What Is a Strike Price? Options contracts are derivatives that give the holders the right, but not the obligation, to buy or sell some underlying security at some point in the future at a pre-specified price. This price is known as the option’s strike price (or exercise price). For call options, the strike price is
What Is a Strip? A strip is a bond coupon that has been removed from the bond so that the two parts can be sold separately, as an interest-paying coupon bond and as a zero-coupon bond. This process is handled by the brokerage or other financial institution that sells the products. A strip is also
What Is a Stock Exchange-Traded Fund (ETF)? The term stock exchange-traded fund (ETF) refers to a security that tracks a particular set of equities. These ETFs trade on exchanges the same way normal stocks do and track equities just like an index. They can track stocks in a single industry or an entire index of
What Is Stock-for-Stock? Stock-for-stock is a type of compensation deal between two companies in which stock is partly used toward the cost of acquisition. A set number of shares of one company are swapped with the shares of another as a way of covering costs. Stock swaps also occur in employee stock compensation programs, in
What Is a Stock Keeping Unit (SKU)? A stock-keeping unit (SKU) is a scannable bar code, most often seen printed on product labels in a retail store. The label allows vendors to automatically track the movement of inventory. The SKU is composed of an alphanumeric combination of eight-or-so characters. The characters make up a code
What Is the Stock Market? The term stock market refers to several exchanges in which shares of publicly held companies are bought and sold. Such financial activities are conducted through formal exchanges and via over-the-counter (OTC) marketplaces that operate under a defined set of regulations. Both “stock market” and “stock exchange” are often used interchangeably.
What Was the Stock Market Crash of 1987? The stock market crash of 1987 was a rapid and severe downturn in U.S. stock prices that occurred over several days in late October 1987. While the crash originated in the U.S., the event impacted every other major stock market in the world. In the five years
What Is a Stock Option? A stock option (also known as an equity option), gives an investor the right, but not the obligation, to buy or sell a stock at an agreed-upon price and date. There are two types of options: puts, which is a bet that a stock will fall, or calls, which is a
What Is a Stock Pick? A stock pick is when an analyst or investor uses a systematic form of analysis to conclude that a particular stock will make a good investment and, therefore, should be added to their portfolio. This is also known as active management. The position can be either long or short and
What Is Stock Power? Stock power is a legal power of attorney form that transfers the ownership of certain shares of a stock to a new owner. A stock power transfer form usually is only required when an owner opts to take physical possession of securities certificates, rather than holding securities with a broker. A
