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Glossary of Investment Terms

 

D

 

Day Trade

 

Executing a buy order and a sell order on the same stock within the same day.

 

 

 

Dealer Agreement

 

Established between the investment company and a broker-dealer that allows the broker-dealer to buy and sell their family of funds.

 

 

 

Death Put

 

Estate feature that allows an estate to redeem a CD prior to maturity at par in the event of a death or legal incompetence of the owner.

 

 

 

Debit Balance

 

Money a margin customer owes a broker for loans to purchase securities.

 

 

 

Debt Instruments

 

Written promise to repay a debt; for example, a bill, note, bond, certificate of deposit or commercial paper.

 

 

 

Default Risk

 

The risk that companies or individuals will be unable to pay the contractual interest or principal on their debt obligations.

 

 

 

Deliverable

 

The asset in an option contract that will be delivered in the future at an agreed-upon quantity of shares or price.

 

 

 

Depositor (Grantor)

 

The individual who establishes an account. This person is responsible for verifying his or her eligibility to make a contribution.

 

 

 

Designated Beneficiary

 

In the case of a Coverdell ESA, this is the minor student. This individual must be under the age 18. They are responsible for taking distributions out of the account for higher education expenses prior to reaching the age of 30.

 

 

 

Direct AccessNotes(DAN's)

 

A straight forward fixed-income security specifically designed to permit individual investors to participate in original offerings of large U.S. corporations and are offered through broker-dealers.

 

 

 

Direct Rollover

 

When an eligible rollover distribution moves directly from the qualified plan into an IRA maintained at a financial organization designated by the individual.

 

 

 

Distribution

 

In relation to an IRA, a withdrawal of assets from an IRA account.

 

 

 

Dividends

 

A distribution of earnings to stockholders, prorated by class of security and most commonly paid in the form of cash or stock. The amount is decided by the board of directors and is usually paid quarterly. Dividends must be declared for tax purposes in the year they are received.

 

 

 

DJIA

 

An abbreviation for Dow Jones Industrial Average, a price-weighted average of 30 actively traded blue-chip stocks that typically trade on the New York Stock Exchange.

 

 

 

Dollar Cost Averaging

 

Method of accumulating assets by investing a fixed amount of dollars in securities at set intervals.

 

 

 

Dutch Auction

 

Auction system in which the price of an item is gradually lowered until it meets a responsive bid and is sold. US Treasury bills are sold in this manner.

 

 

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