Pump and Dump

A fraudulent practice of encouraging investors to buy shares in a company in order to artificially inflate the price and sell one’s own shares when the price is high.  Generally, a stock is boosted by a party who has an established position through false,...

Hyperinflation

A term used to denote rapid, excessive, and out-of-control price increases in an economy.  Generally, hyperinflation is differentiated from regular inflation (or the measure of the ricing prices of goods and services) by an extremely rapid rise in prices, typically...

Inflation

A situation marked by rising prices in an economy.  The more technical definition is that inflation is a sustained increase in the general price level in an economy.  This situation translates to an increase in the cost of living in an area as the prices of goods and...

Government Bond

A debt security issued by a government to fund federal spending or programs.  Government bonds represent debts issued by a government itself.  They are generally considered to be low-risk investments as they’re backed by the issuing government.  The US Treasury...

Deflation

The general decline in the price of goods and services.  Generally, deflation occurs when the supply of money and credit contract, but prices can also decline due to increased productivity and technological improvements.  Whether is economy or money supply are in a...

Corporate Bond

A type of debt security that is issued by a firm and sold to potential investors.  In this system, the company receives the capital it needs, and the investors are paid a pre-established number of interest payments (with a fixed or variable interest rate).  When the...

Synthetic Long

A strategy for options trading designed to imitate a long stock position.  A synthetic long stock is created by purchasing at-the-money calls and then selling an equivalent number of at-the-money puts with the same expiration date.  The downside of a synthetic long...

Bailout

An immediate injection of financial support into a company or organization facing imminent bankruptcy or collapse.  Bailouts can take the form of loans, cash, bonds, or stock purchases.  They may or may not require financial reimbursement.  A bailout may also be...

Prospectus

An official document companies must file with Securities and Exchange Commission (the SEC) as part of a registration process in order to provide an investment offering to the public.  They’re filed for stocks, bonds, and mutual funds.  These documents assist...