Preferred shares confer part ownership like a normal stock, but also pay a fixed dividend like a bond. In case of financial difficulties, Bonds are the most secure, followed by Preferreds while Common Stock come last.
Instruments such as options and futures contracts, which derive their value from an underlying security. For example a farmer wishes to sell his crop to a speculator before the harvest, this would be a futures contract.
The selling of a stock or security that the seller does not own but has borrowed. Short selling is a trading strategy where the seller hopes to be able to buy the stock at a lower price, cover the outstanding short and take a profit from the difference.
A Bull Market is associated with increasing investor confidence and increased investing in anticipation of future price increases, whereas a Bear Market is where prices of stocks and securities are falling and widespread pessimism cause the negative sentiment to be self-sustaining.
The total dollar value of a company's outstanding shares. Calculated by multiplying the company's outstanding shares by the current market price. Used to understand how big a company is, rather than sales or assests.
When the price of a forward or futures contract is trading above the expected spot price at contract maturity