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Back-end Load

A sales charge, also known as a "deferred sales charge," investors pay when they redeem (sell) mutual fund shares. Funds generally use these to compensate brokers.

Banking Regulators

The SEC routinely receives questions and complaints from investors about the investment products they have purchased. But not all investments are considered securities under the securities laws. For…

Bankruptcy

Filing for protection under the federal bankruptcy laws can help companies make plans to repay their debts.  A bankrupt company might use Chapter 11 of the Bankruptcy Code to reorganize its business…

Bankruptcy for a Public Company

A company may decide to declare bankruptcy when it suffers from crippling debt.  Federal bankruptcy laws govern how the assets and business of a company will be used to clear its debts. There are…

Basis Point

One one-hundredth (.01) of a percentage point. For example, eight percent is equal to 800 basis points.

Bear Market

A time when stock prices are declining and market sentiment is pessimistic. Generally, a bear market occurs when a broad market index falls by 20% or more over at least a two-month period.

Beneficial Owner

A beneficial owner holds stocks indirectly, for example, through a bank or broker-dealer. Beneficial owners are sometimes said to be holding shares in "street name."

Bid Price

The term "bid" refers to the highest price a buyer will pay to buy a specified number of shares of a stock at any given time.  The term …

Bid Price/Ask Price

The term "bid" refers to the highest price a buyer will pay to buy a specified number of shares of a stock at any given time.  The term …

Binary options

A binary option is a type of options contract in which the payout depends entirely on the outcome of a yes/no proposition and typically relates to whether the price of a particular asset will rise…

Blank Check Company

A blank check company is a development stage company that has no specific business plan or purpose or has indicated its business plan is to engage in a merger or acquisition with an unidentified…

Blue Sky Laws

In addition to the federal securities laws, every state has its own set of securities laws—commonly referred to as "Blue Sky Laws"—that are designed to protect investors against fraudulent sales…

Board of Directors

A group of people elected by shareholders to oversee the management of a corporation.

Boiler Room Schemes

Boiler room schemes are large-scale operations designed to lure in as many investors to an investment scam as possible, often using high-pressure sales tactics.   Boiler room scheme operators may…

Bond Funds and Income Funds

What is a bond fund? "Bond funds" and "income funds" are terms used to describe a type of investment company (…

Bond Swap

The investor sells one bond and uses the proceeds to buy another bond, often at the same price.

Bonds

A bond is a debt security, similar to an IOU.  Borrowers issue bonds to raise money from investors willing to lend them money for a certain amount of time. When you buy a bond, you are lending to…

Bonds, Corporate

Corporate bonds are bonds issued by companies. Companies issue corporate bonds to raise money for a variety of purposes, such as…

Bonds, Selling Before Maturity

Investors who hold a bond to maturity (when it becomes due) get back the face value or "par value" of the bond. But investors who sell a bond before it matures may get a far different amount. For…

Bonus Credits for Annuities

In an attempt to attract purchasers, some insurance companies offer variable annuity contracts with "bonus credits." A bonus credit is the extra amount an insurance company agrees to add to the value…

Breakpoint Discounts

Some mutual funds that charge front-end sales loads will charge lower sales loads for larger investments. For…

Broker

An individual who acts as an intermediary between a buyer and seller, usually charging a commission to execute trades. Brokers are required to seek the best execution of trades they make for…

Broker Vote

For certain routine matters to be voted upon at shareholder meetings, if you don’t vote by proxy or at the meeting in person, brokers may vote on your behalf at their discretion. These votes may also…

Broker-Dealers: Record-Keeping Requirements

Investors should always keep good records of their securities transactions, including copies of…

Broker-Dealers: Why They Ask for Personal Information

Brokers generally request personal information from their customers, including financial and tax identification information, to comply with U.S. government laws and rules, as well as rules imposed by…

Brokerage Account – Closing Your Brokerage Account

Generally, either you or your brokerage firm may close your brokerage account at any time.  The specific steps you will need to follow to close your account are usually found in the terms and…

Bull Market

A time when stock prices are rising and market sentiment is optimistic. Generally, a bull market occurs when there is a rise of 20% or more in a broad market index over at least a two-month period.

Buying Long

Purchasing or owning shares of stock, with the expectation that the stock will rise in value.