CALL (BONDS) - The right to redeem outstanding bonds before their maturity date. An issuer will usually call a bond if the interest rate on the bond is higher than the rate for comparable bonds in the marketplace.
CALL (OPTIONS) - The right to buy a specific number of shares at a specified price on a specific date.
CAPITAL - Money, equipment or property used in a business by a person or corporation.
CAPITAL GAIN, CAPITAL LOSS - The difference between what a capital asset cost and the price it brought when sold. Capital gain is the profit from selling at a higher price than originally paid for. Capital loss is the loss incurred from selling an asset for less than the adjusted cost of buying it.
CBOE - see CHICAGO BOARD OF OPTIONS EXCHANGE
CBOT - see CHICAGO BOARD OF TRADE
CENTRAL BANK - In most nations, the central bank is a government body that issues currency and sets interest rates in an effort to control the level of economic activity. In the United States, the Federal Reserve System fulfills this role.
CHANGE - The difference of the current price from the previous trading day's price.
CHAPTER 7 - Sometimes referred to as straight bankruptcy, this filing usually leads to liquidation of a company. A company in Chapter 7 proceedings is able to continue to operate under the direction of a court trustee until the matter is settled. If the company can resolve its problems and settle with creditors in the interim, it may not have to be liquidated.
CHAPTER 11 - The most common form of bankruptcy, this action frees a company from the threat of creditors' lawsuits while it reorganizes its finances. The debtor's reorganization plan must be accepted by a majority of its creditors. Unless the court rules otherwise, the debtor remains in control of the business and its assets.
CHARGE OFF - A loan that no longer is expected to be repaid and is written off as bad debt.
CHICAGO BOARD OF OPTIONS EXCHANGE (CBOE) - An options exchange set up by the Chicago Board of Trade (www.cboe.com)
CHICAGO BOARD OF TRADE (CBOT) - The largest commodity trading market in the United States. Trades grains, Treasury bonds and notes, precious metals and financial indexes. (www.cbot.com)
CHICAGO MERCANTILE EXCHANGE (CME) - Futures exchange that trades meat, livestock and currency. (www.cme.com)
CLOSED-END FUND - A mutual fund with a limited number of shares, which are traded on a stock exchange. Closed-end funds are listed on the New York, American or Nasdaq exchanges.
CLOSELY HELD CORPORATION - A corporation in which stock shares and voting control are concentrated in the hands of a small number of investors, but for which some shares are available and traded on the market.
CMER - see CHICAGO MERCANTILE EXCHANGE
COFFEE, SUGAR AND COCOA EXCHANGE (CSCE) - The coffee, sugar and cocoa futures exchange in New York. (www.csce.com)
COLLATERAL - Stock or other property that a borrower is obliged to turn over to a lender if unable to repay a loan.
COMEX - see NEW YORK COMMODITIES EXCHANGE
COMMERCIAL PAPER - One of the various types of short-term negotiable instruments whereby industrial or finance companies obtain cash after agreeing to pay a specific amount of money on the date due.
COMMODITIES FUTURES CONTRACT - A contract to purchase or sell a specific amount of a given commodity at a specified future date.
COMMODITY - A tangible good that is bought or sold on the open market, such as gold, corn, oil or soybeans. Also refers to financial instruments such as CDs or Treasuries, on which futures contracts can be sold.
COMMON STOCK FUND - Mutual funds that invest almost exclusively in common stocks. The objectives of these fund groups are generally described as one of the following: Growth, Aggressive Growth, Growth & Income, Special Purpose or Index.
CONSOLIDATED TAPE - A data circuit consisting of an A Network, which reports NYSE based trading, and a B Network, which reports Amex based trading.
CONVERTIBLE BOND - A corporate bond that can be converted into another form of security, usually stock, at a later date.
COPT - Consolidated Options
CORPORATE BONDS - Basically a loan to a company. In return for lending money to the company, the owner of the bond gets regular interest payments and can sell the bond to other investors. The company can use the money to fund growth - expansion of its operations, hiring a larger work force, etc.
COUPON - The interest rate that the bond issuer agrees to pay a bondholder until the bond comes due. It is expressed as a percentage of the face value of the bond. For example, a bond with a 5 percent coupon will pay $5 per $100 face amount of the bond.
CRB - Commodities Research Bureau, an index compiled by Bridge Inc. to measure the overall performance of the commodity futures market.
CREDIT RATING - A grade (usually a letter grade) assigned to a corporate bond that rates its level of risk for the investor. The rating is often used by banks and investors to determine whether to buy the bond, or whether to loan the corporation money. A higher rating means the company stands a better chance of paying back investors. The three main credit rating firms are Moody's, Standard & Poor's and Fitch.
CREDIT UNION - A non-profit financial cooperative that offers financial services similar to a bank for people sharing a common bond, such as working for the same company. Credit unions often offer loans at a lower rate than traditional banks and accounts usually accrue higher interest rates. Credit Unions are regulated by the National Credit Union Administration.
CROSS RATE - The rate of exchange between two currencies calculated by referring to the rates between each and a third currency.
CTN - see NEW YORK COTTON EXCHANGE
CURRENCY BOARD - An alternative to a central bank, often established in response to economic turmoil. A currency board, which generally includes some foreigners, replaces the central bank and sets a fixed exchange rate. Argentina instituted a currency board in April 1991, creating a new peso worth $1 and requiring the government to hold enough dollars in reserves so that every peso could be exchanged for a dollar. The move drastically cut inflation and also restored Argentina's ability to borrow money at reasonable interest rates. However, currency boards effectively strip a nation of the power to control its own economy. Economic factors such as wages, interest rates, the balance of payments, even rents, adjust to the fixed exchange rate.
CUSIP - Committee on Uniform Security Identification Procedures, the nine-digit identification code for a stock or mutual fund.