Super Finance Glossary

Over 10,000 financial glossary terms...

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Browsing by the letter "D"

Displaying next 100 results of 536
Deductible
Definition: An amount or period which must be deducted before an insurance payout or settlement is calculated.
Deductible Contribution
Definition: Amount paid into an IRA, an employer-sponsored retirement plan, or other type of retirement plan for a particular tax year that is a deduction from income for tax purposes.
Deduction
Definition: An expense that is allowable as a reduction of gross taxable income by the IRS e.g., charity donations.
Deductive Reasoning
Definition: Using known facts to draw a conclusion about a specific situation.
Deep In The Money
Definition: A call option with an exercise price substantially below the underlying stock's market price. Also put option with an exercise price substantially above the underlying stock's market price. Often substantially below is defined as more than one strike price below (for calls)/above (for puts) the current value of the underlying security.
Deep Out Of The Money
Definition: A call option with an exercise price substantially above the market price. Also put option with an exercise price substantially below the underlying stock's market price. Often substantially below is defined as more than one strike price below (for calls)/above (for puts) the current value of the underlying security.
Deep-discount Bond
Definition: A bond issued with a very low coupon or no coupon that sells at a price far below par value. A bond that has no coupon is called a zero-coupon bond.
Default (Failure To Pay)
Definition: The failure to make timely payment of interest or principal on a debt security or to otherwise comply with the provisions of a bond indenture. A breach of a covenant. In context of project financing, a technical default signals a project parameter is outside defined or agreed limits or a legal matter is not yet resolved.
Default (Futures Contract)
Definition: Failure to perform on a futures contract as required by exchange rules, such as failure to meet a margin call, or to make or take delivery.
Default Interest
Definition: A higher interest rate payable after default.
Default Premium
Definition: A differential in promised yield that compensates the investor for the risk inherent in purchasing a corporate bond that entails some risk of default. Often the premium is measured as the yield over and above a government bond yield of similar coupon and maturity.
Default Risk
Definition: The risk that an issuer of a bond may be unable to make timely principal and interest payments. Also referred to as credit risk (as gauged by commercial rating companies).
Defeasance
Definition: The setting aside by a borrower of cash or bonds sufficient to service the borrower's debt. Both the borrower's debt and the offsetting cash or bonds are removed from the balance sheet. In securities trading, where a clearing house becomes counterparty to each side of a trade, after the trade has been agreed. This is necessary to facilitate netting, and reduce counterparty risk exposure. The term has become popular recently, because of the growth of central counterparty clearing services in European cash equities markets.
Defensive Securities
Definition: Low-risk stocks or bonds that will provide a predictable and safe return on an investor's money.
Deferred Account
Definition: A type of account that delays taxes on that account until some later date. An example is an IRA account.
Deferred Annuities
Definition: Tax-advantaged life insurance products. Deferred annuities offer deferral of taxes with the option of withdrawing one's funds in the form of a life annuity.
Deferred Call
Definition: A provision that prohibits the company from calling the bond before a certain date. During this period the bond is said to be call protected.
Deferred Charge
Definition: An expenditure treated as an asset that carries forward until it becomes pertinent to the business at hand, e.g., the underwriting fees on a corporate bond issue, which the corporation capitalizes as a deferred charge and then amortizes over the life of the bond issue.
Deferred Compensation
Definition: An amount that has been earned but is not actually paid until a later date, typically through a payment plan, pension, or stock option plan.
Deferred Equity
Definition: A common term for convertible bonds, which recognizes their equity component and the expectation that the bond will ultimately be converted into shares of common stock.
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