Glossary

 A

  accrued interest accrued interest the interest received from a security's last interest payment date up to the current date or date of valuation; an investor who sells a security with accrued interest will not receive that interest until the next interest payment date after the sale; the buyer receives all interest from the last payment date, including any interest that accrued while the bond was owned by the prior investor; the buyer then pays the seller all interest that has accrued from the last payment date up to but not including the settlement date for the trade; in a bond ladder’s summary calculations, the accrued interest field refers to the sum of all accrued interest from the securities in the ladder that will need to be paid if the ladder is purchased on that day
  add-on offering add-on offering when a publicly traded company issues additional shares to the public
  adjusted options adjusted options option contract that has been adjusted or changed from its original terms due to a corporate action, special dividend, or other occurrence impacting the underlying security
  age of majority age of majority legally recognized age of adulthood; 18 in most U.S. states
  agency/GSE agency/GSE agency bonds are issued by official U.S. government bodies (e.g., Tennessee Valley Authority (TVA); government sponsored entity (GSE) bonds are offered by lenders created by an act of Congress to assist groups of borrowers (e.g., farmers, ranchers, homeowners, mortgage lenders, etc.); the principal and interest of GSE bonds are not guaranteed by the U.S. government; Agency and GSE bonds are generally available in minimum denominations of $10,000, with subsequent investments in increments of $5,000; Fidelity makes these securities available in minimum denominations of $1,000, and subsequent investment increments of $1,000
  allocation allocation the amount of stock in an initial public offering (IPO) that is sold to a customer
  amendment amendment additional registration document that is filed by the issuer with the SEC that has additional information regarding the proposed offering for that company
  American Depositary Receipts (ADRs) American Depositary Receipts (ADRs) securities offered by non-U.S. companies who want to list on an American exchange; each ADR represents a certain number of a company’s regular shares
  auction auction a security distribution system in which the price is set, based on auction bids, at the lowest level that will raise the requisite funds
  auction date auction date the date on which Treasury auction and Agency/GSE auction securities will be offered via Dutch auction
  Auto Roll Auto Roll a feature that provides customers with the ability to purchase certain eligible Treasury auction securities and/or new issue FDIC-insured certificates of deposit (CDs) with the proceeds of the principal of these securities at maturity automatically used to purchase a similar instrument; auto roll will continue to purchase a new security at the maturity of an older security unless the customer cancels the feature for that security, there is a material change to the Treasury auction schedule, or Fidelity is unable to find a replacement new issue CD that meets the initial size, duration and coupon frequency criteria of the maturing security
  average coupon rate average coupon rate the weighted-average coupon rates of all the bonds in a bond ladder
  average price average price the weighted-average price of the bonds in a bond ladder
  average yield average yield the weighted-average yield to maturity for the bonds in a bond ladder; when searching Fidelity’s bond inventory, this amount represents the average yield for all securities offered by Fidelity that meet the search criteria entered for a particular ladder
  average yield to worst average yield to worst the lowest possible average yield of all bonds in a bond ladder if the worst possible bond repayment scenarios take place, reflecting the lower of the yield to maturity or the yield to call based on the most recent Third Party price

 B

  basis point basis point one one-hundredth (1/100 or 0.01) of one percent; used to express the yield
  beneficiary beneficiary individual who receives the benefit from an estate, trust, retirement account, life insurance policy, or account with a transfer on death (TOD) designation
  best efforts best efforts arrangement whereby investment bankers acting as agents agree to do their best to sell an issue to the public; instead of buying the securities outright, these agents have an option to buy and an authority to sell the securities
  bid bid a proposal to purchase securities at a specified price; bids are infrequently available for municipal bonds and certificates of deposit (CDs) as compared to more liquid fixed income securities, such as U.S. Treasuries and corporate bonds
  bond type bond type the type of bond as delineated across the primary product sub-categories of corporates, municipals, Agencies/GSEs, Treasuries, or Certificates of Deposit; in the bond ladder tool, bond type indicates whether the ladder will invest in only municipal or taxable bonds; generally, tax-free municipal securities are considered inappropriate holdings for tax-advantaged accounts such as an IRAs and other retirement accounts; please consult your tax advisor for advice about your specific situation.
  book book list of all indications of interest for a new issue offering put together by the lead underwriter
  Build America Bonds (BAB) Build America Bonds (BAB) a category of taxable municipal bonds which have no implied backing from the federal government and can be one of two types; the first type of Build America Bond provides a Federal subsidy through Federal tax credits to investors in the bonds; the second type of Build America Bond provides a Federal subsidy through a refundable tax credit paid to state or local governmental issuers by the Treasury Department and the Internal Revenue Service
  buy-sell agreement buy-sell agreement for business with multiple owners; legal contract that stipulates the terms for remaining owners to purchase the interest of one that is departing

 C

  calendar calendar refers to upcoming IPOs and secondary offerings; Fidelity maintains equity, bond, and municipal calendars
  call feature call feature a feature of a bond or other security that determines the terms under which it can be redeemed by the issuer before the scheduled maturity
  call provision call provision a feature of a bond or other security that determines the terms under which it can be redeemed by the issuer before the scheduled maturity
  call schedule call schedule the list of dates on which a fixed-income security can be redeemed prior to maturity by the issuer; also includes the corresponding call prices
  callable callable a bond or other security that may be redeemed by the issuer before the scheduled maturity; terms of this feature can be found in the bond's call schedule
  cancellation cancellation when an IPO or secondary issue has difficulty getting investor interest to raise the desired capital, the company issuing the shares may cancel the offering in favor for some other form of financing
  charitable lead trust charitable lead trust trust designed to make payments to the grantor and/or other noncharitable beneficiaries for a set number of years or the duration of the grantor’s life; when the trust term ends, remaining assets are distributed to one or more charities
  charitable remainder trust charitable remainder trust trust designed to make payments to a charity for a set number of years or the duration of the grantor’s life; when the trust term ends, remaining assets are distributed to the donor and/or other beneficiaries
  charitable trust charitable trust trust designed to benefit one or more charities
  closing letter closing letter sent by the IRS to the executor to indicate that the estate’s tax return is satisfactory; depending on state law, the executor may have to file a closing letter with the state tax bureau
  COBRA COBRA federal mandate for most employers with group health care coverage to offer employees the opportunity to temporarily continue group coverage under their existing plan if the coverage would otherwise cease due to termination, layoff, or death; covered individuals (including family members) may be eligible for the same level of benefits received prior to the death or termination, but are often responsible for the entire policy premium
  co-manager co-manager underwriters for the initial public and secondary offerings who are not the lead manager controlling the offering; names of these underwriters appear on the bottom of the front page of the prospectus, with the most important manager appearing on the top left, and the co-managers arrayed from left to right in order of importance
  common stock common stock units of ownership in a public company for which the holders can typically vote on matters pertaining to the company and receive dividends from the company’s growth; common stockholders are the last to receive assets if the company liquidates
  conduit bonds conduit bonds revenue bonds issued by state agencies, which are generally third-party entities that act on behalf of the actual borrowers, typically private nonprofit (501(c)(3)) entities; the third-party conduit borrower—not the issuing agency—is responsible for interest payments and principal repayments
  conservator conservator an entity, typically the Federal Deposit Insurance Corporation, that may be appointed to take legal control over a financial institution and all of its assets
  convertible bond convertible bond bonds that contains a provision allowing the holder to exchange the bond for a specified number of shares of a different security (usually common stock) issued by the same company that issued the bond; terms of conversion are disclosed at the time the bond is issued
  cooling off period cooling off period time period, usually about 20 days, between the filing of the registration statement with the Securities and Exchange Commission (SEC) and the offer of those securities to the public; during the cooling off period, the syndicate and selling group members distribute tombstone notifications announcing the new issue, send preliminary prospectuses to qualified investors for review, and take indications of interest from customers
  corporate bond corporate bond a debt security issued by a private corporation; interest is taxable and is generally paid according to a coupon rate set at the time the bond is issued; generally have a face value of $1,000 and a specific maturity date
  corporate debt corporate debt a debt security issued by a private corporation; interest is taxable and is generally paid according to a coupon rate set at the time the bond is issued; generally have a face value of $1,000 and a specific maturity date
  CorporateNotes ProgramSM CorporateNotes ProgramSM a program that offers fixed rate senior and subordinated, unsecured obligations from a variety of independent issuers on a weekly basis, with a range of maturities and structures available; maturities range from 9 months to 30 years for both callable and non-callable securities; CorporateNotes may be purchased in principal amounts as low as $1,000 and in additional increments of $1,000; the risks involved are similar to other corporate bond investments, including but not limited to credit risk, and interest rate risk
  coupon coupon the interest rate a bond's issuer promises to pay to the bondholder until maturity, or other redemption event, generally expressed as an annual percentage of the bond's face value; for example, a bond with a 10% coupon will pay $100 per $1000 of the bond's face value per year, subject to credit risk; when searching Fidelity's secondary market fixed income offerings, customers can enter a minimum coupon, maximum coupon, or enter both to specify a range and refine their search; when viewing Fidelity's fixed-income search results pages, the term "Step-Up" instead of a numeric coupon rate means the coupon will step up, or increase over time at pre-determined rates and dates in the future; clicking Step-Up will reveal the step-up schedule for that security
  coupon frequency coupon frequency the frequency with which a fixed-income security pays interest (e.g., quarterly, semi-annually, yearly); see also payment schedule
  covered non-public company covered non-public company any non-public company satisfying the following criteria: income of at least $1 million in the last fiscal year or in two of the last three fiscal years and shareholders’ equity of at least $15 million; shareholders’ equity of at least $30 million and a two-year operating history; or total assets and total revenue of at least $75 million in the latest fiscal year or in two of the last three fiscal years
  credit quality credit quality a criteria used to evaluate the creditworthiness, or risk of default, of an individual fixed-income security; generally expressed through ratings provided by one of the credit ratings agencies
  credit risk credit risk the risk that the issuer of a fixed-income security may not be able to make regularly scheduled interest payments or repay the principal at maturity
  credit shelter trust credit shelter trust trust established to bypass the surviving spouse's estate in order to make full use of each spouse's federal estate tax exemption (also known as family trust, bypass trust, or B trust)
  creditor creditor an entity that extends credit to another entity by providing permission to borrow money; agreement generally includes the terms of the loan, such as interest rate, payment frequency, and date the principal the loan is due; in the context of bonds, an investor in bonds is described as a creditor of the entity that issued the bonds
  creditworthiness creditworthiness measurement of the risk of default of an individual fixed-income security or the issuer of a fixed-income security; generally measured by one of the major ratings agencies
  CUSIP CUSIP the nine-character alphanumeric identifier used to identify a U.S. or Canadian security

 D

  debt refinancing debt refinancing the act of retiring one debt issue and replacing it with another, usually at a lower interest rate, in order to reduce the issuer's borrowing costs
  default default if a bond issuer fails to make either an interest payment or principal repayment on its bonds as they come due, or fails to meet some other provision of the bond indenture, that bond is said to be in default; credit ratings agencies such as Moody's and S&P rate bonds to indicate the issuer's credit quality, and thus provide insight into the likelihood of default
  delete delete after expressing an open indication of interest in a new issue fixed-income offering for which securities have not yet been allocated, this option allows customers to cancel that indication of interest and end participation in the offering; once an indication of interest has been deleted, that customer will not be eligible to receive an allocation of securities, even if the indication of interest had previously been confirmed; while customers can attempt to delete an indication of interest at any time before securities are allocated, deletions are performed on a best efforts basis; there is no guarantee that an indication of interest can be deleted, in whole or in part
  depth of book depth of book refers to the display of numerous bids and offers in a given security in addition to the best bid and offer price; allows market participants to assess the liquidity of a given security; enables customers to see beyond the best bid or offer price, which may be of a limited quantity; is useful for customers who wish to purchase larger quantities of a given security
  discount discount the amount below the stated 'face' or par value when a fixed-income security (e.g. a bond) is bought or sold; for example, if a bond's face value is $1,000 and it sells for $900, it was sold at a discount
  due diligence due diligence reasonable investigation conducted by the parties involved in preparing a disclosure document to form a basis for believing that the statements contained therein are true and that no material facts are omitted
  dummy CUSIP dummy CUSIP temporary nine-character alphanumeric identifier used to identify a U.S. or Canadian security; for bonds, this displays for New Issue Certificates of Deposit (CDs) and New Issue Municipals; converts to a CUSIP on settlement
  durable power of attorney
durable power of attorney
authority granted to another person to make certain decisions on a person’s behalf; unless this authority is revoked before the person becomes incapacitated, it extends to the end of natural life

 E

  EDGAR – Electronic Data Gathering, Analysis, and Retrieval EDGAR – Electronic Data Gathering, Analysis, and Retrieval Securities and Exchange Commission (SEC) computer database system that allows issuers to file reports with the SEC by computer instead of having to file physical documents; this data is available to the general public via the Internet
  effective date effective date the day a newly registered security can be offered for sale
  estimated annual income (EAI) estimated annual income (EAI) estimate of annual income from a specific security position over the next rolling 12 months; calculated for U.S. government, corporate, and municipal bonds, and CDs by multiplying the coupon rate by the face value of the security; calculated for common stocks (including ADRs and REITs) and mutual funds using an Indicated Annual Dividend (IAD); calculated for fixed rate bonds (including treasury, agency, GSE, corporate, and municipal bonds), CDs, common stocks, ADRs, REITs, and mutual funds when available; not calculated for preferred stocks, ETFs, ETNs, UITs, international stocks, closed-end funds, and certain types of bonds
  estimated yield (EY) estimated yield (EY) estimate of a specific security position's annual yield for the next 12 months; calculated by dividing the estimated annual income (EAI) for the security position by the market value of that position, which may be higher or lower than the original purchase price
  exchange traded fund (ETF) exchange traded fund (ETF) a marketable security that tracks an index, a commodity, bonds, or a basket of assets like an index fund; unlike mutual funds, ETFs trade like common stocks on an exchange, experiencing price changes throughout the day as they are bought and sold
  executor executor person named in the will who is responsible for managing the decedent's estate (also known as a personal representative or executrix)
  extraordinary redemption - fixed income extraordinary redemption - fixed income a provision which allows a bond issuer the right to call its bonds before maturity if certain specified events occur (as specified in the offering statement), such as natural disasters,cancelled projects, to almost anything else

 F

  face value face value the stated value of an investment at maturity; the face value of a corporate bond, for example, is typically $1,000; for bond ladders, face value is the stated aggregate value of the underlying securities at maturity; for example, if there are five rungs in the ladder with 20 bonds in each rung and each bond has a $1,000 face value, the total face value of the ladder is $100,000; also known as par value or par amount
  family limited liability company family limited liability company entity designed for the transfer of a business, property, or other assets from parents to children to minimize estate tax liability and possibly provide protection from creditors
  family limited partnership family limited partnership partnership arrangement designed for the transfer of business, property, or other assets between family members, often from parents to children, in an effort to minimize estate tax liability and possibly provide protection from creditors
  final prospectus final prospectus prospectus that is printed after the deal has been made effective and can be offered for sale; it contains the information not available in preliminary prospectus, such as number of shares issued and the offering price
  firm commitment firm commitment arrangement whereby investment bankers make outright purchases from the issuer of securities to be offered to the public
  flipper flipper investor who has acquired shares of an IPO at its offering price and sells it immediately—which Fidelity currently defines as within 15 calendar days following pricing
  float float number of a company’s shares which are available for trading

 G

  generation-skipping transfer (GST) tax generation-skipping transfer (GST) tax excise tax levied in addition to any gift or estate tax, imposed on the transfer of property to a beneficiary other than a spouse who is two or more generations younger than the donor
  generation-skipping trust generation-skipping trust trust designed to use the generation-skipping transfer (GST) tax exclusion so that assets may be distributed to beneficiaries who are two or more generations younger than the donor, such as grandchildren, without incurring GST tax
  go public go public process by which a privately held company first offers shares of stock to the public; this is done via an initial public offering (IPO)
  government bond government bond debt obligations of the U.S. government that are issued with maturities of ten or more years; versus government bills issued at one year or less and government notes issued at one to ten years
  grantor grantor with respect to trusts, the person who creates the trust using his or her own assets (also known as donor or settlor)
  grantor retained annuity trust (GRAT) grantor retained annuity trust (GRAT) irrevocable trust that pays a fixed annuity to the grantor for a defined term, with the remainder of the trust passing to a noncharitable beneficiary
  grantor retained unitrust (GRUT) grantor retained unitrust (GRUT) trust that pays a fixed percentage back to the donor for a period of time; designed for the transfer of business or property assets and shifts future appreciation to children through the use of gift tax rather than estate tax
  green shoe green shoe part of the underwriting agreement which, in the event the offering is oversubscribed, allows the issuer to authorize additional shares (typically 15%) to be distributed by the syndicate; also called the overallotment option
  gross spread gross spread difference between the offering price and the net proceeds given to the company; the difference is made up of various fees charged to the issuer, including the selling concession, manager’s fees, underwriting fees, and reallowance

 H

  health care proxy health care proxy type of power of attorney that gives a designated individual decision-making power over one's medical affairs; may include "living will" provisions, as well (also known as durable power of attorney for health care)
  health savings account (HSA) health savings account (HSA) individual, tax-advantaged savings accounts offered by employers in conjunction with high-deductible health plans (HDHP) to cover qualified medical expenses; contributions are not subject to federal income tax at the time of deposit
  heir heir individual who is eligible to inherit the assets of someone who died without a will; also commonly used to describe any beneficiary or inheritor (also known as heir at law)
  heir at law heir at law individual who is eligible to inherit the assets of someone who died without a will; determined by state intestacy laws of the state of the deceased's primary residence
  histogram histogram relative distribution of volume and open interest for options within each expiration
  holding company holding company company that owns enough shares of another company to secure voting control
  hot issue hot issue IPO that trades at a significantly higher price on the secondary market than its initial offering price—this usually occurs when demand of the issue far exceeds the supply; the Securities and Exchange Commission (SEC) defines an issue as hot when it trades 5% higher than its offering price in the secondary market

 I

  illiquid illiquid refers to a noncash asset that cannot be sold quickly or easily without the risk of loss in value
  increment increment the quantity in which additional bonds can be purchased beyond the initial investment quantity; for example 5, meaning $5000 face value
  indenture indenture a contract that explains the various terms, options and intricacies of a bond
  index fund index fund a type of mutual fund with a portfolio designed to match or track the components of a market index
  indicated annual dividend (IAD) indicated annual dividend (IAD) estimate of a security's dividend payments for the next 12 months; calculated using prior and/or declared dividends for that security; sourced from third-party vendors and derived using either a historical methodology (HM) or a projected methodology (PM), depending on available information; PM annualizes the most recent regular cash dividend; HM accumulates the regular cash dividends paid over the past twelve months; if there is less than one year of dividend history, the accumulated dividends are annualized; HM or PM figure, whichever is calculated, is then multiplied by the reported quantity of the security
  indication of interest indication of interest a specific type of order, for a new issue security, submitted by a customer to let Fidelity know that they want to become eligible to receive an allocation of a new issue; information submitted includes the brokerage account from which the funds to pay for the securities will be deducted, the security's CUSIP, and the maximum quantity of securities that the customer would be willing to purchase; by placing an indication of interest, customers are expressing their desire to participate in a new issue offering; unless the order is cancelled by the customer, they will participate in the allocation process, allocations may be made in whole, in part, or not at all; updates regarding the order are sent to the customer as an alert that is sent by email or viewable in the Service Message Center
  insiders insiders persons such as management, directors, and significant stockholders who are privy to information about the operations of a company that is not known to the general public; insiders are subject to various restrictions and or limitations regarding equity stock offerings
  interest interest the amount paid by a borrower to a creditor, or bondholder, as compensation for the use of borrowed money
  interest income interest income the dollar amount of all interest earned on government and corporate debt obligations and short-term certificates of deposit, as well as interest earned from cash in a brokerage account; for bond ladders it represents the estimated annual income that will be received from the securities that make up the rung; the income is calculated by multiplying the coupon rate by the quantity of bonds (face value)
  intestate intestate describes the death of an individual with no will; all property and assets that would otherwise be governed by a will are passed to beneficiaries according to state intestacy laws
  IPO IPO privately held company offers its shares to the public—an initial public offering (IPO)
  irrevocable life insurance trust (ILIT) irrevocable life insurance trust (ILIT) irrevocable trust funded with a life insurance policy and designed to exclude life insurance proceeds from the taxable estate while providing liquidity to the estate and/or the trust's beneficiaries; it generally cannot be changed once it is created
  irrevocable trust irrevocable trust trust that cannot be changed once it is created (during the grantor's lifetime or at his or her death)
  issue price issue price price at which a new security will be distributed to the public prior to the new issue trading on the secondary market; commonly referred to as offering price
  issue price - fixed income issue price - fixed income the price paid for fixed‐income securities purchased directly from the issuer; for example, a Treasury Auction bond purchased directly from the U.S. government would cost $1,000 at face value
  issuer issuer a government, corporation, municipality, or agency that has issued a security (e.g., a bond) in order to raise capital or to repay other debt; the issuer goes to an underwriter to get their securities sold in the new issue market; for certificates of deposit (CDs), this is the bank that has issued the CD; in the case of fixed income securities, the issuer of the security is the primary determinant of the security's characteristics (e.g., coupon interest rate, maturity, call features, etc.)

 J

  joint ownership with right of survivorship joint ownership with right of survivorship ownership arrangement in which two or more individuals own the whole of an asset equally; when one owner passes away, assets pass to the other joint owner(s)

 K

(No entries)

 L

  last coupon last coupon Date issuer anticipates to pay the penultimate interest payment.
  lead underwriter lead underwriter underwriter who, among other things, is in charge of organizing the syndicate, distributing member participation shares, and making stabilizing transactions; the lead underwriter’s name appears on the left side of a prospectus cover
  liquidity liquidity degree to which an asset can be bought or sold quickly or the ability to be otherwise converted to cash quickly
  lockup period lockup period time period after an IPO when insiders at the newly public company are restricted by the lead underwriter from selling their shares in the secondary market
  long term care (LTC) insurance long term care (LTC) insurance insurance that covers the needs of disabled persons not generally covered by health insurance, Medicare, or Medicaid

 M

  market capitalization market capitalization method of calculating the value of a company that is equal to the number of shares outstanding multiplied by the price of each share of the stock
  market fluctuation market fluctuation the rise or fall in a security's price or portfolio's value within a short-term period; may be slight or dramatic depending on market and other conditions
  material events - fixed income material events - fixed income the disclosure of certain enumerated events affecting a municipal security; these events include the following, if material: (1) principal and interest payment delinquencies; (2) non-payment related defaults; (3) unscheduled draws on debt service reserves; (4) unscheduled draws on credit enhancements; (5) substitution of credit or liquidity providers; (6) adverse tax events affecting the tax-exempt status of the security; (7) modifications to rights of securities holders; (8) bond calls; (9) defeasances; (10) release, substitution, or sale of property securing repayment; (11) rating changes; (12) failure to provide annual financial information as required; the MSRB, Electronic Municipal Market Access (a.k.a. EMMA) provides free access to municipal disclosures, market data and education
  maturity, maturity date(s) maturity, maturity date(s) the date on which the principal amount of a fixed-income security is scheduled to become due and payable, typically along with any final coupon payment; it is also a list of the maturity dates on which individual bonds issued as part of a new issue municipal bond offering will mature; for example, if the issuer is offering 25 bonds and the maturity dates for the individual bonds range over a 10-year period, one might see 8/4/2002, 2003-2005, 2007, 2008, 2009, 2010; this would indicate that the securities mature on 8/4 of the years listed
  maximum maximum the highest value that can be specified when refining a particular search for fixed-income secondary market offerings; for example, the maximum coupon or ask price
  Medallion Signature Guarantee Medallion Signature Guarantee

Fidelity requires a Medallion Signature Guarantee when it is essential to ensure the authenticity of the signature. A signature guarantee is a widely accepted way to protect customers and investment companies from the legal repercussions resulting from invalid or illegal endorsements.

You should be able to obtain a signature guarantee from a bank, a broker, a dealer, a credit union (if authorized under state law), a securities exchange or association, a clearing agency, or a savings association.

A notary public cannot provide a signature guarantee. We cannot accept a notarization instead of a signature guarantee.

  minimum minimum the lowest value that can be specified when refining a particular search for fixed-income secondary market offerings; for example, the minimum coupon or ask price
  minimum required distribution (MRD) minimum required distribution (MRD) mandatory, minimum yearly withdrawals that generally must be taken starting in the year the accountholder turns 70½, upon retirement, or at death
  Moody's Moody's an independent organization that assigns credit ratings to debt instruments and securities to help investors assess credit risk
  municipal general obligation bond municipal general obligation bond a type of municipal bond backed by the full faith, credit, and taxing power of the issuer, specifically its ability to collect taxes; only entities that have the right to levy and collect taxes can issue general obligation bonds; certain governmental entities are subject to legal limits on the amount of taxes that they can impose, and their issues are called limited-tax general obligation bonds; unlimited-tax bonds are issued by government entities that are not subject to those limits

 N

  new issue new issue a security publicly offered for sale for the first time

 O

  offer price offer price the price at which a security may be purchased; conversely, bid price is the price at which a security may be sold
  offering date offering date the first day a security is publicly offered for sale
  offering price offering price price for which a new security issue will be sold to the public; also known as “issue price”
  offering range offering range price range at which the company expects to sell its stock in a public offering
  open order open order an order status indicating that an order has been placed and that no part of that order has been executed
  option strategy option strategy consists solely of either calls or puts, or a combination of both, to take advantage of a specific market forecast
  Original Issue Discount (OID) Original Issue Discount (OID) the difference between the stated redemption price at maturity (if greater than one year) and the issue price of a fixed income security attributable to the selected tax year; NOTE: Tax reporting of OID obligations is complex; if acquisition or bond premium is paid during the purchase, or if the obligation is a stripped bond or stripped coupon, the investor must compute the proper amount of OID; refer to IRS Publication 1212, List of Original Issue Discount Instruments, to calculate the correct OID
  outstanding shares outstanding shares number of shares that have been issued by the company that are held by the insiders and the general investing public
  overallotment overallotment part of the underwriting agreement which, in the event the offering is oversubscribed, allows the issuer to authorize additional shares (typically 15%) to be distributed by the syndicate; also called the green shoe
  oversubscribed oversubscribed situation in which investors have expressed an interest in buying more shares of a new security than will be available; under this condition, the price of the security has a greater likelihood of opening higher in the secondary market than is the offering price

 P

  par par the stated value of an investment at maturity; includes bonds, life insurance policies, bank notes, currency, some stocks, and other securities; typically $1,000 for a corporate bond
  par value par value the stated value of an investment at maturity; includes bonds, life insurance policies, bank notes, currency, some stocks, and other securities; typically $1,000 for a corporate bond
  payment schedule payment schedule the frequency with which a fixed-income security pays interest (e.g., monthly, quarterly, semi-annually, yearly)
  per capita per capita method of distributing assets so that each child receives the same proportion of the total assets; should one child pass away prematurely, the assets are then distributed among the remaining children
  per stirpes per stirpes method of distributing estate assets so that each branch of the family (i.e., child and his or her descendants) receives the same proportion of the total assets, regardless of how many members each branch has
  pipeline pipeline supply of new issues that are tentatively scheduled to come to market; pipeline is also referred to as “visible supply”
  postponement postponement when an offering that had a tentative “pricing” date is pushed back in timing to a later date; postponement may occur when market conditions threaten the viability of the offering; extremely adverse market conditions could lead to cancellation of the offering
  power of attorney (POA) power of attorney (POA) authority granted to another person to make certain decisions on a person’s behalf; POA authority ends when the person granting authority revokes authority, becomes incapacitated, or dies; durable POA extends authority past the point of incapacitation to the end of natural life
  preferred stock preferred stock stocks that pay a fixed dividend; have dividend and asset preference over common stocks, but behind debt in the case of bankruptcy; generally does not come with voting rights; either perpetual (have no maturity) or maturities of 30 years or more; can be callable
  preliminary prospectus preliminary prospectus offering document printed by the issuer containing a description of the business, discussion of strategy, presentation of historical financial statements, explanation of recent financial results, management and their backgrounds and ownership; the preliminary prospectus has red lettering down the left-hand side of the front cover and is sometimes called the “red herring”
  premium premium if the opening price of an IPO in the secondary market is higher than its offering price, the difference would be the premium
  premium - fixed income premium - fixed income the amount above the stated 'face' or par value when a fixed-income security (e.g., a bond) is bought or sold; for example, if a bond's face value is $1,000 and it sells for $1,200, it was sold at a premium
  pre-refunded bonds pre-refunded bonds a municipal bond that is secured by an escrow fund; the escrow fund comes from the issuer floating a second bond issue and using the proceeds from that second bond issue to purchase government obligations, typically U.S. Treasuries, proceeds from the second bond issue create an escrow fund to mature at the first call date of the first bond issue to pre-refund that issue; bond issuers will typically do this during times of lower interest rates to lower their interest costs
  price range price range price range at which the company expects to sell its stock in a public offering; also referred to as “offering range”
  pricing date pricing date for a new issue fixed-income security, the date on which the price was set
  principal repayment principal repayment the payment of the face value of a bond or CD by the issuer; this can be due to the securities reaching maturity date, or because the issuer redeemed the securities prior to maturity due to a call or other form or redemption
  private foundation private foundation tax-exempt organization with only a few main contributors, created for the purpose of ongoing charitable giving
  private placement private placement investment in a company by a group of private investors—the offering is limited both by the amount of shares or units and the number of investors; recipients receive restricted stock from the issuer
  privately held privately held company whose shares have never been offered publicly for sale
  probate probate legal process of settling an estate during which the validity of the will is proven, the deceased's assets are collected and accounted for, debts and taxes are paid, and remaining probate estate assets are distributed
  probate inventory probate inventory listing of all assets and liabilities related to the deceased's estate
  provision provision a portion of a bond's covenant that determines certain characteristics about the bond, such as the conditions under which it can be called or redeemed by the issuer, or the rate and price at which it can be converted into common stock (if applicable)
  puttable bond puttable bond a type of bond that gives the holder with the right to require an issuer to repurchase the bond, allowing the holder to purchase a higher coupon bond with the proceeds received from exercising the put option; puts can generally be exercised on pre-determined dates; customers are encouraged to read the prospectus to understand the type of put feature and any associated limitations

 Q

  qualified domestic trust (QDOT) qualified domestic trust (QDOT) trust structured to allow the surviving spouse of a non-U.S. citizen to benefit from the marital estate tax exclusion in the deceased spouse's estate
  qualified personal residence trust (QPRT) qualified personal residence trust (QPRT) trust whereby the grantor retains the right to live in the personal residence held in trust, with the residence passing to the beneficiaries at the end of the selected term; it may reduce gift and/or estate taxes by taking advantage of the difference in value of the property when it is transferred to the trust versus when it is distributed to the beneficiaries
  qualified terminable interest property (QTIP) trust qualified terminable interest property (QTIP) trust trust designed to provide lifetime income to a surviving spouse while transferring the remainder interest to beneficiaries of the grantor's choosing, often used for children from previous marriages; assets in the trust will be included in the surviving spouse’s estate at death
  quiet period quiet period time period in which companies are forbidden by the Securities and Exchange Commission (SEC) to promote or hype the offering; starts the day a company files a registration statement and lasts up to 25 days after a stock starts trading

 R

  recharacterization recharacterization the process of reversing a Roth IRA conversion, whereby assets and earnings converted to a Roth IRA are converted back to the original IRA from which the assets originated
  red herring red herring another name for the preliminary prospectus; the offering document printed by the issuer containing a description of the business, discussion of strategy, presentation of historical financial statements, explanation of recent financial results, management and their backgrounds, and ownership
  redeem redeem the act of an issuer calling, or purchasing a fixed-income security from the holder, generally at face value, prior to the stated maturity date; the bond indenture can provide details on possible redemptions
  redemption redemption the act of an issuer calling, or purchasing a fixed-income security from the holder, generally at face value, prior to the stated maturity date; the bond indenture can provide details on possible redemptions
  registration registration procedure by which a company who would like to go public files a registration statement with the SEC which contains a description of the company, its management, and its financials; the material is reviewed by the SEC for its completeness, amount of disclosure, and its presentation of accounting information before the SEC declares the registration effective, which allows it to be traded to the public
  revocable trust revocable trust trust that gives one the ability to pass trust assets to beneficiaries without the delay or expense of probate, but over which the ability to change or terminate during one's lifetime is retained (also known as living trust)
  risk factors risk factors considerations that are disclosed in the preliminary prospectus that might materially affect the company’s financials, stock price, or reputation in a negative way
  road show road show also called the “dog and pony show,” a tour taken by a company preparing for an IPO in order to attract interest in its securities; attended by potential buyers, including institutional investors, analysts, and money managers by invitation only—members of the media are forbidden to attend
  rules of succession rules of succession state intestacy laws that determine which survivor(s) inherit the estate of an individual that died without a will

 S

  SEC SEC Securities and Exchange Commission, a federal government agency that regulates and supervises the securities industry; the commission administers federal laws, formulates and enforces rules to protect against malpractice, and seeks to ensure that companies provide full disclosure to investors
  secondary market secondary market a market where securities are bought and sold between investors, as opposed to investors purchasing securities directly from the issuers; secondary market activity generally takes place on a major exchange, such as the New York Stock Exchange, or on electronic communications networks (ECNs)
  secondary offering secondary offering public sale of previously issued securities held by large investors, usually corporations or institutions
  sector sector refers to the area of the economy from which a corporate bond issuer primarily derives its revenues, such as financial or industrial. Within each Sector are Industry Groups; for example, chemical and petroleum would be Industry Groups under the industrial Sector; the Sector and Industry Groupings are relatively static, although the inventory available within a given Grouping changes subject to market activity; NOTE: There may be cases when certain bonds are not classified, in which case searching by all sectors will yield the most results
  selling concession selling concession commission paid to brokers to help distribute a public securities offering
  selling group selling group group of broker/dealers that helps an underwriting syndicate distribute securities of a public offering
  settlement date settlement date date on which an executed trade of securities must be paid for
  shareholder shareholder any person who owns shares of a company’s stock
  shelf filing shelf filing Securities and Exchange Commission rule which allows a company to register a public offering with the SEC which will be made available for sale at some unspecified future date
  SIC code SIC code Standard Industrial Classification is a four-digit code that identifies the sector specific industry that a company is a member of
  sovereign debt sovereign debt fixed-income securities issued by a national government in that country's local currency; in addition to the credit risks presented by the issue and the issuing country, may also be subject to currency risk
  spinoff spinoff conversion of a subsidiary or division of an existing company into a stand-alone entity
  Standard & Poor's (S&P) Corporation Standard & Poor's (S&P) Corporation an independent company that provides investors with market intelligence in the form of credit ratings, indices, investment research and risk evaluations and solutions
  standard market session standard market session for equities: 9:30 a.m. to 4:00 p.m. ET when U.S. markets and exchanges (e.g., NASDAQ and NYSE) are generally open for trading; for bonds: 8:00 a.m. to 5:00 p.m. ET, when over-the-counter markets are open for trading (bond trading hours may vary based on marketplace participation)
  state state this can refer to either the two-character abbreviation for the state where a driver's license was issued, provided during Fidelity’s Electronic Funds Transfer online setup; or a way to specify the state where bonds are issued when refining a search of municipal bond offerings; for bond ladders, customers can search Fidelity's municipal bond offerings inventory by selecting the state where the bonds are issued to refine their search
  statutory notice statutory notice notification that is legally required to be made, usually within a specified period of time
  stock split stock split an increase in a corporation's number of outstanding shares of stock without any change in shareholder equity or market value at the time of the split
  successor trustee successor trustee individual named in the terms of a trust to assume the role of trustee should the originally appointed trustee be unable or unwilling to assume or continue in the role; for living trusts, the individual named in the trust to succeed as trustee upon the owner's death
  survivor's option survivor's option a feature of certain debt instruments that allow for the estate of a deceased investor to "put back" or redeem that instrument without penalty; bonds that carry a survivor's option usually redeem for par value when the survivor's option is exercised; in either case the benefit of the survivor's option cannot be realized unless the original investor in the asset has died; because investor mortality risk must be taken into account when underwriting assets that carry a survivor's option, these assets are more complex and expensive to issue; also known as a "death put"
  syndicate syndicate group of underwriters who assist the lead manager or syndicate manager in distributing a new securities issue
  syndicate manager syndicate manager also referred to as the lead underwriter or managing underwriter who, among other things, is in charge of organizing the syndicate and distributing member participation shares to other members of the syndicate

 T

  taxable estate taxable estate fair market value of all assets owned by the deceased, minus funeral expenses, debts owed by the deceased, and assets passed to a surviving spouse
  tax-exempt income tax-exempt income interest from municipal bonds as well as distributions from mutual funds that qualify as exempt interest dividends; this income is generally not subject to regular federal income taxes; note that Fidelity reports this information to the IRS, and may be required to report the information to tax authorities in California among other states; the total amount or a portion of tax-exempt income (reported as specified private activity bond interest) must be taken into account when computing the federal Alternative Minimum Tax (AMT) applicable to individuals and may be subject to state and local taxes; you are required to report tax-exempt income on Form 1040, and may be required to report it on your state tax return as well
  tenants by entirety tenants by entirety form of joint ownership of an asset by spouses in which both own the asset equally; upon death of one spouse, ownership passes automatically to the surviving spouse
  tenants in common tenants in common form of joint ownership of an asset in which ownership can be unequal and one owner's interest can be sold, mortgaged, or willed without the consent of the remaining owner(s); there is no ability to name a beneficiary, so interest in these assets will always fall under the deceased owner's will
  term term an indicator of how long a security position or lot was held; possible values are Long: held for more than 1 year; Non-Reportable: lot or position was closed as the result of a transaction other than a sale; no reportable gain/loss was reported, the holding period and resulting term are not reported; Short: held for 1 year or less; and Unknown: Fidelity does not know how long the position or lot was held; this state typically exists because the shares were transferred to Fidelity from another institution and the holding period prior to the transfer was not communicated; for fixed-income securities, this is the period of time from the security's issue date until the maturity date; for example, for a 10-year corporate bond the term is 10 years
  third-party providers third-party providers Fidelity's fixed income inventory is composed of offerings from Fidelity Capital Markets and other third-party providers.
 
Fidelity may source bonds directly from national and regional broker dealers or use national and regional broker dealers that are affiliated with Tradeweb (FKA as BondDesk), KCG BondPoint, and The MuniCenter offering platforms.
 
Note that Fidelity’s combined inventory will generally not represent the universe of outstanding securities of a given bond type.
  TIGRs TIGRs Treasury Income Growth Receipts; U.S. Government-backed bonds that have been stripped of their coupons and sold at a deep discount; discontinued in 1986 when replaced by treasury STRIPS
  tombstone tombstone advertisement placed in print media that serves as an official advisory of a securities offering having been completed for a company; it lists all the managers and co-managers who participated in the event
  tranche tranche French word used to describe segments of the IPO being sold in different countries; a multi-tranche distribution is commonly used for large U.S. and foreign IPOs where there is demand both in the U.S. and in their home country
  transfer on death (TOD) transfer on death (TOD) a provision of a brokerage account that allows the account’s assets to pass directly to an intended beneficiary; the equivalent of a beneficiary designation
  transfer on death (TOD) deed transfer on death (TOD) deed legal document that conveys title to a property and has a provision for the transfer of the property to another person or persons immediately upon the death of the owner(s)
  Treasuries Treasuries debt obligations of the U.S. government that are issued at various intervals and with various maturities; revenue from these bonds is used to raise capital and/or refund outstanding debt; since Treasury securities are backed by the full faith and credit of the U.S. government, they are generally considered to be free from credit risk and thus typically carry lower yields than other securities; the interest paid by Treasuries is exempt from state and local tax, but is subject to federal taxes and may be subject to the federal Alternative Minimum Tax (AMT); U.S. Treasury securities include Treasury bills, Treasury notes, Treasury bonds, zero-coupon bonds, Treasury Inflation Protected Securities (TIPS), and Treasury Auctions
  treasury auctions treasury auctions the initial sale of U.S. debt obligations and new issues, offered and purchased directly from the U.S. government at a face value set at auction; these securities are auctioned in a single-priced, Dutch auction; auctions are held with the following frequencies: Treasury bills with one-month (30 day), three-month (90 day), and six-month (180 day) maturities are auctioned weekly; treasury notes with two- and five-year maturities are auctioned monthly; Notes with three-year maturities are auctioned in February, May, August, and November; treasury bonds with 10-year maturities are auctioned in February, May, August, and November. Treasury Inflation Protected Securities (TIPS) are issued in 5-, 10-, and 20-year maturities and are auctioned in January, April, July, and October
  Treasury bonds Treasury bonds debt obligations of the U.S. Government with maturities of 10 years or longer; coupon interest for Treasury bonds is exempt from state and local taxes, but is federally taxable; interest income may also be subject to alternative minimum tax
  Treasury inflation protected securities (TIPS) Treasury inflation protected securities (TIPS) a type of Treasury note that adjusts for inflation by providing inflation compensation in addition to the coupon; the inflation component, affecting principal, is based on the Consumer Price Index (CPI), adjusting it upwards for inflation or downwards for deflation; the adjustment impacts semi-annual interest paid and the principal at maturity; since TIPS' principal adjusts semi-annually, the coupon varies as well; at maturity, a TIPS pays the greater of the adjusted or original principal; this provision protects the investor from the loss of any principal in the event of a sustained period of deflation; investors in TIPS sacrifice some yield as a trade-off for the inflation protection; the inflation adjustment is federally taxable on an annual basis, although not paid out until maturity
  Treasury inflation-protected securities (TRACE) Treasury inflation-protected securities (TRACE) the Trade Reporting and Compliance Engine (TRACE) is the FINRA-developed vehicle that facilitates the mandatory reporting of over the counter secondary market transactions in eligible fixed income securities; all broker/dealers who are FINRA member firms have an obligation to report transactions in corporate bonds to TRACE under an SEC approved set of rules
  treasury security treasury security debt obligations of the U.S. government that are issued at various intervals and with various maturities
  treasury stock treasury stock stock a company issues then buys back, at which time it is placed in the company’s treasury, where it earns no dividends and carries no voting privileges
  trustee trustee person or institution that is the legal owner of a trust; responsible for managing the assets placed into a trust and otherwise acting according to its terms

 U

  underwriter underwriter brokerage firm that raises money for companies using public equity and debt markets; underwriters are financial intermediaries that buy stock or bonds from an issuer and then sell these securities to the public, a process which is highly regulated by the SEC and the National Association of Securities Dealers
  Uniform Gifts to Minors Act (UGMA) Uniform Gifts to Minors Act (UGMA) state law that allows adults to contribute to a custodial account in the name of a minor beneficiary without having to establish a trust or name a legal guardian; such funds are irrevocable gifts to the minor and may only be used for the benefit of the minor
  Uniform Transfers to Minors Act (UTMA) Uniform Transfers to Minors Act (UTMA) state law that extends the coverage of the Uniform Gifts to Minors Act (UGMA) so that transfers to a custodial account in the name of the minor beneficiary may be simplified; such funds are irrevocable gifts to the minor and may only be used for the benefit of the minor
  use of proceeds use of proceeds how the company plans to use the monies it generated from an IPO or secondary offering
  use of proceeds - fixed income use of proceeds - fixed income the area or activities to which the funds raised from a municipal bond issue will be directed and, in turn, the source of future bond interest payments and principal repayment; for general obligation bonds, funds raised may be for general purposes, both operating and infrastructure, and payments are secured by the general taxing power of the issuer — usually a state, town, or city; revenue bonds are categorized under terms such as "Utilities" or "Transportation"

 V

  venture capital venture capital source of money for start-up companies, typically raised by venture capital firms who invest in private companies that need capital to develop and market their products; in return for this investment, the venture capitalists generally receive significant ownership of the company and seats on the board
  volatility volatility characteristic of a security which rises or falls sharply in price within a short time period

 W

  wash sale wash sale the sale of shares at a loss, only to purchase the same or substantially identical security for a lower price within a 61-day period, beginning 30 days before the sale and ending 30 days after the sale, including the date of the sale; for more information, see IRS Publication 550
  will will legal document that defines how a person wants his or her assets distributed at death; may name an executor for the estate and guardianship for minor children
  withdrawal withdrawal when a company decides to not continue with its proposed offering of securities

 X

(No entries)

 Y

  yield yield the percentage of return an investor receives based on the amount invested or on the current market value of holdings; it is expressed as an annual percentage rate; yield stated is the yield to worst — the yield if the worst possible bond repayment takes place, reflecting the lower of the yield to maturity or the yield to call based on the previous close
  yield curves yield curves the relationship between interest rates and time, determined by plotting the yields of all or as many bonds of similar credit quality (eg: Treasuries or AA-rated Corporates), against their maturities; yield curves typically slope upward since longer maturities normally have higher yields, although it can be flat or even inverted; the Fixed Income Search Results Scattergraph shows several smoothed yield curves for different fixed-income product types and credit qualities; these are based on bonds that Fidelity recognizes and are not equal to the entire universe of bonds, which is significantly larger than the number of bonds offered by Fidelity on any given day
  yield to maturity yield to maturity the rate of return an investor receives if an investment is held to the maturity date
  yield to worst yield to worst the lowest potential yield that can be received on a bond without the issuer actually defaulting; calculated by making worst-case scenario assumptions on the issue by calculating the returns that would be received if any in-whole mandatory redemptive provisions are exercised by the issuer; partial redemptive provisions (such as sinking funds) are not included in yield to worst calculations; the yield to worst metric is used to evaluate the worst-case scenario for yield to help investors manage risks and ensure that specific income requirements will still be met even in the worst scenarios

 Z

(No entries)

0 - 9

  529 plan 529 plan state- or state-agency-sponsored college savings plan that is flexible and offers tax-deferred growth