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Glossary of Investment Terms

 

 

T

 

Tax-Equivalent Yield

 

Pretax yield that a taxable bond would have to pay to equal the tax-free yield of a municipal bond in an investor's tax bracket.

 

 

 

Tax Exempt

 

Free from tax.

 

 

 

Time Value

 

The amount (in options trading) an investor is willing to pay above an option's intrinsic value in order to buy and hold that option for the time remaining until the option expires.

 

 

 

Trade Date

 

Day on which a security or a commodity future trade actually takes place.

 

 

 

Traditional IRA

 

Personal, tax-deferred retirement account that an employed person can set up. IRA contributions are deductible regardless of income if neither the taxpayer nor the taxpayer's spouse is covered by a qualified plan or trust. If the taxpayer is covered by a QRP, they may deduct contributions if MAGI is below $50,000 on a joint return or $30,000 on a single return.

 

 

 

Treasury Bills

 

Short-term securities with maturities of one year or less issued at a discount from face value.

 

 

 

Treasury Bonds

 

Long-term debt instruments with maturities of 10 years or longer issued in minimum denominations of $1,000.

 

 

 

Treasury Inflation Protection Securities (TIPS)

 

Bonds issued by the U.S. Treasury that hedge the purchaser against the impact of inflation by semi-annually increasing the par value of the issue by the amount of inflation. These securities represent a real, inflation-adjusted yield. Because of this the coupon on TIPS is significantly lower than a non-TIP security.

 

 

 

Treasury Notes

 

Intermediate securities with maturities of 1 to 10 years. Denominations range from $1,000 to 1 million or more. The notes are sold by cash subscription, in exchange for outstanding or maturing government issues, or at auction.

 

 

 

Treasury Strips

 

STRIP stands for Separate Trading of Registered Interest and Principal of Securities. Strips are a pre-stripped zero coupon bond that is a direct obligation of the U.S. Treasury.

 

 

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