What Are Encumbered Securities?

Encumbered securities are securities that are held as collateral by a lender. The lender may be a bank, broker-dealer, or other financial institution. The borrower is typically required to post collateral in order to secure a loan. The collateral may be in the form of cash, securities, or other assets. Encumbered securities may be subject … Read more

What Is Notional Principal Amount?

The notional principal amount is the underlying value of a financial instrument. For example, the notional principal amount of a bond is the par value of the bond. The notional principal amount of a swap is the notional value of the swap, which is the underlying value of the swap contract. What does nominal amount … Read more


Underperform is a term used to describe a situation where a security or investment is not performing as well as its peers or the market as a whole. When a security is said to be underperforming, it means that it is not meeting the expectations of investors. There can be many reasons why a security … Read more

Ex-Ante Definition.

An ex-ante definition is a term used in trading to describe the act of setting a price or rate before a trade or transaction takes place. This is done in order to protect both parties involved in the trade from any potential losses that may occur as a result of fluctuations in the market. How … Read more

Nominee Definition.

A nominee is a person or entity who is named to act on another person’s behalf. In the context of investing and trading, a nominee is typically used to hold securities in street name on behalf of the beneficial owner. The beneficial owner is the person who actually owns the securities, while the nominee is … Read more

Flash Trading Definition.

Flash trading is a type of trading that occurs when a trade is executed at a price that is better than the prevailing quote or inside the bid/ask spread. A trade that occurs at a price that is worse than the prevailing quote or outside the bid/ask spread is considered a slow trade. Flash trades … Read more

Regular-Way Trade (RW) Definition.

A regular-way trade is defined as a securities transaction that settles on the trade date plus two business days. For example, if an investor purchases a stock on a Monday, the trade will settle on Wednesday. If the trade had been placed on a Friday, it would settle the following Tuesday. The term “regular way” … Read more

What Is a Deal Ticket?

A deal ticket is a record of a transaction between a buyer and a seller, typically generated by the broker. It includes the date, time, price, quantity, and other important details of the trade. Deal tickets are used by brokers to keep track of their trades, and by investors to track their portfolios. What must … Read more

High-risk trading may offer high rewards.

. High risk, high reward: the speculation game. What are high risk markets? High risk markets are those in which the potential for loss is greater than the potential for gain. This can be due to a number of factors, including political instability, currency volatility, and poor economic conditions. In general, high risk markets are … Read more

What Is an Opening Cross?

An opening cross is a term used in trading to describe the process of opening a trade at the same time as another trader. This is done by placing an order to buy or sell at the same time as another order is placed to buy or sell the same security. Opening crosses typically occur … Read more