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1

Back End Load

The Back End Load is a charge imposed when investors sell (redeem) shares in mutual funds.

Back End Loads discourage withdrawals from mutual funds. Many mutual funds decrease the size of the back end load one step for each year you hold on to your shares in the fund. It is common for the back end load to be removed completely once shares have been held for five years.

Synonym: Mutual fund exit charge (U.K.)

2

Bear Market

In a bear market, the trend of share prices is moving in a downward direction.

3

Bearer Bond

With a bearer bond, possession of the bond certificate is the only proof of ownership. The owner is not registered.

4

Bed And Breakfast

In the United Kingdom, “bread and breakfast” is slang for selling shares one day and buying them back the following day in order to realize a gain or a loss. Before the anti-avoidance provisions of the 1998 Budget came into force, Bed and Breakfasting was commonly done for tax purposes – a realized loss could be offset against a gain realized in the same tax year and vice versa, even for shares that were sold and then purchased back again the very next day.

5

Binary Option

A type of financial instrument that let you speculate on future market movements.  The options give you a large return when they mature in the money. They are worthless if they do not mature in the money.  Binary options are not traded on any open market.  You have to register with a binary option broker if you want to trade with binary options.  The broker assumes the opposite position when you buy an option.

6

Book Runner

An investment bank responsible for the sale of a new bond is known as a book runner. The book runner will carry out tasks such as allocating bonds among the bidders.

7

Bull Market

In a bull market, the trend of share prices is moving in a upward direction.

8

Bulldog Bond

A bond issued in pound sterling by a non-UK institution or non-UK government is nicknamed a Bulldog Bond.

9

Buy And Hold

Buy and Hold is a strategy where an asset (typically shares) is purchased with the intent of holding on to the asset for a period of time regardless of the market’s short-term movements. The investor hopes to profit from a long-term upward trend.

10

Buy Back

When a publicly listed company purchases its own shares, this is known as a buy back. The company can buy the shares on the open market or by tender offers.

Examples of common reasons for buy backs:

• The company attempts to increase the share price.
• The company wants to rationalize its capital structure.
• The company wants to decrease dilution when new shares are issued to meet the exercise of stock options grants.
• A buy back can be an alternative to dividend payments. In some situations, it is preferable for the shareholder from a tax perspective.

11

Buy On Rumor, Sell On The Fact

This is a saying that highlights a commonly seen stock market behavior. When positive rumors begin to circulate about a company, this tend to increase the share price, but we cannot trust this high price to remain for long because when the actual facts are revealed, the stock market will often react negatively to them – even if they aren’t bad. In many cases, it is simply difficult for the actual facts – such as the launch of a new product – to live up to the hype preceding the announcement.

Of course, if enough people believe in the axiom of buying on rumor and selling on fact, it will become a fulfilling prophecy.