Lady Godiva Accounting Principles (LGAP)   -    A theoretical set of accounting principles under which corporations would have to fully disclose all information, including that which often doesn't get reported to investors under generally accepted accounting principles (GAAP).
These principles include disclosure of the following:
-all off-balance sheet items
-how new goodwill accounting rules (introduced in 2002) impact earnings per share (EPS)
-the impact on EPS of stock options issued in lieu of salaries
-how pension expenses are accounted for

Lady MacBeth Strategy   -   A corporate-takeover strategy with which a third party poses as a white knight to gain trust, but then turns around and joins with unfriendly bidders.

Lame Duck   -   A person who has defaulted on his or her debts or has gone bankrupted due to the stock market. The financial use of the term is most commonly used in Europe.

Last In, First Out (LIFO)   -    An asset-management and valuation method that assumes that assets produced or acquired last are the ones that are used, sold or disposed of first.

Late-Day Trading   -   An unethical (if not illegal) practice of a hedge fund purchasing and then selling securities (usually shares of a mutual fund) after the close of a trading day, but making the transactions appear as though they occurred before the market close.

Leading Lipstick Indicator   -   An indicator based on the theory that a consumer turns to less expensive indulgences, such as lipstick, when she (or he) feels less than confident about the future. Therefore, lipstick sales tend to increase during times of economic uncertainty or a recession.

Leakage   -   A release of information to certain people before the official public announcement.

Legacy Costs   -   The costs involved with a company paying increased healthcare fees and other benefit-related costs for its current employees and retired pensioners. It is believed that escalating legacy costs can be a very large contributing factor towards limiting a company's competitiveness.

Legislative Overkill   -   A law enacted to stop or prevent the abuse of a loophole, but ends up imposing more restrictions than are necessary for reasonable prevention.

Lemming   -   The act of following the crowd into an investment that will inevitably head for disaster.

Lemon   -   A very disappointing investment. Your expected return wasn't even close to being achieved.

Leprechaun Leader   -   A corporate manager or an executive who, like the fabled Irish elf, is a mischievous and elusive creature said to possess buried treasures of money and gold.

Let Your Profits Run   -   A saying often used in investing that acknowledges the tendency among investors to sell winning positions too early. Most traders tend to take gains off the table early out of fear that they will evaporate quickly, while they also tend to hold onto large losing positions in the hope that they will turn around. The key to letting your profits run is to not panic when volatility increases and to maintain your convictions about why you entered into the trade.

Letter Security   -   A security that is not registered with the SEC, and so cannot be sold publicly in the marketplace.

Level 3 Assets   -   Assets whose fair value cannot be determined by using observable measures, such as market prices or models. Level 3 assets are typically very illiquid, and fair values can only be calculated using estimates or risk-adjusted value ranges. In addition to Level 1 and Level 2 assets (both of which have more accurate fair values), Level 3 assets must be reported on by all publicly traded companies as of 2008.

Limit Up / Limit Down   -   Some markets have built in "circuit breakers" that halt trading if a certain level has been reached. If a markets breaches this level on the way up it is called "Limit Up". On the way down it is called "Limit Down". The reasoning around this halt in trading is to help calm the markets in the hope that panic selling/buying can be averted. These "circuit breakers" are most commonly seen in commodity markets, although the Stock market saw such a move on Friday 24th October, when the Dow Jones, S&P 500 and Nasdaq markets were halted limit down.

Lindsay Lohan Stock Index   -   A stock index comprised of companies associated with actress Lindsay Lohan. Investors might correlate the popularity of Lohan with increased sales surrounding her related products. Firms involved with Lohan endorsements, advertising or movies are included in the index.

Little Board   -   A slang term primarily referring to the American Stock Exchange (AMEX). It can also describe any exchange that is not the New York Stock Exchange (NYSE). Little board was originally used to refer to the New York Consolidated Stock and Petroleum Exchange, which closed its doors in the 1920s.

Loan Shark   -   A person or entity that charges borrowers interest above an established legal rate. Depending on where a person lives, lenders typically cannot charge more than 60% interest per annum. A loan shark, then, would be someone who illegally charged interest over the state's legal limit, which could range up to, or even over, 100%.

Lobster Trap   -   A strategy used by a target firm to prevent a hostile takeover. In a lobster trap, the company passes a provision preventing anyone with more than 10% ownership from converting convertible securities into voting stock.

Lockdown   -   A specified period when an employee of a public company is barred from selling - and occasionally buying - his or her company's stock.

Locked Market   -   A short-term situation occurring within a market where both the bid and ask are identical, resulting in no bid-ask spread.

Long Jelly Roll   -   An option strategy that aims to profit from a time value spread through the sale and purchase of two call and two put options, each with different expiration dates.

Longevity Risk   -   The risk to which a pension fund or life insurance company could be exposed as a result of higher-than-expected payout ratios. Increasing life expectancy trends among policy holders and pensioners can result in payout levels that are higher than what a company or fund originally accounts for. The types of plans exposed to the greatest levels of longevity risk are defined-benefit pension plans and annuities, which guarantee lifetime benefits for policy or plan holders.

Loose Credit   -   The practice of making credit easy to come by, either through relaxed lending criteria or by lowering interest rates for borrowing. Loose credit often refers to central banking monetary policy and whether it is looking to expand the money supply (loose credit) or contract it (tight credit).
Loose credit environments may also be called "accommodative monetary policy" or "loose monetary policy".

Losing Your Shirt   -   In the investment world, this expression is used to describe a very bad investment that causes an investor to lose everything he or she has invested (and more, in some cases).

Loss Leader Strategy   -   A business strategy in which a business offers a product or service at a price that is not profitable for the sake of offering another product/service at a greater profit or to attract new customers. This is a common practice when a business first enters a market; a loss leader introduces new customers to a service or product in the hope of building a customer base and securing future recurring revenue.

Loss Management   -   A business practice that seeks to detect, identify, investigate and prevent events that cause a drop in value of any of an organization's revenues, assets and services. Loss-management improvements may involve changes in a business's operating policies and business model in order to limit instances of accidental and/or intentional loss.

Love Money   -   Seed money or capital given by family or friends to an entrepreneur to start a business. The decision to lend money and the terms of the agreement are usually based on qualitative factors and the relationship between the two parties, rather than on a formulaic risk analysis.