What Is a Store Of Value? A store of value is an asset, commodity, or currency that maintains its value without depreciating. Key Takeaways A store of value is an asset that maintains its value, rather than depreciating. Gold and other precious metals are good stores of value because their shelf lives are essentially perpetual.A nation’s
What Is a Story Stock? A story stock refers to a company’s shares whose value reflects expected outperformance, the culmination of some new innovation, or favorable press coverage, rather than its market value being solely based on fundamentals like assets and income. A story stock’s share price is thus often bid up on overly optimistic
What Is a Straddle? A straddle is a neutral options strategy that involves simultaneously buying both a put option and a call option for the underlying security with the same strike price and the same expiration date. A trader will profit from a long straddle when the price of the security rises or falls from
What Is a Straight Bond? A straight bond is a bond that pays interest at regular intervals, and at maturity pays back the principal that was originally invested. A straight bond has no special features compared to other bonds with embedded options. U.S. Treasury bonds issued by the government are examples of straight bonds. A
What Is a Straight Life Annuity? A straight life annuity, sometimes called a straight life policy, is a retirement income product that pays a benefit until death but forgoes any further beneficiary payments or a death benefit. Like all annuities, a straight life annuity provides a guaranteed income stream until the death of the annuity
What Is Straight Line Basis? Straight line basis is a method of calculating depreciation and amortization. Also known as straight line depreciation, it is the simplest way to work out the loss of value of an asset over time. Straight line basis is calculated by dividing the difference between an asset’s cost and its expected
What Is Straight-Through Processing (STP)? Straight-through processing is an automated process done purely through electronic transfers with no manual intervention involved. Its popular uses are in payment processing as well as the processing of securities trades. Any company involved with straight-through processing will need to have the necessary systems and technical networking in place to
What Is Stranger-Owned Life Insurance? Stranger-owned life insurance (STOLI) is an arrangement in which an investor holds a life insurance policy without insurable interest on the insured. Without insurable interest, the investor would ordinarily be prohibited from purchasing the original policy. Because of this, STOLI policies are generally illegal and difficult to obtain. Key Takeaways
What Is a Strangle? A strangle is an options strategy in which the investor holds a position in both a call and a put option with different strike prices, but with the same expiration date and underlying asset. A strangle is a good strategy if you think the underlying security will experience a large price
What Is a Strategic Alliance? A strategic alliance is an arrangement between two companies to undertake a mutually beneficial project while each retains its independence. The agreement is less complex and less binding than a joint venture, in which two businesses pool resources to create a separate business entity. A company may enter into a
