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Branch
Office Manager (BOM)
Individual who is in charge of a branch office of a brokerage firm or
a bank. BOMs who supervise the activities of at least three brokers must
pass supervisory tests given by the exchanges and the NASD.
See: Broker
Breadth
of the Market
Also called "advance/decline" indexes, it is a percentage of
stocks participating in a market move. If 2/3 of the stocks listed on
an exchange rise during a trading session, most analysts will consider
the move to be a good breadth of the market.
See: Fundamental
Analysis; Index;
Market
Analysis; Technical
Analysis
Break
1: A discrepancy in a brokerage firm's accounts.
2: A sudden,
steep drop in a security's price or in the overall market.
Break-Even
Point
In securities and in options, it is the price where the investor has neither
a gain nor a loss from the transaction. However, the break-even point
is calculated differently depending on the option strategy. The break-even
points are determined by: * Long calls and short uncovered calls--the
strike price plus premium. * Long puts and short uncovered puts--the strike
price minus premium. * Short covered calls--the purchase price minus premium.
* Short put covered by short stock--the short sale price of underlying
stock plus premium.
See: Call
Option; Long
Position; Option
Premium; Options;
Put
Option; Selling
Short; Short
Position; Strike
Price; Uncovered
Call Option; Uncovered
Put Option; Underlying
Security
Breakout
Movement of a security's price that is above or below an established trading
range. The movement may either be above a resistance level or below a
support level. A breakout is considered to indicate a continuing move
in the same direction.
See: Resistance
Level; Support
Level; Trading
Range
Breakpoint
Dollar levels of investment purchases in a mutual fund that qualify an
investor for reduced sales charges. The purchases may either be a lump
sum or by accumulating shares.
See: Breakpoint
Sale; Letter
Of Intent; Mutual
Fund
Breakpoint
Sale
Solicitation of mutual fund purchases at dollar amounts that are just
below the eligibility for a breakpoint (reduced sales charges). Sales
within $1,000 of breakpoint are usually considered to be breakpoint sales.
It is an unethical practice that is in violation of NASD rules.
See: Breakpoint;
Mutual
Fund; Rules
Of Fair Practice
Breakup
Value
Total market value of a corporation if each of its divisions operate independently
and has its own stock price. Also called private market value (PMV), analysts
look for high PMV in relation to market values to identify bargains and
potential target companies.
See: Private
Market Value; Target
Company
Broad
Tape
Dow Jones news ticker tape used by brokerage firms. The service continuously
reports major news developments and financial information. The phrase
also refers to comparable information provided by Associated Press (AP),
United Press International (UPI) or Reuters.
See: Ticker
Tape
Broker
A person who handles investors' orders to buy and sell securities. For
this service a commission is usually charged. Brokers specializing in
stocks, bonds, options, or commodities act as an agent.
See: Account
Executive; Dealer;
Discount
Broker; Full
Service Broker; Registered
Representative
Broker's
Broker
A security firm that acts as an agent for another security firm.
See: Agency;
Specialist
Broker-Dealer
See: Broker;
Dealer
Brokered
CD
Certificate of Deposit (CD) that is issued by a bank and bought in bulk
by brokerage firms who resell them to their customers. Brokered CD's may
pay as much as 1% more than those sold directly by banks, carry federal
deposit insurance up to $100,000, are liquid on a secondary market made
by the broker, and investors are not charged a commission.
See: Broker;
Certificate
Of Deposit; Liquidity;
Secondary
Market
Brokers'
Loan
Money borrowed by brokerage firms from banks or other brokerage firms
for financing inventories of stock, a firm's own investments, and customers'
purchases of securities on margin.
See: Broker
Loan Rate; Call
Loan; Call
Loan Rate; Margin
Broker
Loan Rate
Interest rate charged to brokers when borrowing funds from banks to cover
their clients' security positions. The rate is usually approximately a
point above short-term interest rates such as the federal funds rate.
Broker loans are callable on 24-hour notice. Hence, the broker loan rate
is sometimes called the "call loan rate."
See: Brokers'
Loan; Callable;
Call
Loan Rate; Interest
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