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Investments glossary

Gamma Definition

Gamma is the rate of change in an option’s delta per 1-point move in the underlying asset’s price. Gamma is an important measure of the convexity of a derivative’s value, in relation to the underlying. A delta hedge strategy seeks read more

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Investments glossary

Health Insurance

Health insurance is a type of insurance coverage that pays for medical, surgical, and sometimes dental expenses incurred by the insured. Health insurance can reimburse the insured for expenses incurred from illness or injury, or pay the care provider read more

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Investments glossary

Defined-Benefit Plan

A defined-benefit plan is an employer-sponsored retirement plan where employee benefits are computed using a formula that considers several factors, such as length of employment and salary history. The company administers portfolio management read more

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Investments glossary

Oil Price to Natural Gas Ratio

The oil price to natural gas ratio compares prices of crude oil and natural gas and is used as a measure of demand for each commodity. Energy analysts, traders and investors use the ratio when gauging the market of oil versus that of natural gas. In read more

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Investments glossary

Prime Cost

Prime costs are a firm’s expenses directly related to the materials and labor used in production. It refers to a manufactured product’s costs, which are calculated to ensure the best profit margin for a company. The prime cost calculates read more

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Investments glossary

Economy

An economy is the large set of inter-related production and consumption activities that aid in determining how scarce resources are allocated. The production and consumption of goods and services are used to fulfill the needs of those living and operating read more

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Investments glossary

Form 706

Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, is an Internal Revenue Service (IRS) form used by an executor of a decedent’s estate to calculate the estate tax owed according to Chapter 11 of the Internal Revenue read more

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Investments glossary

Gift Inter Vivos

A gift inter vivos, which means a gift between the living in Latin, is a legal term that refers to a transfer or gift made during the life of the grantor. Inter vivos gifts, which includes property related to an estate, are not subject to probate taxes read more

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Investments glossary

Commission

A commission is a service charge assessed by a broker or investment advisor for providing investment advice or handling purchases and sales of securities for a client.

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Investments glossary

Accounts Payable (AP)

Accounts payable (AP) is an account within the general ledger that represents a company’s obligation to pay off a short-term debt to its creditors or suppliers. Another common usage of AP refers to the business department or division that is read more