Choose a letter above or browse financial terms for the currently selected letter below. Click on the term name to see any articles that are related to the term.

Call Option

An option contract that gives the holder the right (but not the obligation) to buy a security at a specified price on or before a specific date.


Bonds that can be redeemed by their issuing corporation before the maturity date. Also applies to preferred shares that can be redeemed by the issuing corporation.


The upper limit on the interest rate of a floating-rate note or an adjustable mortgage.

Capital Gain/Loss

The difference between the net sales price of a capital asset (investment or real estate) and its net cost. If the sales price is higher, you have a gain. If it’s lower, you have a loss.

Capital Stock

Stock shares (common and preferred) issued by a company to raise capital.


The debt and/or equity mix that fund a firm’s assets. Total amount of a company’s issued securities.

Cash Flow

Often used as an indication of financial strength, cash flow is the amount of cash generated (and used) by a company during a specific time period. Earnings before depreciation, amortization, and non-cash charges.

Cash Sale

A market transaction that specifies delivery of securities the same day they are purchased.


A formal (usually engraved) document that serves as proof of stock ownership in a company.

Certificate of Deposit (CD)

Money market instrument issued by a bank that indicates a specific sum of money has been deposited. CDs bear a maturity date, a specific interest rate, and a duration of up to five years. Traditional CDs typically feature a penalty for early withdrawal.

Clearing House

An exchange component that confirms and settles securities trades.


Assets offered to secure credit.

Commercial Paper

A short-term, unsecured loan typically issued by companies with high credit ratings (and therefore relatively low risk) for financing internal accounts.


Fees paid to a broker for executing a trade based on the number of shares traded or the dollar amount of the trade.

Commission broker

A broker who acts as an agent for a particular brokerage house and who buys and sells securities for that brokerage and its clients on a commission basis.

Common Stock

A class of securities representing ownership and control in a corporation and that may pay dividends as well as appreciate in value.

Community Property Assets

Property that spouses own jointly (usually acquired during the marriage). Community property laws vary from state to state.


A large corporation that has acquired several other firms engaged in different industries.

Consolidated Balance Sheet

A comprehensive balance sheet that shows the financial health of a company and all its subsidiaries.

Consumer Price Index (CPI)

A monthly measure of U.S. inflation that charts the prices of consumer goods and services. The CPI is also called the cost of living index.

Convertible Bond

A bond that can be exchanges at the option of the holder into preferred or common stock at a preset ratio.


A financial organization that acts as a proxy for another similar organization that lacks direct access to certain places or markets.

Coupon Bond

An unregistered debt instrument payable to the holder via detachable coupons.

Coverdell Education Savings Account (ESA)

A replacement for the education IRA, an ESA is a trust or custodial account designed to help parents fund qualified education expenses for their children. Account contributions are taxed, although earnings used for qualified expenses are not. Ask your financial advisor for benefits and restrictions.

Cumulative Voting

A voting method in which participants receive as many votes as there are open board positions. This gives minority shareholders more say by allowing them to cast all their votes (if desired) for a single candidate. Cumulative voting is required under the corporate laws of some states and is permitted in most others.

Current Assets

Cash or assets that can be converted to cash at short notice (usually within one year), e.g., cash, government bonds, accounts receivable, etc.

Current Liabilities

Short-term debts owed by a company.

Current Return

An investment’s present earnings or rate of return.

Custodial Fees

Fees charged by an institution that holds securities in safekeeping for an investor.