See: Issuer; Underwrite

Big Board
Industry lingo for the New York Stock Exchange.

See: New York Stock Exchange

Black Friday
Industry lingo that has come to connote a sharp drop in the financial markets. The first Black Friday occurred on September 24, 1869. A group of financiers attempted to corner the gold market, which caused a panic and then an economic depression. The panic of 1873 also began on Friday.

See: Bear Market; Black Monday; Cornering the Market; Depression; Volatility

Black Monday
Monday, October 19, 1987--the day when the Dow Jones Industrial Average fell a record 508 points. This drop was on top of a series of sharp drops that occurred the previous week. The drop may have represented investors' apprehensions about inflated stock prices, the federal budget and trade deficits. However, there are many who blame program trading for the extreme volatility.

See: Bear Market; Black Friday; Dow Jones Industrial Average; Overvalued; Program Trading; Volatility

Blanket Recommendation
A recommendation made by a brokerage firm to buy or sell a particular stock or stocks in a specific industry. The advice is intended for investors without regard to their investment objectives or portfolio size.

See: Broker; Portfolio

Block
A large quantity of a security that is either held or traded. Generally, a block is considered to be 10,000 shares or more of stock and 200,000 or more bonds.

See: Block Trade

Block Trade
A large amount of a stock's shares sold as a single unit.

See: Block

Blotter
A log in which daily activities are recorded. Such daily activities include orders placed and executed and, securities received or delivered.

Blowout
A hot issue--shares of a new securities offering that are sold very quickly. Investors usually do not obtain all the shares they want. During a blowout, a corporation is most likely to obtain a higher price for their securities.

See: Hot Issue; Initial Public Offering; New Issue

Blue Chip
A publicly traded company known for the quality and wide acceptance of its products, services and management, and for its ability to profit and pay dividends to shareholders. Examples of blue chip stocks are IBM and General Electric. The term originates from blue poker chips--the most valuable chips.

Board Broker
Employees of the Chicago Board Options Exchange who handle orders that cannot be immediately executed. These types of orders are called "away from the market orders."

See: Away From The Market; Chicago Board Options Exchange; Options

BOM (Branch Office Manager)
Individual who is in charge of a branch office of a brokerage firm or a bank. BOMs who supervise the activities of at least three brokers must pass supervisory tests given by the exchanges and the FINRA.

See: Broker

Bond
A certificate of indebtedness in which the issuer (borrower) promises to pay the bondholder (creditor) a specified amount of interest for a specified time period and to repay the debt at maturity. Obligations that are due in more than one year are classified as bonds whereas if the debt is for less than one year, it is called a "note." Bondholders are creditors of the issuer and they do not have ownership privileges. A bond may be registered either by issuing certificates in the bondholder's name, book-entry or in bearer certificates.

There are many different kinds of bonds and different methods of evidencing bond ownership. The most common types are:

* Secured bonds are backed by collateral that may be sold if the issuer fails to pay interest and principal when they are due.

* Unsecured bonds or debentures are only backed by the full faith and credit of the issuer. There is no specific collateral.

* Convertible bonds give holders the right to exchange the bonds for other securities of the issuer at a future date, under prescribed conditions.

See: Bearer Bond; Book-Entry Securities; Collateral; Convertible Bond; Debenture; Debt Security; Full Faith And Credit; General Obligation Bond; Indenture; Maturity Date; Municipal Bond; Principal; Registered Security; Treasuries; Unsecured Debt; Zero Coupon Security

Bond Anticipation Note (BAN)
A short-term debt instrument that is issued by a municipality or a state. At maturity, the debt is paid from the proceeds of a new bond issue.

BANs usually provide an investor with a tax-free yield that may be higher than other comparable tax-exempt debt instruments of the same maturity.

See: Debt Instrument; Maturity Date; New Issue; Short Term Debt; Tax Exempt Security; Yield

Bond Broker
Broker who trades bonds on an exchange floor or in fixed-income markets.

"Bond Buyer, The"
Daily newspaper that provides statistics and indexes that are utilized in fixed-income markets. The publication also lists long term government bonds and compares their after-tax yield with tax-free municipal yields.

See: Bond Buyer's Indexes; Fixed Income Investment; Government Bond; Long Term Debt; Municipal Bond; Tax Exempt Security; Yield

Bond Buyer's Indexes
Municipal bond indexes that are published daily in "The Bond Buyer," a newspaper that reports on the fixed-income markets. The indexes are a standard by which municipal bond yields are measured. Investors use Bond Buyer Indexes to plot interest rate patterns.

See: "Bond Buyer, The"; Fixed Income Investment; Government Bond; Long Term Debt; Municipal Bond; Tax Exempt Security; Yield

Bond Counsel
A law firm or attorney who reviews a new municipal issue and then issues the legal opinion.

See: Legal Opinion; Qualified Legal Opinion

Bond Crowd
A section on the floor of an exchange in which members gather to transact bond orders. Because this area is separate from stock traders, it is called a "bond crowd."

See: Cabinet Crowd; Floor

Bond Fund
A mutual fund whose objective is to seek high income and preservation of capital by investing mainly in bonds. Some funds may aim to achieve a proper mix between short-term, intermediate-term and long-term maturities. The fund can be taxable or tax-free.

See: Bond; Intermediate Term; Long Term Debt; Maturity Date; Mutual Fund; Short Term Debt; Tax Exempt Security

Bond Power
A form used in the transfer of registered bonds from one owner to another. A bond power replicates the assignment form on the back of the bond certificate, but it is separated from the certificate. Hence, a bond power is sometimes called an "assignment separate from certificate." Although both achieve the same goal, a bond power has a safety advantage in being separate.

See: Certificate; Registered Security; Stock Power

Book-Entry Securities
Securities that are registered to an owner without the issuance of a physical certificate. Ownership is reflected by an entry in the issuer's books. This method of registering securities has grown in popularity because investors need not worry about the location of their certificates and it requires less paperwork for a brokerage firm.

See: Certificate; Certificateless Municipal; Registered Security

Book Value
An accounting term that states the equity value of an outstanding share of stock. A stock's book value is determined by dividing the amount of stockholders' equity by the number of common shares outstanding. A company's book value may be of no relevance to its to market value.

See: Outstanding Stock; Fair Market Value

Borrowing Power
Dollar amount that clients can buy securities on margin. The margin limit is dependent on the type of security--usually 50% of a stock's value, 30% of a bond's value and 100% of a cash equivalent's value (i.e., money market funds). Buying power can also refer to securities hypothecated (pledged) to a lender as loan collateral. The lender's policies and the type of security determine the collateral's loan value.

See: Cash Equivalent; Collateral; Hypothecation; Margin

BOT (Bought)
An abbreviation for the word "bought." The abbreviation for "sold" is SL.

Bottom
A security's lowest market price or the market's lowest level as determined by any of the major indexes. The bottom can either be for a particular trading day, year or cycle.

See: Historical Trading Range; Range

Bottom Fisher
Person who looks for investments that have fallen to what they perceive to be the security's bottom prices before it starts to turn upward.

See: Bottom; Bottom-Up Approach to Investing

Bottom-Up Approach to Investing
An investment approach whereby an investor will search for individual stocks that are performing well. This approach assumes that individual corporations can do well even though its industry is not doing well.

See: Bottom Fisher

Box
The physical location in a brokerage house where securities or other documents are held in safekeeping. These securities may qualify for stock loans or as bank loan collateral. The determination is dependent upon regulations concerned with the safety and segregation of clients' securities.

See: Collateral; Selling Short Against The Box; Transfer And Hold

Box Spread
An option position composed of four different contracts--a long call/short put with identical exercise prices and expiration dates, combined with a short call/long put with identical exercise prices and expiration dates.