Glossary beginning with B

B

Basis point

One-hundredth of a percentage point (0.01%). For example, the difference between 5.25% and 5.50% is 25 basis points.

Australian Securities Exchange

Bear market

A term to describe a market of declining prices. See also Bull market.

NYSE Euronext

Benchmark

Standard gauge against which the performance of a given security can be measured. Indices are often used as a benchmark.

NYSE Euronext

Beta

A measure of the volatility of a stock relative to the overall market. A beta of less than one indicates lower risk than the market; a beta of more than one indicates higher risk than the market. It is important to choose the right index to measure the overall market performance.

NASDAQ OMX

Bid

The price at which a trader or market maker is willing to buy. See also Ask and Spread.

NYSE Euronext

Blue chip

A term used to describe large, well-known companies that offer stable earnings and consistent dividend record. Blue-chip companies are reputed to be reliable investments.

London Stock Exchange

Bond

Bonds are fixed-income financial instruments, issued by governments, local authorities and state-owned or private organizations. They may be listed or traded in one or several exchanges, and ensure predetermined levels of returns in the form of interest rate. Interest rates may remain fixed throughout the bond’s life or vary according to the bond’s terms of listing.

WFE

Broker

An individual or firm, acting as agent, that exectutes orders to buy or sell on behalf of a client. A broker  charges a commission for his service and must be a registered member of the exchange where the securities are traded.

WFE

Bull market

A condition of the stock market when prices of stocks are generally rising. See also Bear Market.

NYSE Euronext