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Investment and Trading Glossary

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

 

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INCOME FUND

A mutual fund that seeks to provide stable current income by investing in securities that pay interest or dividends.

See also mutual fund.

INCOME STATEMENT

The summary of a corporation´s revenues and expenses for a specific fiscal period.

INDEX

A comparison of current prices to some baseline, such as prices on a particular date. Indexes are frequently used in technical analysis.

See also average.

INDIVIDUAL RETIREMENT ACCOUNT (IRA)

A retirement investing tool for employed individuals that allows an annual contribution of 100% of earned income up to a maximum of $ 2,000. Some or all of the contribution may be deductible from current taxes, depending on the individual´s adjusted gross income and coverage by employer-sponsored qualified retirement plans.

INFLATION

A persistent and measurable rise in the general level of prices.

See also deflation; stagflation.

INITIAL PUBLIC OFFERING (IPO)

The first sale of common stock by a corporation to the public.

See also new issue market; public offering.

INSIDE INFORMATION

Material information that has not been disseminated to, or is not readily available to, the general public

INSIDE MARKET

The best (highest) bid price at which an OTC stock can be sold, and the best (lowest) ask price at which the same stock can be bought in the interdealer market.

See also affiliate; control person.

INSIDER

Any person who had or has access to material nonpublic information about a corporation.

Insiders include directors, officers and stockholders who own more than 10% of any class of equity security of a corporation.

INSTITUCIONAL ACCOUNT

An account held for the benefit of others. Examples of institutional accounts include banks, trusts, pension and profit-sharing plans, mutual funds and insurance companies.

INSTITUTIONAL INVESTOR

A person or organization that trades securities in large enough share quantities or dollar amounts that it qualifies for preferential treatment and lower commissions. An institutional order can be of any size. Institutional investor are covered by fewer protective regulations because it is assumed that they are more knowledgeable and better able to protect themselves.

IN-STREET-NAME ACCOUNT

An account in which the customer´s securities are held in the name of the brokerage firm, to facilitate payment and delivery. The customer remains the beneficial owner.

INTANGIBLE ASSET

A property owned that is not physical, such as formula, a copyright or goodwill.

INTEREST

The charge for the privilege of borrowing money, usually expressed as an annual percentage rate.

INTERNAL REVENUE SERVICE (IRS)

The U.S. government agency responsible for collecting most federal taxes and for administering tax rules and regulations.

INTERNATIONAL ARBITRAGE

The simultaneous purchase and sale of a security on an exchange effected for the purpose of profiting from the difference between its price on that exchange and its price on an exchange outside the jurisdiction of the U.S. securities regulators.

IN-THE-MONEY

The term used to describe an option that has intrinsic value, such as a call option when the stock is selling above the exercise price or a put option when the stock is selling below the exercise price

See also at-the-money; intrinsic value; out-of-the-money.

INTRINSIC VALUE

The potential profit to be made from exercising an option.  A call option is said to have intrinsic value when the underlying stock is trading above the exercise price.

See also time value.

INTRODUCING BROKER (IB)

A broker-dealer that does not hold customers´ money or securities; instead, it introduces customer accounts to a clearing broker-dealer, which handles all cash and securities for those accounts.

INVESTMENT ADVISER

(1)    Any person who makes investment recommendations in return for a flat fee or percentage of assets managed.

(2)    For investment companies, the individual who has the daily responsibility of investing the cash and securities held in the fund´s portfolio in accordance with objectives stated in the fund´s prospectus.

INVESTMENT BANKER

An institution in the business of raising capital for corporations and municipalities. An investment banker may not accept deposits or make commercial loans.

Syn investment bank.

INVESTMENT BANKING BUSINESS

A broker, dealer or municipal or government securities dealer that underwrites or distributes new issues of securities as a dealer, or that buys and sells securities for the accounts of others as a broker.

INVESTMENT COMPANY

A company engaged in the business of pooling investors´ money and trading in securities for them. Examples include face amount certificate companies, until investment trust and management companies.

INVESTMENT GRADE SECURITY

A security to which the rating services (Standard & Poor´s,  Moody´s, etc.) have assigned a rating a BBB/Baa or above.

INVESTMENT OBJETIVE

Any goal a client hopes to achieve though investing; examples include current income, capital growth and preservation of capital.

INVESTMENT PYRAMID

A portfolio strategy that allocates investable assets according to the relative safety of the investment. The base of the pyramid is composed of low-risk   investments. The mid portion is composed of growth investments and the top of the pyramid is composed of speculative investments.

INVESTOR

The purchaser of an asset or security with the intent of profiting from the transaction.

ISSUED STOCK

Equity securities authorized by the issuer´s registration statement and distributed to the public.

ISSUER

(1)    The entity, such as a corporation or municipality, that offers or proposes to offer its securities for sale.

(2)    The creator of an option: the issuer of an over the counter option is the option writer, and the issuer of a listed option is the Options Clearing Corporation.