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Leg |
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A term describing one side of a position with two or more sides. When a
trader legs into a spread, he/she establishes one side first, hoping for
a favorable price movement so the other side can be executed at a better
price. |
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Letter of intent |
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An agreement whereby an investor agrees to make a series of purchases of
mutual fund units. |
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Leverage |
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A term describing the greater percentage of profit or loss potential when
a given amount of money controls an asset with a much larger face value.
For example, a call option enables the owner to assume the upside potential
of 100 shares of stock by investing a much smaller amount than that required
to buy the stock. If the stock increases by 10 percent, for example, the
option might double in value. Conversely, a 10 percent stock price decline
might result in the total loss of the purchase price of the option.
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Liabilities |
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All debts or amounts owing by a company in the form of accounts payable,
loans, mortgages and long-term debts. |
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Limit order |
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A trading order placed to buy or sell a security at a specific price.
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Liquidity |
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1.
The ability of the market for a particular instrument to absorb a reasonable
amount of buying or selling with a reasonable price change. 2. A corporation's
current assets relative to its current liabilities; its cash position.
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Listed option |
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A put or call traded on an options exchange. In contrast, over-the-counter
options usually have non-standard or negotiated terms. |
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Load |
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See sales charge. |
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Long-term asset |
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An asset that gives benefits for more than one year. |
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Long-term bond |
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A bond or debenture maturing in more than ten years. |
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Long-term debt |
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Debt that becomes due after more than one year. |
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Long term option |
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Options contracts having maturities as long as two years and eight months.
Short-term options, generally expire within nine months. |
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