ABC Agreement is an agreement between a firm that finances a seat on the New York Stock Exchange and the employee who purchases the seat. The agreement, approved by the exchange, permits the member to transfer the seat to another employee of the member firm, keep the seat and purchase a second membership for another individual designated by the lending firm, or sell the … [Read more...]
Accelerated Death Benefit – ADB
A death benefit in some life insurance policies that may be paid before the policyholder's actual death. Generally speaking, one may use the accelerated death benefit only to defray medical expenses should the policyholder be diagnosed with a terminal illness. An Accelerated Death Benefit (ADB) is a benefit that can be added to your life insurance policy. It can provide cash … [Read more...]
Adjustable-Rate Preferred Stock – ARPS [Explained]
A type of preferred stock where the dividends issued will vary with a benchmark, most often a T-bill rate. preferred stock , whose dividend instead of being fixed is adjusted, usually quarterly, based on changes in the Treasury bill rate or other money market rate. The prices of adjustable rate preferreds are less volatile than fixed rate preferreds. Also called floating rate … [Read more...]
What is Backtesting?
Backtesting The process of testing a trading strategy on prior time periods. Backtesting (or back-testing) is the process of evaluating a strategy, theory, or model by applying it to historical data. It can be used in situations like studying how a trading method would have performed in past stock markets, or how a model of climate and weather patterns would have matched … [Read more...]
What is a Mini-Sized Dow Options?
Mini-Sized Dow Options is a highly leveraged index option on a futures contract in which the underlying index is the Dow Jones Industrial Average. The option has a multiplier of five, meaning that the option allows one to buy (for a call) or sell (for a put) up to five times the value of the DJIA. This allows one to profit from the option for a lower price than one would … [Read more...]