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The online dictionary of financial terms

1	Japanese Housewives The forex activities of Japanese housewives caught the attention of professional forex traders in the 2000’s when it became evident that these female Japanese retail traders had a discernible impact on currency markets. In 2007, a representative from the Bank of Japan acknowledged that the housewives’ trading helped stabilize currency markets due to their tendency to buy on dips and sell into rallies. Japanese interest rates have been very low since the 1990s and this ushered Japanese housewives into the currency trade to boost family savings and investment portfolios. Though traditionally seen as risk-averse investors, many housewives engages in heavily leveraged currency trades. In addition to standard currency trade, carry trade is also popular among Japanese housewives. This is a type of trade where the investor borrows money in a low-interest currency (such as the Japanese yen) and use the money to invest in an asset that is likely to provide a higher return, e.g. a high-yielding foreign currency. The archetypal Japanese family matriarch engaged in forex trade is often referred to as “Mrs. Watanabe” since Watanabe is a common Japanese surname. It’s the equivalent of “Mrs Smith” in the U.S. “Mrs Watanabe” is sometimes also used to refer to any retail trader in Japan, regardless of trading field, gender and marital status.
2	JAJO In finance, JAJO is an acronym for January, April, July and October. JAJO is one of several available option cycles; a pattern of months in which options contracts expire. Examples of alternatives to the JAJO option cycle is MJSD (March, June, September, December) and FMAN (February, May, August, November). On a separate note, many stock companies that pay dividends announce their dividends in the months of JAJO.
3	January Effect The January Effect is the recurring increase in stock prices that takes place in January each year. A study based on the period 1904 – 1974 showed that the average return for stocks during the month of January was five times greater than any other month during the year. However, the January Effect has been less pronounced in recent years, probably because markets have adjusted for it. Traditionally, there was a drop in stock prices in December when many investors wanted to realize losses for tax purposes, and this drop was then followed by a price increase in January, possibly boosted by traders and investors using year-end cash bonuses to buy stock. The January effect was more noticeable for small cap stock than for mid cap and large cap stock. The prevalence of tax-sheltered retirement plans is believed to have made investors less likely to sell off stock in December.
4	Jennifer Lopez – J.Lo In technical analysis, a rounding bottom in a stock’s price pattern is nicknamed a Jennifer Lopez of J.Lo. A J.Lo in a stock’s price pattern can be an indication of a positive market reversal, where expectations are gradually going from bearish to bullish.
5	Jitney When a broker who has direct access to a stock exchange performs trades for a broker who does not have direct access to a stock exchange. A fraudulent activity where two brokers trade a penny stock back and forth to rack up commissions and give the impression of high trading volume. Also known as the Jitney Game.
6	Job Lot In finance, a job lot is a commodities futures contract (lot) where the commodity trading volume is smaller than the volume required for regular futures contracts. Example: Silver futures contracts on this exchange is normally denominated in 5-ounce increments. If a special 2-ounce silver futures contract was created and listed in the exchange, it would be considered a job lot. The existence of job lots adds liquidity to the futures market by giving smaller participants access to the market; participants that aren’t large enough to handle the standard trading volumes. The term job lot has been borrowed into finance terminology from general English where it denotes a small amount of material or the production of a smaller than usual batch of something.
7	Jonestown Defense An extreme defensive strategy that is likely to cause ruin. Also known as suicide pill. In finance, a company where the directors are trying to prevent a hostile takeover can engage in a Jonestown Defense, i.e. carry out defensive actions that are very risky and may ruin the company. The term is a reference to the 1978 Jonestown cult massacre in Guyana. A Jonestown defense against a hostile takeover will often consist of extreme versions of existing anti-takeover tactics, e.g. Crown Jewel sales and share buybacks.
8	Joseph Effect The Joseph Effect was coined by Benoit Mandelbrot, who suggested that movements in a time series tend to be indicative of of larger trends and cycles more often than they are completely random. The name Joseph Effect is a reference to a story in the Bible where Joseph forewarns the pharaoh of Egypt that the region will enjoy seven bountiful years followed by seven years of food scarcity.
9	Jumbo Certificate Of Deposit In the United States, a certificate of deposit (COD) is considered a jumbo COD if the denomination is $100,000 or more. Jumbo COD:s are typically bought by banks, insurance companies and other large institutions.
10	Junk Bond A junk bond is a high-risk bond. Normally, these bonds have a high interest rate to compensate for the higher risk. Because of this, they are also known as high-yield bonds. In the United States, a bond rated BB or below is considered a junk bond.