Dow Theory Forecasts

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Underwriter

A company that purchases securities from an issuer to resell to the public.

Unlisted Security

Any security that does not trade on an organized exchange.

Up Tick

Indicates that a transaction was made at a price higher than the preceding transaction. Also called a plus tick. See Down Tick.

Valuation Ratios

A series of ratios that relate the market price of a stock to the firm's assets, dividend, or earnings.

Variable Expense

An expense that increases or decreases directly with increases or decreases in sales.

Venture Capital

Funds invested in a new, usually highly speculative, business venture.

Volatility

A term used to describe the relative price movement of a security. For example, a security with wide price swings is considered to be more volatile or have higher volatility than a security that trades within a narrow price range. Generally a highly volatile security carries more risk than a security with low volatility.

Volume

The number of shares traded within a particular time period.

Voting Rights

A common shareholder's right to vote his/her stock on company matters.

Warrant

An option to purchase a security from the issuer for a specific price and within a specified time.

When Issued

Refers to a particular stock that has not yet officially been issued to the public but trades in the market as if it did.

Working Capital

A liquidity measure that is equal to current assets less current liabilities. Working capital should be a positive number for a financially strong firm rather than a negative number.

Working Capital = Current Assets - Current Liabilities

Write Down

Refers to a particular stock that has not yet officially been issued to the public but trades in the market as if it did.

Write-Off

Similar to the concept of "Write Down," a write-off represents a complete rather than a partial loss in value of an asset, such as an account receivable that will never be paid. A write-off is charged against current earnings.

Writer

A person who sells an option contract.

Yield

The annual income return of an investment.

Yield to Maturity

The rate of return that is expected to be earned from a bond if it is held to maturity.

Zero Coupon Bond

A type of bond that does not pay periodic interest and is issued at a substantial discount from its future redemption price.