builder buydown loan

A mortgage loan on newly developed property that the builder subsidizes during the
early years of the development. The builder uses cash to buy down the mortgage rate to a lower level than the
prevailing market loan rate for some period of time. The typical buydown is 3% of the interest-rate amount
for the first year, 2% for the second year, and 1% for the third year (also referred to as a 3-2-1 buydown).


Buy

To Purchase an asset; taking a long position.


Buy in

To cover, offset or close out a short position. Related: evening up, liquidation.


Buy limit order

A conditional trading order that indicates a security may be Purchased only at the designated
price or lower.
Related: Sell limit order.


Buy on close

To buy at the end of the trading session at a price within the closing range.


Buy on margin

A transaction in which an investor borrows to buy additional Shares, using the Shares
themselves as collateral.


Buy on opening

To buy at the beginning of a trading session at a price within the opening range.


With Rights Image 2

Buy-and-hold strategy

A passive investment strategy with no active buying and selling of stocks from the
time the portfolio is created until the end of the investment horizon.


Buydowns

Mortgages in which monthly payments consist of principal and interest, with portions of these
payments during the early period of the loan being provided by a third party to reduce the borrower's monthly
payments.



Buying the index

Purchasing the stocks in the S&P 500 in the same proportion as the index to achieve the
same return.


Buyout

Purchase of a controlling interest (or percent of Shares) of a company's stock. A leveraged buy-out is
done with borrowed money.


Buy-back

Another term for a repo.


Buy-side analyst

A financial analyst employed by a non-brokerage firm, typically one of the larger money
management firms that Purchase securities on their own accounts.


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.


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.


Company-specific risk

Related: Unsystematic risk


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.


Current issue

In Treasury securities, the most recently auctioned issue. trading is more active in current
issues than in off-the-run issues.


With Rights Image 3

Current-coupon issues

Related: Benchmark issues



Day trading

Refers to establishing and liquidating the same position or positions within one day's trading.


Depository Trust Company (DTC)

DTC is a user-owned securities depository which accepts deposits of
eligible securities for custody, executes book-entry deliveries and records book-entry pledges of securities in
its custody, and provides for withdrawals of securities from its custody.


Direct stock-purchase programs

The Purchase by investors of securities directly from the issuer.


Dividend rights

A shareholders' rights to receive per-share dividends identical to those other shareholders receive.


Dual-currency issues

Eurobonds that pay coupon interest in one currency but pay the principal in a different
currency.


Euroequity issues

Securities sold in the Euromarket. That is, securities initially sold to investors
simultaneously in several national markets by an international syndicate. Euromarket.
Related: external market


Ex-rights

In connection with a rights offering, Shares of stock that are trading without the rights attached.


Ex-rights date

The date on which a share of common stock begins trading ex-rights.


Fully diluted earnings per shares

Earnings per share expressed as if all outstanding convertible securities
and warrants have been exercised.


Holding company

A corporation that owns enough voting stock in another firm to control management and
operations by influencing or electing its board of directors.


Insider trading

trading by officers, directors, major stockholders, or others who hold private inside
information allowing them to benefit from buying or selling stock.


Intercompany loan

Loan made by one unit of a corporation to another unit of the same corporation.


Intercompany transaction

Transaction carried out between two units of the same corporation.


Issue

A particular financial asset.


Issued share capital

Total amount of Shares that are in issue. Related: outstanding Shares.


Issuer

An entity that issues a financial asset.


Last trading day

The final day under an exchange's rules during which trading may take place in a particular
futures or options contract. Contracts outstanding at the end of the last trading day must be settled by delivery
of underlying physical commodities or financial instruments, or by agreement for monetary settlement
depending upon futures contract specifications.


Leveraged buyout (LBO)

A transaction used for taking a public corporation private financed through the use
of debt funds: bank loans and bonds. Because of the large amount of debt relative to equity in the new
corporation, the bonds are typically rated below investment grade, properly referred to as high-yield bonds or
junk bonds. Investors can participate in an LBO through either the Purchase of the debt (i.e., Purchase of the
bonds or participation in the bank loan) or the Purchase of equity through an LBO fund that specializes in
such investments.


Liquidation rights

The rights of a firm's securityholders in the event the firm liquidates.


Management/closely held shares

Percentage of Shares held by persons closely related to a company, as
defined by the Securities and exchange commission. Part of these percentages often is included in
Institutional Holdings -- making the combined total of these percentages over 100. There is overlap as
institutions sometimes acquire enough stock to be considered by the SEC to be closely allied to the company.


Management buyout (MBO)

Leveraged buyout whereby the acquiring group is led by the firm's management.


Mathematical programming

An operations research technique that solves problems in which an optimal
value is sought subject to specified constraints. Mathematical programming models include linear
programming, quadratic programming, and dynamic programming.


Minimum purchases

For mutual funds, the amount required to open a new account (Minimum Initial
Purchase) or to deposit into an existing account (Minimum Additional Purchase). These minimums may be
lowered for buyers participating in an automatic Purchase plan


Money purchase plan

A defined benefit contribution plan in which the participant contributes some part and
the firm contributes at the same or a different rate. Also called and individual account plan.


Multiple-issuer pools

Under the GNMA-II program, pools formed through the aggregation of individual
issuers' loan packages.


New-issues market

The market in which a new issue of securities is first sold to investors.


Open-market purchase operation

A systematic program of repurchasing Shares of stock in market
transactions at current market prices, in competition with other prospective investors.


Opening purchase

A transaction in which the Purchaser's intention is to create or increase a long position in
a given series of options.


Original issue discount debt (OID debt)

Debt that is initially offered at a price below par.


Outstanding shares

Shares that are currently owned by investors.


Oversubscribed issue

Investors are not able to buy all of the Shares or bonds they want, so underwriters must
allocate the Shares or bonds among investors. This occurs when a new issue is underpriced or in great demand
because of growth prospects.


Performance shares

Shares of stock given to managers on the basis of performance as measured by earnings
per share and similar criteria. A control device used by shareholders to tie management to the self-interest of
shareholders.


Preferred shares

Preferred Shares give investors a fixed dividend from the company's earnings. And more
importantly: preferred shareholders get paid before common shareholders. See: preferred stock.


Presold issue An issue

that is sold out before the coupon announcement.


Program trading

Trades based on signals from computer programs, usually entered directly from the trader's
computer to the market's computer system and executed automatically.


Property rights

rights of individuals and companies to own and utilize property as they see fit and to receive
the stream of income that their property generates.


Protective put buying strategy

A strategy that involves buying a put option on the underlying security that is
held in a portfolio. Related: Hedge option strategies


Purchase

To buy, to be long, to have an ownership position.


Purchase accounting

Method of accounting for a merger in which the acquirer is treated as having Purchased
the assets and assumed liabilities of the acquiree, which are all written up or down to their respective fair
market values, the difference between the Purchase price and the net assets acquired being attributed to goodwill.


Purchase agreement

As used in connection with project financing, an agreement to Purchase a specific
amount of project output per period.


Purchase and sale

A method of securities distribution in which the securities firm Purchases the securities
from the issuer for its own account at a stated price and then resells them, as contrasted with a best-efforts sale.


Purchase fund

Resembles a sinking fund except that money is used only to Purchase bonds if they are selling
below their par value.


Purchase method

Accounting for an acquisition using market value for the consolidation of the two entities'
net assets on the balance sheet. Generally, depreciation/amortization will increase for this method compared
with pooling and will result in lower net income.


Reopen an issue

The Treasury, when it wants to sell additional securities, will occasionally sell more of an
existing issue (reopen it) rather than offer a new issue.


Repurchase agreement

An agreement with a commitment by the seller (dealer) to buy a security back from
the Purchaser (customer) at a specified price at a designated future date. Also called a repo, it represents a
collateralized short-term loan, where the collateral may be a Treasury security, money market instrument,
federal agency security, or mortgage-backed security. From the Purchaser (customer) perspective, the deal is
reported as a reverse Repo.


Repurchase of stock

Device to pay cash to firm's shareholders that provides more preferable tax treatment
for shareholders than dividends. Treasury stock is the name given to previously issued stock that has been
rePurchased by the firm. A rePurchase is achieved through either a dutch auction, open market, or tender offer.


Rights offering

Issuance of "rights" to current shareholders allowing them to Purchase additional Shares,
usually at a discount to market price. Shareholders who do not exercise these rights are usually diluted by the
offering. rights are often transferable, allowing the holder to sell them on the open market to others who may
wish to exercise them. rights offerings are particularly common to closed end funds, which cannot otherwise
issue additional common stock.


Seasoned issue

issue of a security for which there is an existing market. Related: Unseasoned issue.


Seasoned new issue

A new issue of stock after the company's securities have previously been issued. A
seasoned new issue of common stock can be made by using a cash offer or a rights offer.


Secondary issue

1) Procedure for selling blocks of seasoned issues of stocks.
2) More generally, sale of already issued stock.


Share repurchase

Program by which a corporation buys back its own Shares in the open market. It is usually
done when Shares are undervalued. Since it reduces the number of Shares outstanding and thus increases
earnings per share, it tends to elevate the market value of the remaining Shares held by stockholders.


Shares

Certificates or book entries representing ownership in a corporation or similar entity


Small issues exemption

Securities issues that involve less than $1.5 million are not required to file a
registration statement with the SEC. Instead, they are governed by Regulation A, for which only a brief
offering statement is needed.


Special drawing rights (SDR)

A form of international reserve assets, created by the IMF in 1967, whose
value is based on a portfolio of widely used currencies.


Specific issues market

The market in which dealers reverse in securities they wish to short.


Stock repurchase

A firm's rePurchase of outstanding Shares of its common stock.


Swap buy-back

The sale of an interest rate swap by one counterparty to the other, effectively ending the swap.


Targeted repurchase

The firm buys back its own stock from a potential bidder, usually at a substantial
premium, to forestall a takeover attempt.


Trading

buying and selling securities.


Trading costs

Costs of buying and selling marketable securities and borrowing. trading costs include
commissions, slippage, and the bid/ask spread. See: transaction costs.


Trading halt

trading of a stock, bond, option or futures contract can be halted by an exchange while news is
being broadcast about the security.


Trading paper

CDs Purchased by accounts that are likely to resell them. The term is commonly used in the Euromarket.


Trading posts

The posts on the floor of a stock exchange where the specialists stand and securities are traded.


Trading range

The difference between the high and low prices traded during a period of time;
with commodities, the high/low price limit established by the exchange for a specific commodity for any one day's trading.


Unseasoned issue

issue of a security for which there is no existing market. See: seasoned issue.


Vanilla issue

A security issue that has no unusual features.


Voting rights

The right to vote on matters that are put to a vote of security holders. For example the right to
vote for directors.


Authorized shares

The number of Shares of stock that the company is legally authorized to sell.


Issued shares

The number of Shares that the company has sold to the public.


Outstanding shares

The number of Shares that are in the hands of the public. The difference between issued Shares and outstanding Shares is the Shares held as treasury stock.


Purchase discounts

A contra account that reduces Purchases by the amount of the discounts taken for early payment.



 

 

 

 

 

 

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