What Is the Taping Rule? The taping rule requires special monitoring of FINRA-registered persons with a troubled history and firms that hire such individuals in large numbers. More formally known as Financial Industry Regulatory Authority Rule 3170, “Tape Recording of Registered Persons by Certain Firms,” the so-called “taping rule” is meant to help meet an
What Is a Traded Average Price Option (TAPO)? A traded average price option (TAPO) is an option contract in which the investor’s profit or loss is based on the difference between the strike price and the average price, and not solely on the price of the underlying asset at expiration. First offered in 1987 by the Banker’s Trust
What Is a Target Cash Balance? A target cash balance describes the ideal level of cash that a company seeks to hold in reserve at any given point in time. This figure is optimized to strike a balance between the opportunity costs of holding too much cash and the balance sheet costs of holding too
What Is a Systematic Withdrawal Plan (SWP)? A systematic withdrawal plan (SWP) is a scheduled investment withdrawal plan typically used in retirement. Investors can structure SWPs in various ways. Mutual funds typically allow an investor to determine a systematic withdrawal plan that includes interval payouts monthly, quarterly, semi-annually, or annually. Key Takeaways A systematic withdrawal
What Is a Systematic Withdrawal Schedule? A systematic withdrawal schedule is a method of withdrawing funds from an annuity account that specifies the amount and frequency of the payments to be made to the annuitant. Annuitants are not guaranteed lifelong payments as they are with the standard annuitization method, but they provide a stream of
What Is a Systemically Important Financial Institution (SIFI)? A systemically important financial institution (SIFI) is a bank, insurance, or other financial institution (FI) that U.S. federal regulators determine would pose a serious risk to the economy if it were to collapse. A SIFI is viewed as “too big to fail” and imposed with extra regulatory
What Is a Weak Currency? A weak currency refers to a nation’s money that has seen its value decrease in comparison to other currencies. Weak currencies are often thought to be those of nations with poor economic fundamentals or systems of governance. A weak currency may also be encouraged by a country seeking to boost its
What Is a Short-Term Loss? The term “short-term loss” generally refers to a loss on the sale or other disposition of a capital asset. A short-term capital loss is realized for federal income tax purposes when an asset—such as a stock, bond, or investment real estate—that has been owned for a year or less is
What Is State Income Tax? State income tax is a direct tax levied by a state on income earned in or from the state. In your state of residence, it may mean all your income earned anywhere. Like federal tax, state income tax is self-assessed, which means taxpayers file required state tax returns. Key Takeaways Forty-two
What Is Stratified Random Sampling? Stratified random sampling is a method of sampling that involves the division of a population into smaller subgroups known as strata. In stratified random sampling, or stratification, the strata are formed based on members’ shared attributes or characteristics, such as income or educational attainment. Stratified random sampling has numerous applications
