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Backing away
Balance of payments
Balance of trade
Balance sheet
BAN
Bankers' acceptances
Basis
Basis book
Basis points
Bearer
Bear market
Bear Spreads
Best-efforts underwriting
Beta
Bid price
Blanket fidelity bond
Block trade
Blue Chip Stocks
Blue List
Blue List Total
Blue Skying
Blue Sky Laws
Board Broker
Bond
Bond Anticipation Note
Bond Buyer
Bond Index
Bond Swap
Book entry
Book value
BP option
Branch office
Breadth of the Market
Breakeven Point
Breakpoint
Breakpoint sale
Broker
Broker/Dealer
Broker's broker
Bull market
Bull spread
Bunching
Business cycle
Buyer's option
Buying power
Buy stop

Backing away: The illegal practice of publishing a quote that a firm has no intention of honoring.

Balance of payments: A summary statement comparing the money coming into a country with the amount of money leaving the country for one period of time. Usually divided into the current account (showing imports and exports of goods and services), the capital account (showing movement of investments), and gold (showing movement of gold). The statement uses double-entry bookkeeping, which ensures that though individual categories may have a deficit or surplus, the overall statement must not.

Balance of trade: The net difference in imports and exports of goods by a country for a period of time. (Note: This is not the same as the change in the current account portion of the balance of payments, since the current account also includes imports and exports of services.) More exports than imports produce what is generally considered a favorable balance of trade, while the reverse is generally considered unfavorable.

Balance sheet: A financial report of a corporation, showing the corporation's assets, liabilities, and stockholders' equity at a point in time (usually month-end, quarter-end, or year-end).

BAN: See Bond Anticipation Note.

Bankers' acceptances: A short-term instrument used to finance import/export activities. Usually sold at a discount.

Basis: The cost or book value of an investment. The gain or loss on an investment is the sale price less the basis. Basis is often called "cost basis."

Basis book: A series of tables used to determine the dollar price of a serial municipal bond issue (quoted on a yield to maturity basis), or to determine the yield to maturity on a term bond (quoted in the same manner as corporate bonds).

Basis points: 0.01% in yield. Increasing from 5.00% to 5.05%, the yield increases by five basis points.

Bearer: Certificates (usually bonds) that are not registered in the holder's name, but are payable to the presenting party when due.

Bear market: A situation in a market for investments in which price trends are generally downward.

Bear Spreads: An options spread position that is profitable when the stock price decreases. The position is characteristically entered by purchasing a high strike price option and selling a low strike price option.

Best-efforts underwriting: Underwriting without a guarantee to the issuer to sell the securities. The underwriters act as brokers.

Beta: A statistical measurement correlating a stock's price change with the movement of the stock market.

Bid price: The highest price a buyer of a security is willing to pay for a unit of the security at a particular time.

Blanket fidelity bond: Insurance brokerage firms are required to carry to protect customers from the dishonesty or carelessness of brokerage employees and officers. Covers loss of money or securities, forgery, and fraudulent trading. The amount of coverage required is linked to the firm's required net capital under SEC Rule 15c3-1. The minimum bond allowed for all categories is $25,000.

Block trade: A trade of a large number of shares, usually 10,000 shares or more.

Blue Chip Stocks: Stocks of strong, well established corporations with a history of paying dividends in good and bad times.

Blue List: A listing of municipal bonds offered for sale in the secondary market.

Blue List Total: The total par value of the bonds offered for sale on the Blue List. This is a measure of the secondary market for municipal bonds.

Blue Skying: The process of registering a new issue with the states.

Blue Sky Laws: State securities laws. The name is derived from a court decision in which a state judge held that a particular offering had "no more substance than the blue sky above."

Board Broker: The employee of the CBOE who maintains the public limit order file, which is similar to a specialist's book, and executes limit orders for customers. Also known as an Order Book Official, or OBO.

Bond: A long-term debt instrument issued by a corporation or government entity. The bondholder loans the issuer money and the issuer promises to pay the bondholder interest at a specified rate on the loan for a specified period of time and then to repay the loan at expiration. The bondholder is a creditor of the issuer rather than a partial owner.

Bond Anticipation Note: A short-term municipal note issued in advance of long-term bond financing, commonly referred to as a BAN. The BAN is repaid from the proceeds of the bond issue. BANs are normally general obligations of the issuer.

Bond Buyer: A publication which contains news of interest to the municipal bond market; also contains worksheets designed to assist syndicates in preparing their bids for an offering.

Bond Index: An index of 20 high quality, general obligation municipal bonds, also known as the 20 Bond Index.

Bond Swap: Selling municipal bonds (usually at a loss) and using the proceeds to buy other municipal bonds, to establish a loss for tax purposes, to diversify a portfolio, to increase cash flow, or increase yield. Also known as tax swaps.

Book entry: A bond registration procedure in which the bondholder does not receive the physical certificates held by a depository. The depository maintains ownership records and forwards interest payments.

Book value: The value of a corporation's assets or liabilities on its balance sheet. Assets are valued at their original purchase price less any depreciation taken for accounting purposes. The book value of common stock is the corporation's assets less its liabilities and the liquidation value of its preferred stock. Book value may have little relationship to market value.

BP Option: "BP" is the abbreviation for the British Pound. An option to buy or sell British Pounds.

Branch office: Any location identified to the public as a location where an NASD member conducts investment banking or securities business. However, telephone directories, business cards, etc. may refer to a non-branch, as long as they also give the address and telephone number of the branch office or office of supervisory jurisdiction that supervises the non-branch.

Breadth of the Market: See Advance/Decline Ratio.

Breakeven Point: The point beyond which a trade begins to be profitable. Up to this point, it is a losing trade.

Breakpoint: A purchase amount that qualifies for a reduced sales charge for mutual funds.

Breakpoint sale: The prohibited practice of selling mutual fund shares in an amount just under a breakpoint (usually within $1,000 of a breakpoint) to earn more commissions.

Broker: See Agent.

Broker/Dealer: A brokerage firm.

Broker's broker: A municipal securities firm that acts as broker for other firms. Broker's brokers do not deal with customers and do not trade their own accounts.

Bull market: A situation in a market for investments in which price trends are generally upward.

Bull spread: An options spread position that is profitable if the stock price rises. The position is characterized by a low strike price for the long position and a high strike price for the short position.

Bunching: Combining two or more odd lot orders into one order for a round lot.

Business cycle: A recurring cycle of economic conditions starting with credit expansion, economic activity becoming feverish, then depressed. Recovery occurs when the malinvestments and maladjustments have been corrected.

Buyer's option: A contract giving the buyer the right to specify a later date on which to settle the trade. The specified date must be from six business days to sixty calendar days after the trade date.

Buying power: In a margin account, the dollar amount of securities the customer may purchase without making a cash deposit. The buying power in an account is a function of the SMA (which see).

Buy stop: An order to buy a security if it trades at or above a trigger price. Often used to limit a loss or protect a profit in a short stock position.