A comprehensive A-to-Z listing of 2,500 financial terms
- See: Weighted average
cost of capital.
- Waiting period
- Time during which the
securities and exchange commission (SEC)
studies a firm's registration
statement. During this time the firm may distribute a
- Wall Street
- Generic term for firms that buy, sell, and underwrite
- Wall Street analyst
- Related: Sell-side analyst.
- Stock that has fallen
out of favor with investors; tends to have a low
P/E (price to earnings ratio).
- Wanted for cash
- A statement displayed on market tickers indicating that
a bidder will pay cash for same
day settlement of a block of a specified
- Warehouse receipt
- Evidence that a firm owns
goods stored in a warehouse.
- The interim holding
period from the time of the closing of a
loan to its subsequent marketing to
capital market investors.
- A security entitling
the holder to buy a proportionate amount of
stock at some specified future
date at a specified price, usually one higher than current market.
This "warrant" is then traded as a security, the price
of which reflects the value of the
Warrants are issued by corporations and often used as a
"sweetener" bundled with another class of security
to enhance the marketability of the latter. Warrants are
like call options, but with
much longer time spans -- sometimes years. In addition, warrants are
offered by corporations whereas exchange traded call options are not
issued by firms.
- Gains equal losses.
- Wasting asset
- An asset which has a
limited life and thus, decreases in value
(depreciates) over time.
Also applied to consumed assets, such as gas, and termed
- Watch list
- A list of securities
selected for special surveillance by a brokerage, exchange or
regulatory organization; firms on the list are often takeover
targets, companies planning to issue new securities or stocks
showing unusual activity.
- Weak form efficiency
- A form of pricing
efficiency where the price of the
security reflects the past
price and trading history of the security. In such a market,
security prices follow a random walk. Related:
form efficiency, strong
- Weekend effect
- The common recurrent low or negative average return from
Friday to Monday in the stock
- Weighted average cost of capital
- Expected return
on a portfolio of all the firm's securities. Used as
a hurdle rate for capital
- Weighted average coupon
- The weighted average of the gross
interest rate of
underlying the pool as of the pool issue date, with the balance
of each mortgage used as the weighting factor.
- Weighted average life
- See:Average life.
- Weighted average maturity
- The WAM of a
MBS is the
weighted average of the remaining
terms to maturity of the mortgages underlying the
collateral pool at the date
of issue, using as the weighting factor the balance of each of the
mortgages as of the issue date.
average remaining maturity
- The average remaining term of the mortgages
underlying a MBS.
- Weighted average
- The weighted average
of the yield of all the
bonds in a portfolio.
- Well diversified portfolio
- A portfolio spread
out over many securities
in such a way that the weight in any security is small.
The risk of a well-diversified portfolio closely approximates
the systemic risk of the
overall market, the unsystematic risk of each security having
been diversified out of the portfolio.
- White knight
- A friendly potential acquirer
of a firm sought out by a target
firm that is threatened by a less welcome suitor.
- Whole life insurance
- A contract
with both insurance and investment components: (1) It pays off a
stated amount upon the death of the insured, and (2) it accumulates
a cash value that the policyholder can
redeem or borrow against.
- Wholesale mortgage banking
- The purchasing of loans originated by others, with the
servicing rights released to the buyer.
- When issued.
- Wi wi
- Treasury bills trade on a wi basis between the day they
are auctioned and the day settlement is made. Bills traded before
they are auctioned are said to be traded wi wi.
- Wild card option
- The right of the seller of a
to give notice of intent to deliver at or before 8:00 p.m.
Chicago time after the closing of the exchange (3:15 p.m. Chicago time)
when the futures settlement
price has been fixed. Related:
- Window contract
- A guaranteed investment contract
purchased with deposits over some future designated time period (the "window"), usually between 3 and 12 months. All deposits made are guaranteed the same credit rating.
Related: bullet contract.
- Winners's curse
- Problem faced by uninformed bidders. For example,
in an initial
public offering uninformed participants are likely
to receive larger allotments of issues that informed
participants know are overpriced.
- Wire house
- A firm operating a private wire to its own branch
offices or to other firms,
commission houses or
- With dividend
- Purchase of shares in which the buyer is entitled
to the forthcoming dividend.
- With rights
- Purchase of shares in which the buyer is entitled
to the rights to buy shares
in the company's rights issue.
- Withdrawal plan
- The ability to establish automatic periodic
mutual fund redemptions
and have proceeds mailed directly to the
- Withholding tax
- A tax levied by a country of source on income paid,
usually on dividends remitted
to the home country of the firm operating in a foreign
country. Tax levied on dividends paid abroad.
- If 70 were bid in the
market and there was no offer,
the quote would be "70 bid without." The expression "without"
indicates a one-way market.
- Without recourse
- Without the lender having any right to seek payment
or seize assets in the event of nonpayment from anyone other
than the party (such as a special-purpose entity) specified
in the debt contract.
- Sexual slang for a market moving strongly upward, as in,
"This market has a woody."
- Working capital
- Defined as the difference in
current assets and
(excluding short-term debt). Current assets may or may not
include cash and cash equivalents,
depending on the company.
- Working capital management
- The management of current
assets and current
liabilities to maximize short-term liquidity.
- Working capital ratio
- Working capital expressed as a percentage of sales.
- Informal arrangement between a borrower and
- Workout period
- Realignment period of a temporary misaligned
that sometimes occurs in fixed income markets.
- World Bank
- A multilateral development finance agency created by
the 1944 Bretton Woods,
New Hampshire negotiations. It makes loans to developing countries
for social overhead capital projects, which are guaranteed by the
recipient country. See:
International Bank for Reconstruction and Development.
- World investible wealth
- The part of world wealth that is traded and is therefore
accessible to investors.
- Decreasing the book value
of an asset if its book value is overstated compared to current market
- The seller of an option,
usually an individual, bank, or company, that issues the option
and consequently has the obligation to sell the asset (
if a call) or to buy the
asset (if a put) on which the option
is written if the option buyer exercises the option.
- W-type bottom
- A double bottom where the price or indicator chart has the
appearance of a W. See: