B   -    A Nasdaq stock symbol specifying that the stock is Class B shares of the company.

B-Share   -   A class in a family of multi-class mutual funds. This class is characterized by a back-end load structure that is paid only when the fund is sold.

Baby Bells   -    A common nickname given to the U.S. regional telephone companies that were formed from the breakup of AT&T ("Ma Bell") in 1984. Baby Bells were created in accordance with antitrust legislation, which is designed to create more competition within the industry.

Baby Bills   -   A nickname given to the hypothetical companies that would have formed if the Justice Department had broken up Microsoft Corporation.

Baby Bond   -   Any bond issued with a par value less than $1,000.

Baby Boomer   -   A person who was born between 1946 and 1964. The baby boomer generation makes up a substantial portion of the North American population. Representing nearly 20% of the American public, baby boomers have a significant impact on the economy. As a result, baby boomers are often the focus of marketing campaigns and business plans.

Baby Boomer Age Wave Theory   -   An economic theory popularized by economist and writer Harry Dent, who concludes that the U.S. and other European markets will peak between 2008 and 2012. This is based on Dent's finding that a human's consumer spending habits peak by age 50; therefore, as the baby boomer generation reaches this age, the economy may be approaching a peak in consumer spending and in the markets.

Baccalaureate Bond   -   A zero-coupon bond issued by certain states to assist families save for college tuition by means of added tax benefits.

Back Door Listing   -   A strategy of going public used by a company that fails to meet the criteria for listing on a stock exchange. To get onto the exchange, the company desiring to go public acquires an already listed company.

Back Fee   -   The premium charged upon the second term or portion of a compound option.

Back Month Contract   -   A type of futures contract that expires in any month past the front month futures contract. The price of the first back month futures contract is often used along with the front month futures price to calculate the calender spread.
Also referred to as a "far month contract".

Back Months   -   The available futures contracts for a particular commodity that possess expirations or delivery dates furthest into the future. Also referred to as deferred futures or forward months.

Back of the Napkin Business Model   -   A slang term that refers to the representation of the basic components of a business model excluding any fine details. It incorporates only the core ideas and success factors of the business. The name comes from the notion that a quick outline of a business can be easily sketched on the back of a napkin to sufficiently demonstrate its fundamental concepts.

Back Office   -   Administration and support personnel in a financial services company. They carry out functions like settlements, clearances, record maintenance, regulatory compliance, and accounting. When order processing is slow due to high volume, it is commonly referred to as "back office crunch."

Back Stop   -   The act of providing last-resort support or security in a securities offering for the unsubscribed portion of shares. A company will try and raise capital through an issuance and to guarantee the amount received through the issue, the company will get a back stop from an underwriter or major shareholder to buy any of the unsubscribed shares.

Back Up the Truck   -   Slang that refers to the purchase of a large position in a stock or other financial asset by an investor or trader. Typically, when someone is willing to back up the truck on a financial asset, this implies that they're extremely bullish on that asset's performance.

Back-End Load   -   A fee (sales charge or load) that investors pay when selling mutual fund shares within a specified number of years, which usually ranges between five to ten years. The fee amounts to a percentage of the value of the share being sold. The fee percentage is highest in the first year and decreases yearly until the specified holding period ends, at which time it drops to zero.  
Also known as a "contingent deferred sales charge or load." 

Back-End Ratio   -   A ratio that indicates what portion of a person's monthly income goes toward paying debts. Total monthly debt includes expenses such as mortgage payments (made up of PITI), credit-card payments, child support and other loan payments. Lenders use this ratio in conjunction with the front-end ratio to approve mortgages.

Also known as "debt-to-income ratio".

Back-To-Back Letters of Credit   -   Two letters of credit (LCs) used together to help a seller finance the purchase of equipment or services from a subcontractor. With the original LC from the buyer's bank in place, the seller goes to his own bank and has a second LC issued, with the subcontractor as beneficiary. The subcontractor is thus ensured of payment upon fulfilling the terms of the contract.

Back-To-Back Loan   -   A loan in which two companies in different countries borrow offsetting amounts from one another in each other's currency. The purpose of this transaction is to hedge against currency fluctuations. With the advent of currency swaps this type of transaction is no longer used very often.

Backdating   -   Dating any document by a date earlier than the one on which the document was originally drawn up. Under most circumstances, backdating is seen as fraudulent and illegal, although there are some situations in which backdating can be used in a legal and beneficial way, such as backdating a claim for a past period.

Backing Away   -   The act of a market maker failing to honor a posted bid or ask even though the price and quantity are valid.

Backlog   -   The total value of sales orders waiting to be filled.

Backorder Costs   -   A cost incurred by a business when it is unable to fill an order and must complete it later. A backorder cost can be discrete, as in the cost to replace a specific piece of inventory, or intangible, such as the effects of poor customer service. Backorder costs are usually computed and displayed on a per-unit basis.

Backpricing   -   A pricing method used in specific futures contracts whereby the price of the commodity to be delivered is priced by the purchaser at some future date after entering into the position.

Backspread   -   A type of options spread in which a trader holds more long positions than short positions. The premium collected from the sale of the short option is used to help finance the purchase of the long options. This type of spread enables the trader to have significant exposure to expected moves in the underlying asset while limiting the amount of loss in the event prices do not move in the direction the trader had hoped for. This spread can be created using either all call options or all put options.

Backstop Purchaser   -   An entity that agrees to purchase all the remaining, unsubscribed securities from a rights offering. The backstop purchaser provides security to the issuing firm by guaranteeing that all of the newly issued shares will be purchased, allowing the company to fulfill its fundraising requirements.

Backtesting   -   The process of testing a trading strategy on prior time periods. Instead of applying a strategy for the time period forward, which could take years, a trader can do a simulation of his or her trading strategy on relevant past data in order to gauge the its effectiveness. 
Most technical-analysis strategies are tested with this approach.

Backup Withholding   -   Tax that is levied on investment income, at an established tax rate, as the investor withdraws it. Backup withholding helps to ensure that government tax-collecting agencies (such as the IRS or Canada Revenue Agency) will be able to receive income taxes owed to them from investors' earnings. Backup withholding may be applied when an investor has not met rules regarding taxpayer identification numbers (TIN). At the time the investor withdraws his or her investment income, the amount mandated by the backup withholding tax is remitted to the government, providing the tax-collecting body with the required funds immediately, but leaving the investor with less short-term cash flow.

Backward Integration   -   A form of vertical integration that involves the purchase of suppliers in order to reduce dependency.

Backwardation   -   A theory developed in respect to the price of a futures contract and the contract's time to expire. Backwardation says that as the contract approaches expiration, the futures contract will trade at a higher price compared to when the contract was further away from expiration. This is said to occur due to the convenience yield being higher than the prevailing risk free rate.

Bad Check   -   A check drawn on a nonexistent account or on an account with insufficient funds to honor the check when presented. 
"Passing" bad checks is illegal, and the crime can range from a misdemeanor to a felony, depending on the amounts involved and whether the activity involved crossing state lines.

Bad Debt   -   A debt that is not collectible and therefore worthless to the creditor. This occurs after all attempts are made to collect on the debt. Bad debt is usually a product of the debtor going into bankruptcy or where the additional cost of pursuing the debt is more than the amount the creditor could collect. This debt, once considered to be bad, will be written off by the company as an expense.

Bad Debt Expense   -   An entry found on a business's income statement that represents the amount of noncollectable accounts receivable that occurs in a given period. In terms of accounting entries, every time an amount increases bad debt expense, an equivalent amount is credited to the business's allowance for bad debts.

Bad Debt Recovery   -   A debt from a loan, credit line or accounts receivable that is recovered either in whole or in part after it has been written off or classified as a bad debt. Because it generally generates a loss when it is written off, a bad debt recovery usually produces income.
In accounting, the bad debt recovery would credit the "allowance for bad debts" or "bad debt reserve" categories, and reduce the "accounts receivable" category in the books.

Bad Debt Reserve   -   An account set aside by a company to account for and offset losses that arise as a result of defaults from futures loans. This figure may be calculated based on historical norms or other known information about the relative safety of the debt. 
Also known as a "loss reserve".

Badwill   -   The negative effect felt by a company when shareholders and the investment community find out that is has done something that is not in accordance with good business practices. Although typically not expressed in a dollar amount, badwill can play out in the form of decreased revenue, loss of clients or suppliers, loss of market share and federal indictments for any crimes committed. 

Bag Holder   -   An informal investment term used to describe an investor who holds a position in a stock which decreases in value until it is worthless. Typically, the bag holder will hold the position for an extended period of time in which most of the investment is lost.

Bag Man   -   Any person in charge of organizing and collecting contributions to political parties or funds gathered for political reasons.

Bagel Land   -   A slang term that represents a stock or other security that is approaching $0 in price. Arriving in bagel land is usually the result of one or more major business problems that may not be resolvable. This term is typically used to describe an asset that has fallen from grace as opposed to a penny stock or other historically cheap security.

Bahrain Stock Exchange (BSE)   -   The stock exchange headquartered in Manama, Bahrain.

Bailout   -   A situation in which a business, individual or government offers money to a failing business in order to prevent the consequences that arise from a business's downfall. Bailouts can take the form of loans, bonds, stocks or cash. They may or may not require reimbursement. (One of the most used financial terms of the 2008 financial crisis, where several well known banks were bailed out by their respective governments).

Bailout Bond   -   A debt security issued by the Resolution Funding Corporation to bail out the savings and loan associations during the financial crisis of the late 1980s and early 1990s. The bailout bonds had zero-coupon Treasury bonds backing the principal amounts, making the instruments a safe investment.

Balance of Payments   -   A record of all transactions made between one particular country and all other countries during a specified period of time. BOP compares the dollar difference of the amount of exports and imports, including all financial exports and imports. A negative balance of payments means that more money is flowing out of the country than coming in, and vice versa.

Balance of Trade   -   The difference between a country's imports and its exports. Balance of trade is the largest component of a country's balance of payments. Debit items include imports, foreign aid, domestic spending abroad and domestic investments abroad. Credit items include exports, foreign spending in the domestic economy and foreign investments in the domestic economy. A country has a trade deficit if it imports more than it exports; the opposite scenario is a trade surplus. 
Also referred to as "trade balance".

Balance Reporting   -   A report by a bank to a customer, normally a company or organization, informing the customer of the balances in their accounts. These real-time reports are key to the customer's cash-management program, especially for companies with far-flung operations and banking relationships in many countries.

Balance Sheet   -   A financial statement that summarizes a company's assets, liabilities and shareholders' equity at a specific point in time. These three balance sheet segments give investors an idea as to what the company owns and owes, as well as the amount invested by the shareholders.
The balance sheet must follow the following formula:

        Assets = Liabilities + Shareholders' Equity

Each of the three segments of the balance sheet will have many accounts within it that document the value of each. Accounts such as cash, inventory and property are on the asset side of the balance sheet, while on the liability side there are accounts such as accounts payable or long-term debt. The exact accounts on a balance sheet will differ by company and by industry, as there is no one set template that accurately accommodates for the differences between different types of businesses.

Balanced Budget   -   A situation in financial planning or the budgeting process where total revenues are equal to or greater than total expenses. A budget can be considered balanced in hindsight, after a full year's worth of revenues and expenses have been incurred and recorded; a company's operating budget for an upcoming year can also be called balanced based on predictions or estimates.

Balanced Fund   -   A fund that combines a stock component, a bond component and, sometimes, a money market component, in a single portfolio. Generally, these hybrid funds stick to a relatively fixed mix of stocks and bonds that reflects either a moderate (higher equity component) or conservative (higher fixed-income component) orientation.

Balanced Investment Strategy   -   A portfolio allocation and management method aimed at balancing risk and return. Such portfolios are generally divided equally between equities and fixed-income securities.

Balanced Scorecard   -   A performance metric used in strategic management to identify and improve various internal functions and their resulting external outcomes. The balanced scorecard attempts to measure and provide feedback to organizations in order to assist in implementing strategies and objectives.

Balloon Interest   -   An increased coupon rate on the longer term maturity instruments within a serial bond issue. In a serial issue, bonds mature at different intervals, creating a string of short- to long-term instruments. Higher interest is earned on the long-term bonds, providing incentive to investors for holding the instrument for an increased period.

Balloon Loan   -   A type of loan which does not fully amortize over its term. Since it is not fully amortized, a balloon payment is required at the end of the term to repay the remaining principal balance of the loan.

Balloon Maturity   -   1. A repayment schedule for a bond issue where a large number of the bonds come due at a one time (normally at the final maturity date).
2. A final loan payment that is considerably higher than prior payments. This is also known as a "balloon payment."

Balloon Option   -   An option whose notional payments increase significantly after a set threshold is broken.

Balloon Payment   -   An oversized payment due at the end of a mortgage, commercial loan or other amortized loan. Because the entire loan amount is not amortized over the life of the loan, the remaining balance is due as a final repayment to the lender.
Balloon payments are often prepackaged into what are called "two-step mortgages." In this type of mortgage, the balloon payment is rolled into a new or continuing amortized mortgage at the prevailing market rates.
Balloon payments can occur within a fixed-rate or adjustable-rate mortgage (ARM).

Ballot   -   The documentation representing a shareholder's decision when a company's ownership group votes on corporate issues. Ballots are usually dispersed at annual meetings, when shareholders vote in the board of directors.

Baltic Dry Index - BDI   -   A shipping and trade index created by the London-based Baltic Exchange that measures changes in the cost to transport raw materials such as metals, grains and fossil fuels by sea. The Baltic Exchange directly contacts shipping brokers to assess price levels for a given route, product to transport and time to delivery (speed). 
The Baltic Dry Index is a composite of three sub-indexes that measure different sizes of dry bulk carriers (merchant ships) - Capesize, Supramax and Panamax. Multiple geographic routes are evaluated for each index to give depth to the index's composite measurement.
It is also known as the "Dry Bulk Index".

Bancassurance   -   A French term referring to the selling of insurance through a bank's established distribution channels.

Bandwidth   -   The data transfer capacity of a network. It is measured in bits per second.

Bank   -   A commercial institution licensed as a receiver of deposits. Banks are mainly concerned with making and receiving payments as well as supplying short-term loans to individuals.

Bank Administration Institute - BAI   -   A non-profit organization that focuses on improving banking standards (in the operations and auditing areas) while analyzing risks and promoting productivity-enhancing technology solutions. The BAI runs professional schools, conferences and individual programs. In addition to teaching, learning and development programs, it also operates a research affiliate.

Bank Bill Swap Bid Rate - BBSY   -   A benchmark interest rate quoted and dispersed by Reuters Information Service. The BBSY is typically used by financial institutions or corporations engaging in interest rate swaps and related transactions.

Bank Card   -   Any card issued against a depositary account, such as an ATM card or a debit card.  Sometimes the phrase is also used to refer to Visa and Mastercard, since these are also issued by banks, but they are credit cards and not linked directly to a depositary account.
Bank cards may be limited in their use, Some can only be used at ATM machines or for certain purchases.

Bank Card Association   -   An organization owned by financial institutions that licenses bank credit card programs. The Bank Card Association also performs operational functions for its members, including transaction processing and authorizations, interchange settlements and fee processing.

Bank Confirmation Letter   -   A letter confirming that a line of credit has been secured from a financial institution or bank. The bank confirms that a person is eligible for a specified amount of borrowed funds to be used for a predetermined purpose.

Bank Discount Basis   -   A quoting convention used by financial institutions when quoting prices for fixed-income securities sold at a discount, particularly U.S. Government issues. The quote is presented as a percentage of face value, and is determined by discounting the bond by using a 360-day-count convention, which assumes there are twelve 30-day months in a year. 
Also referred to as "discount yield".

Bank Draft   -   A type of check where the payment is guaranteed to be available by issuing bank. Typically, banks will review the bank draft requester's account to see if sufficient funds are available for the check to clear. Once it has been confirmed that sufficient funds are available, the bank effectively sets aside the funds from the person's account to be given out when the bank draft is used.

Bank Endorsement   -   An endorsement by a bank for a negotiable instrument, such as a banker's acceptance or time draft, that assures the counterparty that the bank will stand behind the obligations of the creator of the instrument.

Bank Fees   -   Many banks charge nominal fees for various services, such as requesting a deposit slip or counter check or notarizing a document. Bank fees generally constitute a major portion of revenue for the bank, particularly for regional and local branches.

Bank for International Settlements - BIS   -   An international organization fostering the cooperation of central banks and international monetary policy makers. Established in 1930, it is the oldest international financial organization, and was created to administer the transaction of monies according to the Treaty of Versailles. Among others, its main goals are to promote information sharing and to be a key center for economic research.

Bank Giro Transfer   -   A method of transferring money by instructing a bank to directly transfer funds from one bank account to another without the use of checks. Bank giro transfers are predominantly used in European countries such as Germany, Austria, the Netherlands and Sweden, where they are seen as an effective way for companies to receive payments from foreign customers.   
Also known as a "Giro credit".

Bank Guarantee   -   A guarantee from a lending institution ensuring that the liabilities of a debtor will be met. In other words, if the debtor fails to settle a debt, the bank will cover it.

Bank Holiday   -   Any business day during which commercial banks and savings & loans institutions are closed for business to the public, specifically at physical locations. These holidays usually coincide with a federal holiday in the United States, but each country defines is own bank holidays. 
Infrequently, a bank holiday can also refer to a day where there is an emergency bank closing to avert a bank run, such as what occured in Emergency Banking Act of 1933 during the Great Depression in the United States.

Bank Identification Number - BIN   -   The first four to six digits of a credit card. The bank identification number identifies the institution issuing the card. It is critical to the correct matching of transactions to the issuer of the charge card.
This prefix system also applies to debit cards, charge cards and electronic benefit cards.

Bank Insurance   -   A guarantee on a specified amount of deposits in a bank.

Bank Investment Contract   -   A security with an interest rate guaranteed by a bank. It provides a specific yield on a portfolio over a specified period.

Bank Letter of Credit Policy   -   An insurance policy that allows U.S. banks to confirm letters of credit issued by foreign financial institutions, facilitating the purchase of domestic exports. The policy was established by the Export-Import Bank of the United States and insures the domestic bank against the possible default of the foreign institution.

Bank Marketing Association   -   The publishing arm of the American Bankers Association, a trade association and lobbying group representing the US banking industry. The BMA publishes periodic newsletters on the subject of marketing financial services. 
Also known as the ABA Marketing Network.

Bank of Canada - BOC   -   The central bank of Canada, that came into existence after the passing of the Bank of Canada Act in 1935, influences the country's economy and money supply.

Bank of England - BoE   -   The UK's central bank, this institution acts as the Government's banker and advises it on monetary policy. It also issues bank notes, sets the interest rate at which it will lend money to other banks and manages the country's reserves of gold and foreign exchange.

Bank of Japan - BoJ   -   Headquartered in the business district of Nihonbashi in Tokyo, the Bank of Japan is the Japanese central bank. The bank is responsible for issuing and handling currency and treasury securities, implementing monetary policy, maintaining the stability of the Japanese financial system, and providing settling and clearing services.  
Like most central banks, the Bank of Japan also compiles and aggregates economic data and produces economic research and analysis.

Bank Panic of 1907   -   A financial crisis that arose near the beginning of the twentieth century as result of a plan to limit the popularity of trust companies. The banking industry was unsettled with the emerging successes of trusts companies, so they attempted to bring financial ruin to F. Augustus Heinze's Knickerbocker Trust in order to falter the public's favor in trust companies. Since the Knickerbocker Trust was unable to receive any financial support from other financial institutions to save itself from failure, the public started to fear that the banking and trust industries were experiencing liquidity issues and thus starting to perform bank runs.

Bank Rate   -   The rate at which central banks lend funds to national banks.

Bank Rate Monitor Index   -   An index of money market interest rates paid on deposits at 100 banks in the United States. The index is comprised of the average of interest rates paid on different types of consumer savings on deposit.

Bank Reconciliation Statement   -   A form that allows individuals to compare their personal bank account records to the bank's records of the individual's account balance in order to uncover any possible discrepancies.

Bank Restriction Act of 1797   -   An act passed by the British government in 1797 to free the central Bank of England from converting bank notes and other financial claims into gold. The act was created in response to the flood of paper money issued by the British government that resulted in an economic catastrophe.

Bank Run   -   A situation in which numerous bank customers try to withdraw their bank deposits simultaneously and the bank's reserves are not sufficient to cover the withdrawals.

Bank Secrecy Act   -   Government legislation that was created in 1970 to prevent financial institutions from being used as tools by criminals to hide or launder their ill-gotten gains. This is achieved by requiring banks and other financial institution to provide documentation (such as currency transaction reports) whenever clients deal with transactions that involve substantial sums of money ($10,000 or more) that appear to be suspicious. This way, authorities have the ability to easily reconstruct the entire situation.
Also known as "Currency and Foreign Transactions Reporting Act".

Bank Statement   -   A record, usually sent to the account holder once per month, summarizing all transactions in an account during the time from the previous statement to the current statement. The opening balance from the prior month combined with the net of all transactions during the period should result in the closing balance for the current statement.

Bank Wire   -   An electronic message system allowing major banks to communicate various actions or occurrences regarding client accounts. The wire represents a secure computerized messaging system that sends account information, notifications and transaction requests between banks.

Bank-Owned Life Insurance - BOLI   -   A form of life insurance purchased by banks where the bank is the beneficiary, and/or owner. This form of insurance is a tax shelter for the administering bank, as it is a tax-free funding scheme for employee benefits.

Bankable Funds   -   Forms of payment that are accepted at financial institutions. Retailers and other organizations that directly accept payments from customers typically request that any payments be made in forms that can be redeemed and accepted by the bank.

Banker's Acceptance   -   A short-term credit investment created by a non-financial firm and guaranteed by a bank.

Banking Department   -   A state-specific regulatory body that oversees the operations of financial institutions within its jurisdiction. The primary responsibility of the banking department is to ensure that the financial system is accessible, stable and safe for all consumers.

Bankmail   -   An agreement made between a company planning a takeover and a bank, which prevents the bank from financing any other potential acquirer's bid.

Banknote   -   A negotiable promissory note issued by a bank and payable to the bearer on demand. The amount payable is stated on the face of the note. Banknotes are considered legal tender, and, along with coins, make up the bearer forms of all modern money. 
Also known as a "bill" or a "note."

Bankruptcy   -   A legal proceeding involving a person or business that is unable to repay outstanding debts. The bankruptcy process begins with a petition filed by the debtor (most common) or on behalf of creditors (less common). All of the debtor's assets are measured and evaluated, whereupon the assets are used to repay a portion of outstanding debt. Upon the successful completion of bankruptcy proceedings, the debtor is relieved of the debt obligations incurred prior to filing for bankruptcy.

Bankruptcy Financing   -   Financing arranged by a company while under the chapter 11 bankruptcy process. Clearly, such financing is extremely high risk and is done at a relatively high interest rate.

Bankruptcy Risk   -   The risk that a company will be unable to meet its debt obligations. Often referred to as "default" or "insolvency risk".

Bankruptcy Trustee   -   A person appointed by the United States Trustee, an officer of the Department of Justice, to represent the debtor's estate in a bankruptcy proceeding. 
Although a bankruptcy judge has the ultimate authority on the distribution of assets, the trustee is charged with evaluating and making recommendations about various debtor demands in accordance with the U.S. Bankruptcy Code.

Banner Advertising   -   A common form of advertising on the internet. The banner is an advertisement of 460x68 pixels, usually placed at the top of the page.

Baptism of Fire   -   A difficult situation that a company or individual experiences that will result in either success or failure. Examples include Initial Public Offerings (IPOs), a new CEO hired to manage a struggling company, and hostile takeover attempts.

Barack Obama   -   The first African American to be elected as President of the United States of America. He beat John McCain in a landslide victory in the November 2008 Presidential election. Joe Biden will be Barack Obama's Vice President.

Barriers to Entry   -   The existence of high start-up costs or other obstacles that prevent new competitors from easily entering an industry or area of business. Barriers to entry benefit existing companies already operating in an industry because they protect an established company's revenues and profits from being whittled away by new competitors.

Base Rate   -   The rate of interest used by banks to calculate the interest they will charge on money that they lend to customers. The base rate reflects how much it costs the institutions to obtain funds, so it is linked to the interest rate set by the Bank of England.

BCG Growth Share Matrix   -   A graphical approach to resource allocation within a multi-segmented corporation.

Bear   -   A dealer on the Stock Exchange who expects share prices to fall. A bear market is one where prices are dropping because more people are selling than buying.

Beating The Gun   -   A slang phrase used when an investor purchases or sells a security at a beneficial price by executing a trade before the market can respond to new information. Beating the gun denotes an investor's ability to time the market and react more quickly than other investors.

Berkshire Hathaway   -    A holding company for a multitude of businesses run by Chairman and CEO Warren Buffett. Berkshire Hathaway is headquartered in Omaha, Nebraska and began as just a group of textile milling plants, but when Buffett became the controlling shareholder in the mid 1960s he began a progressive strategy of diverting cash flows from the core business into other investments.
Insurance subsidiaries tend to represent the largest pieces of Berkshire Hathaway, but the company manages hundreds of diverse businesses all over the world.

Best of Breed   -   A stock that represents the most optimal investment choice for a specific sector or industry due to its high quality compared to its competitors. This slang is derived from dog shows, where the highest quality dog for each breed wins an award and is given the "best of breed" title.

Bid   -   The price at which a market maker will buy shares.

Bid Whacker   -   A slang term for an investor who sells shares at or below the bid price. This is considered outside the norm, as sellers normally settle for a price between the bid and ask quotes.

Big Board   -   A nickname for the New York Stock Exchange.

Big Box Retailer   -   A retail store that occupies an enormous amount of physical space and offers a variety of products to its customers. These stores achieve economies of scale by focusing on large sales volumes. Because volume is high, the profit margin for each product can be lowered, which results in very competitively priced goods.

Big Mac PPP   -   A survey done by The Economist that determines what a country's exchange rate would have to be for a Big Mac in that country to cost the same as it does in the United States. Purchase power parity (PPP) is the theory that currencies adjust according to changes in their purchasing power. With the Big Mac PPP, purchasing power is reflected by the price of a McDonald's Big Mac in a particular country. The measure gives an impression of how overvalued or undervalued a currency is.

Big Uglies   -   Old industrial companies in gritty industries (such as mining, steel and oil) and as a result, they tend to be unpopular stocks with investors.

Biodiesel   -   A fuel derived from organic oils, such as vegetable oil, rather than petroleum. Biodiesel’s use and production are increasing. It’s typically used for aircraft, vehicles and as heating oil. Biodiesel filling stations are common throughout Europe and as of 2008 they are becoming more common in North America.
The price gap between traditional diesel and biodiesel is expected to narrow, as petroleum based products become scarcer. Agricultural and environmental subsidies will also help with this.

Black Friday   -   1. A day of stock market catastrophe. Originally, September 24, 1869, was deemed Black Friday. The crash was sparked by gold speculators, including Jay Gould and James Fist, who attempted to corner the gold market. The attempt failed and the gold market collapsed, causing the stock market to plummet. 
2. The day after Thanksgiving in the United States. Retailers generally see an upward spike in sales and consider this to be the start of the holiday shopping season. It's common for retailers to offer special promotions and to open early to draw in customers. Note : The term "black" has been used to describe other disastrous days in financial markets. For example, on Black Tuesday, October 29, 1929, the market fell precipitously, signaling the start of the Great Depression. The largest one-day drop in stock market history occurred on Black Monday, October 19, 1987, when the Dow Jones Industrial Average plummeted more than 22%.

Black Knight   -   A company that makes a hostile takeover offer on a target company.

Black Market   -   A type of economic activity that takes place outside of government-sanctioned channels.  Black-market transactions typically occur as a way for participants to avoid government price controls or taxes, conducting transactions 'under the table'. The black market is also the means by which illegal substances or products - such as illicit drugs, firearms or stolen goods - are bought and sold.

Black Swan   -   An event or occurrence that deviates beyond what is normally expected of a situation and that would be extremely difficult to predict. This term was popularized by Nassim Nicholas Taleb, a finance professor and former Wall Street trader.

Blind Pool   -   A limited partnership or stock offering with no stated investment goal for the funds that are raised from investors. In a blind pool, money is raised from investors, usually trading on the name of a particular individual or firm, but few restrictions or safeguards are in place for investor security.  
May also be called "blank check underwriting" or a "blank check offering".

Blitzkrieg Tender Offer   -   A takeover offer that is intended to be so attractive that very few objections will arise and the takeover will occur swiftly. In German, "blitz" means lightning and "krieg" means war. Thus, a blitzkrieg (lightning war) refers to a surprise offensive that is both powerful and swift and was used to describe World War II bombing raids.

Blue Chip Swap  -   When a domestic investor purchases a foreign asset and then transfers that asset to a domestic bank branch located offshore. Then, the funds from the foreign asset are transfered into a bank account in the domestic country. The domestic investor usually has a partner transferring assets to the foreign branch on his or her behalf.

Blue Ocean   -   A slang term for the uncontested market space for an unknown industry or innovation. Coined by professors W. Chan Kim and Renee Mauborgne in their book "Blue Ocean Strategy: How to Create Uncontested Market Space and the Make Competition Irrelevant" (2005), blue oceans are associated with high potential profits.

Bo Derek   -   A slang term used to describe a perfect investment. Named after the actress Bo Derek who starred in the film "10" about a woman with the perfect body.

Bogey   -    A buzzword that refers to a benchmark used to evaluate a fund's performance. The benchmark is an index that reflects the investment scope of the funds investment. Comparing a fund's performance to a benchmark index gives investors an idea of how well the fund is doing compared to the market.

Bonds   -   A long-term loan certificate or IOU, issues by governments and companies, which is sold to raise funds.

Bonus Issue   -   An offer of free additional shares to existing shareholders. A company may decide to distribute further shares as an alternative to increasing the dividend payout.
Also known as a "scrip issue" or "capitalization issue".  Example: If Shareholder holds 100 shares in XYZ Co. and the company issue a 1 for 1 bonus issue, the shareholder will receive an extra 100 shares.

Boomerang   -   An American slang term that refers to an adult who has moved back in with his or her parents (who are part of the baby boomer generation) instead of living independently. The phrase, when applied to an individual, makes reference to the fact that the person lived independently for a period, but subsequently returned home due to the financial costs associated with maintaining a separate household.

Boomernomics   -   An investing strategy that involves buying equities directly related to the spending behavior of baby boomers (people born between 1946 and 1964).

Boon   -   A general term that refers to a benefit or improvement for investors. This can include such things as increased dividends, a stock market rally and stock buybacks.

Booster Shot   -   The name given to the first formal recommendation report issued by an underwriter for an IPO. It is presented in the process of the public offering.

Boston Snow Indicator   -   A market theory that states that a white Christmas in Boston will result in rising stock prices for the following year. For example, in Christmas of 1995, Boston received some snow and the following year, the S&P 500 increased by more than 20%.

Bottom Fisher   -   An investor who looks for bargains among stocks whose prices have recently dropped dramatically. The investor believes that a price drop is temporary or is an overreaction to recent bad news and a recovery is soon to follow.

Bottom-Up Investing   -   An investment approach that de-emphasizes the significance of economic and market cycles. This approach focuses on the analysis of individual stocks. In bottom-up investing, therefore, the investor focuses his or her attention on a specific company rather than on the industry in which that company operates or on the economy as a whole.

Bracket Creep   -   A situation where inflation pushes income into higher tax brackets. The result is an increase in income taxes but no increase in real purchasing power.

Brain Drain   -   A slang term for a significant emigration of educated or talented individuals. A brain drain can result from turmoil within a nation, from there being better professional opportunities in other countries or from people seeking a better standard of living.

Brazil Russia India & China (BRIC)   -   An acronym for the economies of Brazil, Russia, India and China combined. The general consensus is that the term was first prominently used in a Goldman Sachs report from 2003, which speculated that by 2050 these four economies would be wealthier than most of the current major economic powers.

Break Issue   -   A type of stock initial public offering (IPO) that trades below the original offering price to the market within the first few months after trading begins. A break issue can be the result of poor market conditions as a whole, industry concerns or lack of demand in the new issue itself.

Broke the Buck   -   When a money market mutual fund's net asset value (NAV) drops below $1 per share. Money market funds aren't federally insured like bank deposits; therefore, fund assets have an implied promise to preserve capital at all costs and preserve the $1 floor on share prices. These funds are regulated by the Securities and Exchange Commission and Rule 2a-7 restricts what they can invest in based on credit quality and maturities with the hope of ensuring principal stability. (Note :  Most if not all Money Market funds are required to produce a weekly Mark-to-Market Report showing the value of their holdings based on the realisable market value of those securities. On a daily valuation however these securities are priced on an amortised basis. In exceptional circumstances the accounting methodology may change, and a mark-to market valuation is applied, usually leading to the fund "breaking the buck").

Bubble   -   1. An economic cycle characterized by rapid expansion followed by a contraction.
2. A surge in equity prices, often more than warranted by the fundamentals and usually in a particular sector, followed by a drastic drop in prices as a massive selloff occurs.
3. A theory that security prices rise above their true value and will continue to do so until prices go into freefall and the bubble bursts.

Buck   -   1. Trader's slang for a million dollars. 2. Informal reference to one dollar.

Buck the Trend   -   When a security or a class of assets sees its market-driven price move in the opposite direction of the broad market or its competition. The move could be in either direction, but generally occurs as a result of good performance in the face of negative broad market performance.  

The meaning is often extrapolated out from just asset prices to business and market fluctuations. If a company is recording increased sales while its competitors lose business, that company would be "bucking the trend".

Bucket Shop   -   1. A fraudulent brokerage firm that uses aggressive telephone sales tactics to sell securities that the brokerage owns and wants to get rid of. The securities they sell are typically poor investment opportunities, and almost always penny stocks.
2. A brokerage that makes trades on a client's behalf and promises a certain price. The brokerage, however, waits until a different price arises and then makes the trade, keeping the difference as profit.

Bucketing   -   A situation where, in an attempt to make a short-term profit, a broker confirms an order to a client without actually executing it. A brokerage which engages in unscrupulous activities, such as bucketing, is often referred to as a bucket shop.

Bulge   -   A slang term used to describe a rapid advance in prices within the commodities market.

Bulge Bracket   -   A slang term used to describe the company or companies who issued the largest amount of securities on a new issue in an underwriting syndicate, or who are the largest underwriting company or companies in the industry.
The bulge bracket is usually the first group listed on the tombstone, which is an advertisement of a new issue.

Bull   -   An investor who thinks the market, a specific security or an industry will rise.

Bull Market   -   A financial market of a group of securities in which prices are rising or are expected to rise. The term "bull market" is most often used to refer to the stock market, but can be applied to anything that is traded, such as bonds, currencies and commodities.

Bulldog Market   -   A slang term for the stock market in the United Kingdom. Bulldog market is usually used by non-U.K. residents. It is an allusion to the Great Britain's famous pooch the British bulldog.

Bullet   -   1) A one-time lump-sum repayment of an outstanding loan, typically made by the borrower after very little, if any, amortization of the loan. This can also refer to a loan that requires a disproportionately large portion (or even all) of the loan to be repaid at maturity.
2) A slang term for a letter of rejection sent to a job applicant, informing the candidate that he or she has not been offered the job, has been denied an interview or some similar form of rejection.

Bullpen   -   A slang term referring to the traditional seating arrangement of younger investment advisors or brokers in a brokerage house.

Bunching   -   The combining of odd-lot or round-lot orders for the same security so that they may be executed at the same time.

Burgernomics   -   An economics term made popular by the Big Mac Index published by The Economist. Burgernomics makes reference to the idea of the Big Mac PPP, which examines the purchasing power parity between nations, using the cost of a Big Mac as the benchmark.

Burn Rate   -   The rate at which a new company uses up its venture capital to finance overhead before generating positive cash flow from operations. In other words, it's a measure of negative cash flow. `

Busted Convertible Security   -   A convertible security that is trading well below its conversion value. The result is that the security is valued as regular debt because there is very little chance that it will ever reach the convertible price before maturity.

Buttonwood Agreement   -   The Buttonwood Agreement , which took place on May 17, 1792, started the New York Stock & Exchange Board (now called NYSE, or New York Stock Exchange). This agreement was signed by 24 stock brokers outside of 68 Wall Street in New York under a buttonwood tree.

Buy Side   -   The side of Wall Street comprising the investing institutions such as mutual funds, pension funds and insurance firms that tend to buy large portions of securities for money-management purposes. The buy side is the opposite of the sell-side entities, which provide recommendations for upgrades, downgrades, target prices and opinions to the public market. Together, the buy side and sell side make up both sides of Wall Street.

Buy The Dips   -   A slang phrase regarding the practice of purchasing stocks following a decline in prices. After a significant dip in the price of a security or stock index, investors should increase positions or purchase different stocks to capitalize on what is seen as an eventual upswing.

Buydown   -   A mortgage-financing technique with which the buyer attempts to obtain a lower interest rate for at least the first few years of the mortgage, but possibly its entire life. The builder or seller or the property usually provides payments to the mortgage-lending institution, which, in turn, lowers the buyer's monthly interest rate and therefore monthly payment. The home seller, however, increases the purchase price of the home to compensate for the costs of the buydown agreement.