| back testing |
The term used to describe a process of optimizing a
trading strategy on historical data and applying it
to fresh data to see how well the strategy works.
|
|
| bear market |
The term used to describe a financial market during
a period when prices are generally falling.
|
|
| bear trap |
A false signal which indicates that the rising trend
of a stock or index has reversed when in fact it has
not.
|
|
| bears |
Investors or analysts who predict falling prices for
one or more types of assets, and/or sell some of their
investments.
|
|
| best ask |
The lowest quoted offer
of all competing Market Makers to sell a particular stock
at any given time. |
|
| best bid |
The highest quoted bid
of all competing Market Makers to buy a particular stock
at any given time. |
|
best-execution
requirement |
The obligation of Market
Makers, broker/dealers, and others to execute customer
orders at the best price available at the time the trade
is entered. |
|
| beta |
A statistical measure
of a stock's volatility compared with the overall market.
A beta of less than 1 indicates lower risk than the market;
a beta of more than 1 indicates higher risk than the market. |
|
| bid price (buy price) |
The quoted bid at which
a Market Maker is willing to buy a stock. |
|
| bid/ask spread |
The difference between
the price at which a Market Maker is willing to buy a
security (bid), and the price at which the firm is willing
to sell it (ask). The spread narrows or widens according
to the supply and demand for the security being traded. |
|
| block trade |
A purchase or sale of
a large quantity of stock, generally 10,000 shares or
more. |
|
| Bollinger Bands |
Bollinger Bands plot
trading bands above and below a simple moving average.
The standard deviation of closing prices for a period
equal to the moving average employed is used to determine
the band width. Traders look for buying opportunities
when prices are in the lower band, and selling opportunities
when the price activity is in the upper band. |
|
| bull market |
The term used to describe
a financial market during a period that prices are generally
rising. |
|
| bull trap |
A false signal which
is generated which indicates that the price of a stock
or index has reversed to an upward trend but which proves
to be false. |
|
| bulls |
Investors or analysts
who predict rising prices for one or more types of assets,
and/or buy investments. |
|
| buy and hold |
An investment practice
of buying stocks, bonds or funds with the intention of
holding for the long term. |
