Financy Glossary
The online dictionary of financial terms

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1

Warehousing

Several investors who are in cahoots with each other buy shares in the same share company, while each of them makes sure to keep their individual holding below the level where notification to the exchange is required. By engaging in warehousing, they hope to increase their control over the company without anyone noticing what’s going on. Warehousing can for instance be carried out prior to an attempted takeover.

2

Warrant Bond

A bond with an attached warrant. The warrant gives the holder the right to buy shares in the company in the future.

3

Wash Sales

A process in which simultaneous purchases and sales are made in the same commodity futures contract, on the same exchange, and in the same month. The intention is to increase trading volume and commissions, without actually taking any position.

4

Weak Market

A market characterized by low volume and large spreads.

5

Weather Derivatives

This is a financial instrument used to manage the financial risks associated with (adverse or unexpected) weather conditions.

  • A farmer worries that a lot of rain will fall during the harvesting period and cause a financial loss. To mitigate the risk, he buys weather derivatives.
  • A theme park relies heavily on the income generated on a few important weekends in June, July and August. To protect the company financially from the consequences of rain on these weekends, the company purchases weather derivatives.
  • A gas company knows that it will sell less gas for heating if the winter is mild. To mitigate risk, it buys weather derivatives.

 

6

Whipsap

In the context of technical analysis, whipsaw is a pattern caused by a share price moving in one direction and then abruptly reversing direction.

7

White Knight

A White Knight is a company or other investor that comes to rescue a (target) company that is trying to resist an unwelcome bidder. The White Knight can for instance make a higher bid to scare off the unwelcome bidder, or make a higher bid with the intention of actually taking over the target company with the blessing of the target company’s management.

Grey Knight: A company or other investor making an uninvited counter bid for another company and whose intentions are unclear.

8

Windfall Profit

A one-off, large and unusual profit.

9

Window Settlement

When trades between dealers are settled through the physical comparison of transactions and where actual money and stocks are transferred between the parties.

Nowadays, window settlements are not very common among dealers. Clearing corporations and depositories are handling settlements that would earlier have been carried out in the form of a window settlement.

10

Worked Principle Trade

A term used by the London Stock Exchange to denote that a reported trade was from a worked principle agreement for a single security.