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Equities & Finance Glossary – Terms Starting with B
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Terms Starting with B
Bearish Candlestick/Multi-Bar Patterns Bearish candlestick/multi-bar patterns are based on studying the bars of a stock chart (either candlestick or western bar) to identify situations where the stock is poised for a price decline. These patterns are based on the shape and relationship of the candlestick(s) or price bar(s) representing one or multiple consecutive trading days. This includes patterns such as the Hanging Man, Key Reversal Bar and the Gap Up. The Technical Event is the confirmation that the pattern has formed in the price bars. These Technical Events are useful for suggesting possible short-term price movement although they can identify areas of support and resistance that influence price action over a longer period of time, particular when viewed as weekly or monthly price bars. These patterns are also useful for supporting or refuting the possible price movement suggested by classic patterns. Candlestick and multi-bar patterns are often considered as supplementary information.
Bearish Indicator and Oscillator Events Bearish indicator and oscillator events are based on mathematical formulas applied to the stock price to identify situations where the price is poised for a decline. Indicators that are currently supported are based on moving average calculations. Oscillators are based on mathematical formulas that incorporate historical or recent prices of the stock.
Bearish Price Chart Patterns Bearish price chart patterns are visual shapes identified on a price chart, indicating that the stock may be poised for a price decline. These price chart patterns are also known as Classic Patterns. Classic is a term used to refer to a group of patterns that typically have a longer-term horizon (greater than 12 days) and which have distinct price swings such that the price swings form distinctive patterns. The names of classic patterns often reflect the shape of the formation such as the Double Top, Double Bottom, Head and Shoulders Top, and Ascending Triangle.
Benchmark An unmanaged group of securities whose overall performance is used as a standard against which relative investment performance is measured.
Beta A quantitative measure of the volatility of a stock relative to the Standard & Poor's 500 (S&P 500), generally considered representative of the overall securities market. Specifically, Beta is the performance the stock has experienced in the last 36 or 60 months as the S&P 500 moved 1% up or down. A Beta of 1 indicates the stock's price will move with the S&P 500. A Beta of less than 1 means it will be less volatile than the S&P 500. Many utilities stocks have a Beta of less than 1. Generally speaking, the higher the Beta, the riskier the investment.
Beta measures volatility, but it does not predict direction. A stock that does 50 percent worse than the S&P 500 and a stock that does 50 percent better than the S&P 500 will both have a high Beta. Therefore, Beta is best used for finding companies that tend to move with the S&P 500, meaning they have Betas closer to 1.
Beta Measurements for Exchange Traded Funds (ETFs) A measure of a portfolio's sensitivity to market movements represented by these benchmarks:
S&P 500 for equity ETFs Lehman Brothers Aggregate Bond Index for fixed income ETFs MSCI EAFE for international equity ETFs The benchmark index has a beta of 1.0. A beta of more (less) than 1.0 indicates that an ETF's historical returns have fluctuated more (less) than the benchmark index. Beta is a more reliable measure of volatility when used in combination with a high R2 which indicates a high correlation between the movements in an ETF's returns and movements in a benchmark index.
Beta measures volatility, but it does not predict direction. An ETF that does 50 percent worse than the S&P and a stock that does 50 percent better than the S&P will both have a high beta. Therefore, beta is best used for finding ETFs that tend to move with the S&P, meaning they have betas closer to 1.
Bid The highest price a prospective buyer is willing to pay for a unit of a security.
Bid Exchange The exchange or market from which the bid price was quoted (e.g., NYSE, NASDAQ).
Bid/NAV For stock and option quotes, the highest price a prospective buyer would pay for a unit of a security.
Bid Size The number of round lots (100 shares per lot) offered at the bid price. For example, a bid size of 20 represents 2,000 shares (20 round lots at 100 shares per lot).
Bollinger Bands A type of envelope (or trading bank) plotted at standard deviation levels above and below a moving average. Bollinger Bands provide a view of the current trading range, and can be used with other indicators to determine when it's time to buy or sell. Because standard deviation measures volatility, Bollinger Bands widen during volatile markets and contract during calmer periods. Sharp price changes tend to occur after the banks tighten and volatility lessens. When prices move outside the bands, a continuation of the current trend is implied. Bottoms and tops made outside the bands, followed by bottoms and tops made inside the bands, call for reversals in the trend. A move that originates at one band tends to go all the way to the other band. This observation is useful when projecting price targets.
Bond An interest-bearing promise to pay a specified sum of money (the principal amount) due on a specific date.
Book Value Growth (5-Year Average) The change in the assets of a company, less its liabilities for a specified time period. Also called Shareholders' Equity, Book Value Growth measures accumulated profits, or how much the company's book value has grown during the time period. Book Value Growth is measured over the Last 5 Years, and is expressed as an average.
Book Value Growth mostly occurs because of earnings growth. Because the earnings are added to a base of book value, the percentage growth is not only a measure of how much the company is growing, but also how significant the last year was in terms of its accumulated profits.
Bullish Candlesticks/Multi-Bar Patterns Bullish candlesticks/multi-bar patterns are based on studying the bars of a stock chart (either candlesticks or western bars) to identify situations where the stock is poised for a price increase. These patterns are based on the shape and relationship of the candlestick(s) or price bar(s) representing one or multiple consecutive trading days. This includes patterns such as the Hanging Man, Key Reversal Bar and the Gap Up. The Technical Event is the confirmation that the pattern has formed in the price bars. These Technical Events are useful for suggesting possible short-term price movement although they can identify areas of support and resistance that influence price action over a longer period of time, especially when viewed as weekly or monthly price bars. These patterns are also useful for supporting or refuting the possible price movement suggested by classic patterns. Candlesticks and multi-bar patterns are often considered as supplementary information.
Bullish Indicator and Oscillator Events Bullish indicator and oscillator events are based on mathematical formulas applied to the stock price to identify situations where the price is poised for an increase. Indicators that are currently supported are based on moving average calculations. Oscillators are based on mathematical formulas that incorporate historical or recent prices of the stock.
Bullish Price Chart Patterns Bullish price chart patterns are visual shapes identified on a price chart, indicating that the stock may be poised for a price increase. These price chart patterns are also known as Classic Patterns. Classic is a term used to refer to a group of patterns that typically have a longer-term horizon (greater than 12 days) and which have distinct price swings such that the price swings form distinctive patterns. The names of classic patterns often reflect the shape of the formation such as the Double Top, Double Bottom, Head and Shoulders Top, and Ascending Triangle.
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