Glossary letters

a b c d e f g h i j k l m n o p q r s t u v w x y z

B (credit rating)

A 'B' credit rating is a credit rating assigned to debt instruments that are considered speculative or non-investment grade status, reflecting significant credit risk and a higher likelihood of issuer default. Ratings such as B+, B, or B- show varying levels of risk within this category.Learn more

Bagholder

A bagholder refers to an investor who holds onto a stock which has decreased in value for an extended period, often with little prospect of recovery, resulting in substantial unrealised losses.

Balance Sheet

A balance sheet is a financial statement providing a summary of a company's assets, liabilities, and shareholders' equity at a given point in time, for a picture of its financial condition and net worth.Learn more

Banco Santander

Banco Santander is a Spain-headquartered major global bank. It's widely recognised for its operations in Europe, Latin America, and North America, and offers retail and commercial banking services.

Bank Condition

Bank condition refers to the overall financial health of a bank, typically assessed through various indicators like capital adequacy, asset quality, management quality, earnings, and liquidity.

Bank of America

Bank of America is one of the largest financial institutions in the US, providing a wide range of banking, investing, asset management, and other financial and risk management products and services.

Bank of England

The Bank of England is the UK's central bank, responsible for issuing currency, overseeing monetary policy, and maintaining financial stability within the country.

Bank of Japan

The Bank of Japan is Japan's central bank, which serves to manage the country's currency and monetary policy, aiming to maintain financial stability and promote economic growth.

Bank Run

A bank run describes the situation when a large number of customers withdraw their deposits simultaneously, fearing the bank will become insolvent, potentially leading to actual insolvency if the bank lacks sufficient liquid assets.

Bankable Funds

Bankable funds refer to capital or assets that are readily acceptable by banks for deposit or investment, often defined by their liquidity and low risk.

Bankruptcy Prediction

Bankruptcy prediction involves analysing financial trends and indicators to estimate the likelihood of a company becoming insolvent or unable to meet its debt obligations.

Bar Chart

A bar chart in finance is a graphical representation of data where individual bars represent different values of financial metrics such as price movements, volumes, or other financial indicators.Learn more

Barbell strategy

A barbell strategy in investing involves placing the bulk of investments in long-term bonds and a smaller portion in high-yield, short-term assets, avoiding middle-duration risks.

Bárcenas affair

The Bárcenas Affair involves allegations of illegal financing within Spain's Popular Party, where former treasurer Luis Bárcenas admitted to managing a slush fund, leading to significant political scandal and legal cases.

Barclays Capital Aggregate Bond Index

The Bloomberg US Aggregate Bond Index is a benchmark index that measures the investment grade, US dollar-denominated, fixed-rate taxable bond market, including treasuries, corporate bonds, and mortgage-related bonds.Learn more

Barclays PLC

Tracing its history back centuries, Barclays PLC is a UK-based major bank, offering global banking, investment, and wealth management services.

Barron's 400 Index

The Barron's 400 Index is a stock index created by Barron's magazine, measuring the performance of highly liquid US companies based on financial soundness and growth potential.

Base Metals

Base metals are common and inexpensive metals as opposed to precious metals like gold and silver. Examples include copper, zinc, nickel, and lead, often used in commercial and industrial applications.

Basel 4

Basel 4 describes the informal term for the latest set of banking regulatory standards developed by the Basel Committee on Banking Supervision, aimed at refining and enhancing the existing Basel 3 regulations.

Basel Accords

The Basel Accords are a series of international banking regulations (Basel I, II, III, and IV) issued by the Basel Committee on Banking Supervision, designed to enhance financial stability by regulating capital adequacy and risk management.

Basel Committee on Banking Supervision (BCBS)

The Basel Committee on Banking Supervision (BCBS) is an international committee that was formed to provide recommendations on banking regulations, particularly concerning capital risk, market risk, and operational risk.

Basel III

Basel 3 is a set of international banking regulations developed by the Basel Committee on Banking Supervision, designed to strengthen bank capital requirements by increasing bank liquidity and decreasing bank leverage.

Basic Earnings Per Share

Basic earnings per share (EPS) is a financial metric that measures a company's profitability by dividing its net earnings by the total number of outstanding shares, providing a straightforward indicator of earnings performance.

Basis Point

A basis point is a measurement unit used in finance to describe the percentage change in the value or rate of a financial instrument, equal to 1/100th of 1%, commonly used in expressing changes in interest rates.Learn more

Basis Risk

Basis risk means the risk that the price of a futures contract may not move in line with the price of the underlying asset, causing a hedge to be less effective or to result in a loss.Learn more

Basket of Goods

A basket of goods is a fixed set of consumer products and services whose price is regularly measured to track inflation and other economic indicators through indices like the consumer price index (CPI).Learn more

BB+ (credit rating)

A BB credit rating is assigned to a debt instrument or issuer that poses an increased risk to investors compared to higher-rated securities but is still not considered to be in the speculative or high-risk category.Learn more

BBB (credit rating)

A BBB credit rating is given to bonds and issuers that are considered investment grade, and show a moderate risk of default with a generally acceptable safety for investment.Learn more

Beachhead acquisition

In business, a beachhead may refer to a strong initial position secured by a company or military force from which it can advance to further success or areas.

Bear Market

A bear market is an environment in which securities prices fall across a range of asset classes, in contrast to a bull market, where prices rise.Learn more

Bear raid

A bear raid refers to an attempt by investors to manipulate stock prices by short selling an overwhelming amount of shares in an attempt to drive prices down.

Behavioural economics

Behavioural economics studies the effects of psychological, cognitive, emotional, cultural, and social factors on the economic decisions of individuals and institutions and how those decisions vary from those implied by classical theory.

Behavioural Finance

Behavioural finance is a field of study that proposes psychology-based theories to explain stock market anomalies, including severe rises or falls in stock prices.

BEL 20 index

The BEL 20 Index is a Belgian stock market index tracking the performance of the top 20 companies by market capitalisation listed on the Brussels Stock Exchange.

Bellwether Stock

A bellwether stock is one that's generally believed to be a leading indicator of the direction of the economy or of a sector due to its influence, size, or market position.

Beneficial Ownership

Beneficial ownership refers to the rights of enjoying the benefits and proceeds from a security or property, which may not be under the direct ownership of the beneficiary.

BEP-20 tokens

BEP-20 is a token standard on Binance Smart Chain which extends ERC-20, the most common Ethereum token standard. It is used to create fungible tokens compatible with the broader Binance ecosystem.Learn more

Berkshire Hathaway

Berkshire Hathaway is a holding company running a range of private companies and holding major stakes in numerous global enterprises. Headquartered in Omaha, Nebraska, it's managed by Warren Buffett, known for its long-term investment strategy and diverse portfolio of businesses and stock holdings.

Bespoke portfolio (CDO)

A bespoke portfolio CDO (collateralised debt obligation) is a customised form of CDO that's tailored to the risk-return preferences of specific investors, typically involving non-standard assets or tranches.

BET-10

The Bucharest trading index, also known as the BET or the BET-10, is the most prominent and popular stock index for the Bucharest stock exchange, based in the capital city of Romania. It currently functions as the reference index for Romania’s capital markets.

Beta

A beta stock is a measurement of the volatility, or systematic risk, of a stock in comparison to the market as a whole. A beta greater than one indicates the stock is more volatile than the market.

Bias

In finance, bias refers to a preconceived notion or preference that can affect investment decisions and market outcomes, often leading to irrational behaviour or mispricing.Learn more

Bid

Bid pricing in finance refers to the highest price that a buyer is willing to pay for a security. In auctions, it represents the competitive offer placed by a potential buyer.

Bid-ask spread

The bid-offer spread is the difference between the highest price a buyer is willing to pay for an asset (bid) and the lowest price a seller is willing to accept (offer). It reflects the liquidity and risk associated with trading the asset.

Bid-to-cover ratio

The bid to cover ratio is an indicator used to evaluate the demand for government debt. It is measured as the amount of bids received in a treasury auction compared to the amount being sold.

Big boy letter

A big boy letter is an agreement used in securities transactions where parties agree to proceed with a deal even though they possess material non-public information, acknowledging the risks involved.

Big Mac PPP

The Big Mac Index is an informal measure of currency exchange rates based on the prices of a Big Mac burger in McDonald's restaurants in different countries.

Biotechnology industry ETF

A biotech ETF (a biotechnology industry exchange-traded fund) is an ETF that invests in biotechnology companies and tracks the value of the underlying assets.

BIST 100 index

The BIST 100 index is a commonly used abbreviation for the Borsa Istanbul stock exchange, Turkey’s main stock exchange. It regulates the activities of the Istanbul Stock Exchange, Istanbul Gold Exchange and Derivatives Exchange of Turkey.Learn more

Blockchain oracle

A blockchain oracle is a third-party service that provides external data to smart contracts on the blockchain, enabling them to execute transactions based on inputs from the outside world.

Blockchain technology

Blockchain technology describes a decentralised digital ledger that records transactions across many computers so that the record cannot be altered retroactively without the alteration of all subsequent blocks. It's the technology that underpins many cryptocurrencies, such as bitcoin. Learn more

Blue-chip index

A blue chip index tracks the performance of financially stable and well-established companies that are typically market leaders in their sectors.

Blue-chip stock

Blue chip is the term that describes large, nationally recognised, financially sound companies known for their quality, reliability, and ability to operate profitably in both good and bad times.

BM&F Bovespa

BM&F Bovespa is the main stock exchange in Brazil, located in São Paulo, and one of the largest in the world, known for trading stocks, commodities, futures, and other securities.

BME Spanish Exchange

The BME Exchange, or Bolsas y Mercados Españoles, is a prominent stock exchange in Spain, comprising different markets for equities, bonds, derivatives, and electronic trading platforms.

BNP Paribas

BNP Paribas is a prominent French international banking group, one of the largest in the world, providing a wide range of financial services on a global scale.

Bolt-on acquisition

A bolt-on acquisition involves a company purchasing another company to add to its existing business operations, usually to enhance its market share, expand its portfolio, or gain synergies.

Bombay Stock Exchange

The Bombay Stock Exchange (BSE) is the oldest stock exchange in Asia, located in Mumbai, India, and is known for its rapid trading system and a large number of listed companies.

Bond conversion

Bond conversion refers to the process where a bondholder converts their bond into a predetermined amount of equity, typically shares of the issuing company.

Bond ETF

A bond ETF is an exchange-traded fund that invests in bonds and other debt instruments, offering investors a way to gain exposure to the fixed-income markets with liquidity similar to stocks.Learn more

Bond Exchange of South Africa (BESA)

The Bond Exchange of South Africa was the main bond market in South Africa before its operations were merged into the Johannesburg Stock Exchange to streamline financial trading infrastructure.

Bond maturity

Bond maturity refers to the date on which a bond's principal amount is due to be paid back to the bondholder, marking the end of the bond's life.Learn more

Bond prospectus

A bond prospectus is a legal document that details the terms of the bond being issued, the issuer's financial situation, and the risks involved, helping investors make informed decisions.

Bond swap

A bond swap is a strategy where an investor exchanges one bond for another with different characteristics, typically to achieve better yields, more favourable maturity terms, or tax benefits.

Bond warrant

A bond warrant is an option that allows the holder to purchase a company's bond at a specific price before a certain date, usually included as an incentive to enhance the bond's attractiveness to investors.Learn more

Bond Yield

Bond yield is used to describe the return an investor realises on a bond, calculated by the bond’s annual coupons divided by its current price.Learn more

Bonds

A bond is a fixed-income instrument that represents a loan made by an investor to a borrower (typically corporate or governmental), which is obligated to pay back the principal and interest at later dates.Learn more

Bonus share

Bonus shares are additional shares given to current shareholders without any extra cost, based upon the number of shares that a shareholder owns.

Book building

Book building is a process by which an underwriter attempts to determine the price to offer an initial public offering, or IPO, based on demand from institutional investors.

Book closure

Book closure refers to a period when a company will not handle adjustments to the register, or records of who owns their shares, typically leading up to dividend payments and other corporate actions.

Book Value

Book value is the net value of a company's assets minus its liabilities and intangible assets, serving as a basis for estimating a company's net worth.

Boom and bust cycle

The boom and bust cycle is an economic cycle characterised by periods of rapid economic expansion followed by contraction and recession.

Bottom Fishing

Bottom fishing is an investment strategy where investors seek out securities whose prices have dropped and are considered undervalued, similar to fishing for bargains.

Bought deal

A bought deal is an agreement where an underwriter commits to buying the entire issue of a new security from the issuer

Boutique investment bank

A boutique bank is a smaller financial firm that provides specialised banking and investment services, often focusing on specific areas like mergers and acquisitions, capital raising, or financial advisory services.

Bovespa index

The Bovespa Index, officially known as the Ibovespa, is the benchmark index of about 70 stocks that are traded on the B3 (Brasil Bolsa Balcão), representing the most actively traded stocks in the Brazilian stock market.

Box spread

A box spread is an options trading strategy involving the creation of a synthetic long and short position in the same asset with different expiration dates, used primarily for arbitrage.

Break-even analysis

Break even analysis is a calculation used to determine the point at which revenue received equals the costs associated with receiving the revenue, helping businesses determine profitability thresholds.

Breakout

Breakout refers to

Brexit

Brexit refers to the UK's decision to leave the European Union, finalised in January 2020 following a 2016 referendum. The decision led to significant economic and political changes for the UK and the EU.

Bridge bank

A bridge bank is a temporary bank established by a national regulator or central bank to operate a failed bank until a buyer can be found for its operations, ensuring continuity of banking services.

Bridge Financing

Bridge financing is a temporary financing solution, used to cover a company’s short-term costs until it secures long-term financing options. Investment banks or venture capital firms usually provide bridge financing in the form of short-term loans or equity investment.

British Columbia Securities Commission

The British Columbia Securities Commission (BCSC) is an independent provincial government agency responsible for regulating securities trading in British Columbia, Canada.

Broker

A broker is an individual or firm that acts as an intermediary between an investor and a securities exchange, responsible for facilitating buying and selling of stocks, bonds, and other securities.Learn more

Broker-dealer

A broker-dealer is a person or company that buys and sells securities on its own behalf or on behalf of its clients. They are duly licensed and regulated entities.

BSC

What is BSC in terms of crypto? It stands for Binance Smart Chain, a blockchain network that runs smart contract-based applications and uses Binance Coin, or BNB, for transactions, staking and governance.

BSE Sensex index

The BSE Sensex Index is a stock market index composed of 30 of the largest and most actively traded stocks, representative of various sectors, on the Bombay Stock Exchange.

Budget deficit

A budget deficit occurs when a government spends more money than it receives in revenue, the opposite of a budget surplus.

Bull Market

A bull market is a period during which stock prices are rising, generally due to strong economic indicators and investor confidence, typically lasting for several months or years.Learn more

Bull-bear line

The term 'bull bear line' may refer to the theoretical line that separates a bull market from a bear market, often used informally by traders to signify market sentiment and trends.

Business Assets

Business assets are items of value owned by a company, which can include physical assets like buildings and machinery, or intangible assets such as intellectual property and goodwill.

Business Cycle

The business cycle refers to the fluctuating levels of economic activity in an economy over a period, and may be marked by intermittent periods of expansion and contraction.Learn more

Business failure

Business failure occurs when a company ceases operations due to its inability to make a profit or cover its expenses, often resulting in bankruptcy.

Business Process Redesign (BPR)

Business process redesign involves the examination and redesign of business processes and workflows within a company with the intention of boosting efficiency and productivity.

Buy and Sell

To buy and sell in financial markets refers to the basic activity of purchasing and then selling securities or commodities to achieve a financial gain.Learn more

Buy Side

The buy side refers to individuals or firms that purchase securities and include investment managers, pension funds, and hedge funds, focusing on maximising returns on investments.

Buy the dip

Buy the dip' is an investment strategy where investors purchase stocks when their prices drop, anticipating a rebound and future profits.

Buy-in management buyout (BIMBO)

A buy-in management buyout (BIMBO) is a form of acquisition where a combined team of external and internal managers purchases the business.

Buying in

Buy in can refer to the process of buying a stake in a company, especially in terms of private investing or buying shares in a stock market.

Buyout

A buyout refers to the purchase of a company's shares whereby the acquirer gains control of the targeted company, often used in the context of private equity investments.