Earlier this week my company had an all employee meeting, which happens about once a quarter. The president and CEO of the company touched on the areas of the country where we were under represented. He identified these as our “under-penetrated markets.”
My first reaction was to realize that I have an under-penetrated market of own. And, that was about the time I mentally undertook the following script:
INT. OFFICE – DAY
Over an INTERCOME:
MS. DIANE (OS)
Why don’t you bring your long straddle in here, Michael?
MICHAEL
Actually, I’ve been feeling a little bearish recently.
MS. DIANE (OS)
Well, I’m bull enough for the both of us, so get in here already!
INT. MS. DIANE’S OFFICE – DAY
MICHAEL Enters:
MS. DIANE
Finally!
MICHAEL
I was identifying under-penetrated markets throughout the midwest.
MS. DIANE
Why don’t you come over here? I’ll show you either my aggressive investment strategy or my horizontal spread.
MICHAEL
I think you need to take advantage of the cooling off period, because I think you’re too heavily invested in back-end loaded securities.
MS. DIANE
I’m sorry. When I see a hot issue with a firm quote, I just can’t help myself.
MS. DIANE starts to undress.
Here are a few financial terms to that I used above, and a few others that I just think are fun to say:
Adjusted gross income – Earned income plus net passive income, portfolio income, and capital gains.
Aggressive investment strategy – A method of porfolio allocation and management aimed at achieving maximum return. Aggressive investors place a high percentage of their investable assets in equity securities and a far lower percentage in safer debt securities and cash equivalents, and they pursue aggressive policies, including margin trading, arbitrage, and option trading.
Asset-backed security – One whose value and income payments are backed by the expected cash flow from a specific pool of underlying assets. Pooling the assets into financial instruments allows them to be sold to investors more easily than selling them individually. The process is called securitization.
Back-end load – A commission or sales fee that is charged when mutual fund shares or variable annuity contracts are redeemed. It declines annually, decreasing to zero over an extended holding period – up to eight years – as described in the prospectus.
Bear market – A market in which prices of a certain group of securities are falling or are expected to fall.
Cash market – Transactions between buyers and sellers of commodities that entail immediate delivery of and payment for a physical commodity.
Catastrophe call – The redemption of a bond by an issuer owing to disaster (e.g., a power plant that has been built with proceeds from an issue burns to the ground).
Chinese wall – A descriptive name for the division within a brokerage firm that prevents insider information from passing from corporate advisers to investment traders who could make use of the information to reap illicit profits.
Cooling-off period – The period (a minimum of 20 days) between a registration statement’s filing date and the registration’s effective date. In practice, the period varies in length.
Double-barreled bond – A municipal security backed by the full faith and credit of the issuing municipality as well as by pledged revenues.
Firm quote – The actual price at which a trading unit of a security (such as 100 shares of stock or five bonds) may be bought or sold. All quotes are firm quotes unless otherwise indicated.
Horizontal spread – The purchase and sale of two options on the same underlying security and with the same exercise price but different expiration dates.
Hot issue – A new issue that sells or is anticipated to sell at a premium over the public offering price.
Naked – The position of an option investor who writes a call or a put on a security he does not own.
Naked call writer – An investor who writes a call option without owning the underlying stock or other related assets that would enable the investor to deliver the stock should the option be exercised.
Naked put writer – An investor who writes a put option without owning the underlying stick or other related assets that would enable the investor to purchase the stock should the option be exercised.
Sales load – The amount added to a mutual fund share’s net asset value to arrive at the offering price.
Stripper well – An oil well that produces fewer than 10 barrels per day.
Two-dollar broker – An exchange member that executes orders for other member firms when their floor brokers are especially busy. Two-dollar brokers charge a commission for their services; the amount of the commission is negotiated.
