Qualified Plan a retirement plan, such as a 401(k) or KEOGH, allowing a client to shelter investment income

Quiet Period a period of up to 25 days after an IPO is priced during which the underwriters are under additional restrictions in issuing research; under certain specific conditions, the SEC allows the underwriters to issue a research recommendation sooner

Quote price of a bond or a stock

Rally describes a situation in which stock or bond markets experience strong increases in value

Random Walk the theory that, in the long term, investors cannot beat market averages

Rating with regard to bonds, an alphabetical designation of relative quality (AA, BB, C, etc.) indicating whether a bond has the backing to guarantee payment to investors

Real Estate Investment Trust (REIT) a company that invests in a portfolio of real estate properties and passes the profits through to its shareholders

Realized Gain or Loss see “Capital Gain” and “Capital Loss”

Registered Representative stockbroker

Registered Security issue that is registered with the Securities Exchange Commission

Registration Statement a document containing information on a company, its management, and its finances that must be submitted via EDGAR to the SEC, and that must be approved by the SEC prior to an IPO

Reorganization describes a variety of significant changes within a company, including layoffs, mergers, etc.

Road Show series of presentations (breakfasts, lunches, etc.) given by a company’s management to institutional investors to pitch the company’s IPO or to increase public awareness

Rotation describes a situation in which investors sell the stocks of one industry in order to invest in the stocks of another industry

Secondary Market where securities are purchased and sold after the original issue

Secondary Offering sale to the public of previously issued securities that are held by large investors

Securities stocks and bonds

Securities and Exchange Commission agency established by Congress to regulate stocks and bonds

Securities Investor Protection Corporation (SIPC) The non-profit corporation that protects securities customers of its members up to $500,000 (including $100,000 for claims for cash). An explanatory brochure is available upon request or at www.sipc.org .  You may also obtain information about SIPC by contacting them by phone, email or regular mail at Securities Investor Protection Corporation 805 15th Street, N.W. Suite 800 Washington, D.C. 20005-2215 Tel: (202)371-8300 Fax: (202)371-6728 Email: asksipc@sipc.org

Self-Directed IRA a retirement account designed to enable the client to make his or her own investment decisions

Selling Group a group of brokers or dealers formed by the syndicate manager to distribute a new issue (or a secondary offering) to the public

Selling Short describes a situation when an investor borrows the stock from a brokerage firm, sells it at the current price (for example, $60 a share), then within a certain period of time buys enough to return what was borrowed to the brokerage firm (say, when the price has dropped to $50 a share), making a profit due to the fall in price

Simplified Employee Pension (SEP) a retirement plan for companies with fewer than 25 employees

Specialist A specialist uses his or her own money to invest in securities on the floor of the NYSE. Specialists help to control market volatility. Where there is an imbalance of buyers, specialists must be sellers, and vice versa.

Spin-Off when a parent company sells off all or part of a division in the form of an IPO, either to raise capital or sell off a non-essential part of its business

Split a stock split occurs when a company issues more shares to its current shareholders, as in the case of a 2-for-1 stock split, in which a company issues 2 shares for every share owned by current shareholders but at half the price value

Spread the difference between what the public paid for a stock and the proceeds the issuer received

Standard & Poors 500 (S&P 500) a market index tracking 400 industrial stocks, 20 transportation stocks, 40 financial stocks, and 40 public utilities, used to indicate the general direction of the market

Street Name term for securities a broker holds on behalf of a customer, an arrangement designed to facilitate transfer of shares

Syndicate a group of investment banking firms formed to underwrite an IPO; the lead manager and co-managers tend to do all the selling, while the syndicate members simply share in the risk of underwriting the issue

Technical Analysis one method of valuing stocks, which looks at the past price performance of a stock over time—contrast with “Fundamental Analysis”

Tender Offer when someone offers to buy another company by going directly to that company’s shareholders

Thin Market describes a situation in which trading volume is low

Tick for a stock, the change in price

Transfer Agent institution responsible for transferring stock from sellers to buyers

Treasury Bill a short-term bond that is issued by the federal government, with a range of 3 months to 1 year to maturity

Treasury Bond a long-term bond that is issued by the federal government, with a range of 10 to 30 years to maturity

Treasury Note a medium-maturity bond that is issued by the federal government, with a range of 1 to 10 years to maturity

Undercapitalized Company a company lacking sufficient cash to run properly

Underwriter a middleman that assists companies in going public by buying a new issue of stock on the assumption that it can resell the stock to the public

Variable Annuity describes an annuity that has a value based on bonds, stocks, or mutual funds

Venture Capital Venture capital firms raise funds from sources including institutional investors, high net-worth individuals, and state pension funds, and invest in private companies that need an influx of capital in order to develop and market a product or products in exchange for significant ownership, seats on the board of directors, etc.

Warrant type of security that enables an investor to buy a fixed number of shares at a fixed price over a particular period of time (such as 10 to 15 years)

Window Dressing when major institutions, at the end of the quarter, sell securities that have not performed well or buy others that have