Category: Investor Definitions

A bond is a debt security, similar to an IOU.  Borrowers issue bonds to raise money from investors willing to lend them money for a certain amount of time. When you buy a bond, you are lending to the issuer, which may be a government, municipality, or corporation.  In return, the issuer promises to pay… Continue reading BONDS

The investor sells one bond and uses the proceeds to buy another bond, often at the same price.

What is a bond fund? “Bond funds” and “income funds” are terms used to describe a type of investment company (mutual fund, ETF, closed-end fund or unit investment trust (UIT)) that invests primarily in bonds or other types of debt securities. Depending on its investment objectives and policies, a bond fund may concentrate its investments in a particular type of bond or debt… Continue reading BOND FUNDS AND INCOME FUNDS

Boiler room schemes are large-scale operations designed to lure in as many investors to an investment scam as possible, often using high-pressure sales tactics.   Boiler room scheme operators may cold call investors or solicit investors through emails, text messages, social media, and other means.  Beware of boiler room scheme tactics, including: Aggressive Sales Tactics or Threats. … Continue reading BOILER ROOM SCHEMES

A group of people elected by shareholders to oversee the management of a corporation.

In addition to the federal securities laws, every state has its own set of securities laws—commonly referred to as “Blue Sky Laws”—that are designed to protect investors against fraudulent sales practices and activities. While these laws do vary from state to state, most state laws typically require companies making offerings of securities to register their… Continue reading BLUE SKY LAWS

A blank check company is a development stage company that has no specific business plan or purpose or has indicated its business plan is to engage in a merger or acquisition with an unidentified company or companies, other entity, or person. These companies typically involve speculative investments and often fall within the SEC’s definition of… Continue reading BLANK CHECK COMPANY

A binary option is a type of options contract in which the payout depends entirely on the outcome of a yes/no proposition and typically relates to whether the price of a particular asset will rise above or fall below a specified amount.   Once the option is acquired, there is no further decision for the holder… Continue reading BINARY OPTIONS

The term “bid” refers to the highest price a buyer will pay to buy a specified number of shares of a stock at any given time.  The term ask refers to the lowest price at which a seller will sell the stock. The bid price will almost always be lower than the ask or “offer,” price.  The… Continue reading BID PRICE

A beneficial owner holds stocks indirectly, for example, through a bank or broker-dealer. Beneficial owners are sometimes said to be holding shares in “street name.”