What Is Buying on Margin? Buying on margin occurs when an investor buys an asset by borrowing the balance from a bank or broker. Buying on margin refers to the initial payment made to the broker for the asset—for example, 10% down and 90% financed. The investor uses the marginable securities in their broker account
What Is Buy-In Management Buyout (BIMBO)? A Buy-In Management BuyOut (BIMBO) is a form of a leveraged buyout (LBO) that incorporates characteristics of both a management buyout (MBO) along with a management buy-in (MBI). A BIMBO occurs when existing management along with outside managers decide to buy out a company. The existing management represents the
What Is a Buy-Minus? A buy-minus order is a type of order in which a client instructs a broker to purchase a stock at a figure below the current market price. Buy-minus orders are used when a trader is hoping to acquire a stock when its price declines briefly. Traders can further restrict buy-minus orders
What Is Buyout? A buyout is the acquisition of a controlling interest in a company and is used synonymously with the term acquisition. If the stake is bought by the firm’s management, it is known as a management buyout and if high levels of debt are used to fund the buyout, it is called a
What Is a Buyout Settlement Clause? A buyout settlement clause is a contractual provision often found in liability insurance contracts. This clause provides the policyholder with the right to reject a settlement offer made by the insurer. If the insured party exercises this right, the insurance company buys out the policy. The policyholder can use
What Is the Buy-Side? The financial institutions of a free-market economy include a segment called the buy-side: firms that purchase investment securities. These include insurance firms, mutual funds, hedge funds, and pension funds, that buy securities for their own accounts or for investors with the goal of generating a return. Opposite of the buy-side professional
What is a Buy Stop Order A buy stop order instructs a broker to purchase a security when it reaches a pre-specified price. Once the price hits that level, the buy stop becomes either a limit or a market order, fillable at the next available price. This type of stop order can apply to stocks
What Are Buy Stops Above? Buy stops above refers to a belief that an asset’s price will accelerate upward once it breaks through a level of resistance or key price level. The acceleration comes from a concentration of buy stop orders. These orders could be placed by people looking to enter long positions if the
What Is Buy the Dips? “Buy the dips” means purchasing an asset after it has dropped in price. The belief here is that the new lower price represents a bargain as the “dip” is only a short-term blip and the asset, with time, is likely to bounce back and increase in value. Key Takeaways Buying
What Is Buy to Close? “Buy to close” refers to terminology that traders, primarily option traders, use to exit an existing short position. In market parlance, it is understood to mean that the trader wants to close out an existing option trade. Technically speaking, it means that the trader wants to buy an asset to
