- Day order
- An order that is placed for
execution, if possible, during only one trading
session. If the order cannot hp executed that day, it is automatically canceled.
- Day trading
- Refers to establishing and liquidating the same position or positions
within one day's trading.
- An entity that stands ready and willing to buy a security for its own account
(at its bid price) or sell from its own account (at its ask price).
- Dealer options
- Over-the-counter options, such as those offered by government and
mortgage backed securities dealers.
- Debenture bond
- An unsecured bond whose holder has the claim of a general
creditor on all assets of the issuer not pledged specifically to secure other debt.
Compare subordinated debenture bond, mortgage bond, and collateral trust bonds.
- Debt instrument
- An asset requiring fixed dollar payments, such as a government or
- Debt market
- The market for trading debt instruments.
- Dedicating a portfolio
- Related: Cash flow matching
- Default risk
- Also referred to as credit risk (as gauged by commercial rating
companies), the risk that an issuer of a bond may be unable to make timely principal
and interest payments.
- Deferred futures
- The most distant months of a futures contract. Related: Nearby
deferred-interest bond A bond that sells at a discount and does not pay interest for an
initial period, typically from three to seven years. Compare step-up bond and
- Defined benefit plan
- A pension plan in which the sponsor agrees to make specified
dollar payments to qualifying employees. The pension obligations are effectively the
debt obligation of the plan sponsor. Related: Defined contribution plan
- Defined contribution plan
- A pension plan in which the sponsor is responsible only for
making specified contributions into the plan on behalf of qualifying
participants. Related: Defined benefit plan
- The tender and receipt of an actual commodity or financial instrument in
settlement of a futures contract.
- Delivery notice
- The written notice given by the seller of his intention to make
delivery against an open, short futures position on a particular date. Related: Notice day
- Delivery options
- The options available to the seller of an interest rate futures
contract, including the quality option, the timing option, and the wild card option.
Delivery options make the buyer uncertain of which Treasury bond will be delivered or
when it will be delivered.
- Delivery points
- Those points designated by futures exchanges at which the financial
instrument or commodity covered by a futures contract may be delivered in fulfillment
of such contract.
- Delivery price
- The price fixed by the Clearing house at which deliveries on futures
are in invoiced; also the price at which the futures contract is settled when deliveries
- Also called the hedge ratio, the ratio of the change in price of a call option to
the change in price of the underlying stock.
- Demand deposits
- Checking accounts that pay no interest and can be withdrawn
upon demand. Related: Negotiable order of withdrawal accounts
- Derivative instruments
- Contracts such as options and futures whose price is derived
from the price of the underlying financial asset.
- Derivative markets
- Markets for derivative instruments.
- Deterministic models
- Liability-matching models that assume that the liability
payments and the asset cash flows are known with certainty. Related: Compare stochastic
- Differential disclosure
- The practice of reporting conflicting or markedly different
information in official corporate statements including annual and quarterly reports and
the 10-Ks and 10-Qs.
- Diffusion process
- A conception of the way a stock's price changes that assumes
that the price takes on all intermediate values. dirty price. Related: Full price
- Disclaimer of opinion
- An auditor's statement disclaiming any opinion regarding the
company's financial condition.
- Referring to the selling price of a bond, a price below its par
value. Related: Premium
- Discount rate
- The interest rate that the ]Federal Reserve charges a bank to borrow
funds when a bank is temporarily short of funds. Collateral is necessary to borrow,
and such borrowing is quite limited because the Fed views it as a privilege to be used
to meet short-term liquidity needs, and not a device to increase earnings.
- Discretionary account
- Accounts over which an individual or organization, other than
the person in whose name the account is carried, exercises trading authority or
- Diversifiable risk
- Related: Unsystematic risk
- Dividend discount model (DDM)
- A model for valuing the common-stock of a
company, based on the present value of the expected cash flows.
- Dividend rate
- The fixed or floating rate paid on preferred stock based on par value.
- Dividend yield
- The cash yield of a stock or stock index, used in determining the net
financing cost for a stock index future contract.
- Dollar duration
- The product of modified duration and the initial price.
- Dollar return
- The return realized on a portfolio for any evaluation period, including
(1) the change in market value of the portfolio and (2) any distributions made from the
portfolio during that period.
- Dollar safety margin
- The dollar equivalent of the safety cushion for a portfolio in a
contingent immunization strategy.
- Dollar value of an 01
- Related: Price value of a basis point
- Dollar-weighted rate of return
- Also called the internal rate of return, the interest rate
that will make the present value of the cash flows from all the subperiods in the
evaluation period plus the terminal market value of the portfolio equal to the initial
market value of the portfolio.
- Domestic market
- Part of a nation's internal market representing the mechanisms for
issuing and trading securities of entities domiciled within that nation. Compare
external market and foreign market.
- Dual-currency issues
- Eurobonds that pay coupon interest in one currency but pay
the principal in a different currency.
- A common gauge of the price sensitivity of an asset or portfolio to a
change in interest rates.
- Dynamic asset allocation
- An asset allocation strategy in which the asset mix is
mechanistically shifted in response to -changing market conditions, as in a portfolio
insurance strategy, for example.
- Dynamic hedging
- A strategy that involves rebalancing hedge positions as market
conditions change; a strategy that seeks to insure the value of a portfolio using a
synthetic put option.
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