Business Glossary: D
AIM THIS PAGE
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
-
D
Fifth letter of a NASDAQ stock symbol specifying that it is a new issue, such as the result of a reverse split.
D/A See: Documents Against Acceptance
DCF See: Discounted Cash Flows
DSCR See: Debt-service coverage ratio
DDM The ISO 4217 currency code for former East Germany Ostmark.
DDM See: Discounted Dividend Model
DE The two-character ISO 3166 country code for GERMANY.
DEM The ISO 4217 currency code for Deutschemark.
DEQ Abbreviation for the Incoterm "Delivered Ex Quay."
DES Abbreviation for "Delivered Ex Ship."
DISC See: Domestic International Sales Corporation
DITM See: Deep in the money
DJ The two-character ISO 3166 country code for DJIBOUTI.
DJF The ISO 4217 currency code for Djibouti Franc.
DK The two-character ISO 3166 country code for DENMARK.
DKK The ISO 4217 currency code for Danish Krone.
DM The two-character ISO 3166 country code for DOMINICA.
DNR Order See: Do Not Reduce Order
DO The two-character ISO 3166 country code for DOMINICAN REPUBLIC.
DOP The ISO 4217 currency code for Dominican Republic Peso.
DOT See: Designated Order Turnaround System
DOTM See: Deep out of the money
D/P Abbreviation for Documents Against Payment.
DRP See: Dividend Reinvestment Plan
DTC See: Depository Transfer Check
DTC See: Depository Trust Company
DTCC See: Depository Trust and Clearing Corporation
DZ The two-character ISO 3166 country code for ALGERIA.
DZD The ISO 4217 currency code for Algerian Dinar.
Daily price limit The level within many commodity, futures, and options markets are allowed to rise or fall in a day. Exchanges usually impose a daily price limit on each contract.
Daisy chain Manipulation of the market by traders to create the illusion of active volume to attract investors.
Date of issue Used in the context of bonds to refer to the date on which a bond is issued and when interest beings to accrue to the bondholder. Used in the context of stocks to refer to the date trading begins on a new stock issued to the public.
Date of payment Date dividend checks are mailed.
Date of record Date on which holders of record in a firm's stock ledger are designated as the recipients of either dividends or stock rights.
Dated date The date one uses to calculate accrued interest on various debt instruments, specifically bonds.
Dates convention Treating cash flows as being received on exact dates-date 0, date 1, and so forth-as opposed to the end-of-year convention.
Dating Credit extension beyond normal terms of a credit supplier.
Dawn raid A term of British origin used to describe the purchase of all available shares of a target company at the market's open by a raider. A dawn raid is a surprise technique that allows the raider to gain a substantial share of the target company before the target company knows what is happening.
Day around order A day order that supersedes (cancels and replaces) the previous order by altering its size or price limit.
Day of deposit to day of withdrawal account A bank account that pays interest according to the number of days that the money is actually on deposit.
Day loan A loan from a bank to a broker prior to the delivery of securities. Upon the delivery of the securities, a day loan becomes a regular broker call loan for which securities serve as collateral.
Day order In the context of general equities, request from a customer to either buy or sell stock, that, if not canceled or executed the day it is placed, expires automatically. All orders are day orders unless otherwise specified. Traders often make calls before the opening to check for renewals.
Day trade Also known as a "daylight trade." The purchase and sale or the short sale and cover of the same security in a margin account on the same day.
Day trading Establishing and liquidating the same position or positions within one day's trading.
Days in receivables Average collection period.
Days' sales in inventory ratio The average number of days' worth of sales that is held in inventory.
Days' sales outstanding Average collection period.
De facto Existing in actual fact although not by official recognition.
Dead cat bounce A small upmove in a bear market.
Deal flow In investment banking, the rate at which new deals are referred to a brokerage firm.
Deal stock Stock subject to merger or acquisition, either publicly announced or rumored.
Dealing desk (Trading desk) Personnel at an international bank who trade spot and forward foreign exchange.
Dealer An entity that stands ready and willing to buy a security for its own account (at its bid price) or sell from its own account (at its ask price). Individual or firm acting as a principal in a securities transaction. Principals are market makers in securities, and thus trade for their own account and risk. Antithesis of broker. See: Agency.
Dealer loan Overnight, collateralized loan from a money market bank made to a dealer financing his position by borrowing.
Dealer market Where traders specializing in particular commodities buy and sell assets for their own accounts.
Dealer options Over-the-counter options, such as those offered by government and mortgage-backed securities dealers.
Dealer's spread See: markdown; underwriting spread.
Dear money British term for tight money.
Death-backed bonds Bonds backed by loans of a policyholder against a life insurance policy. The policyholder will repay the loans while alive or with the benefits from the insurance policy upon death.
Death play A stock strategy that buys stock on the belief that a key executive will die, the company will be dissolved, and shares will command a higher price at their private market value.
Death Spiral Convertible Used by companies that are in such bad shape, that there is no other way to get financing. This instrument is similar to a convertible bond, but convertible at a discount to the share price at issuance and for a fixed dollar amount rather than a specific number of shares. The further the stock falls, the more shares you get. Popular in the mid to late 1990s. Also known as toxic convertibles or floorless convertibles.
Death Valley Curve In venture capital, refers to the period before a new company starts generating revenues, when it is difficult for the company to raise money.
Debenture Any debt obligation backed strictly by the borrower's integrity, e.g. an unsecured bond. A debenture is documented in an indenture.
Debenture bond An unsecured bond whose holder has the claim of a general creditor on all assets of the issuer not pledged specifically to secure other debt. Compare subordinated debenture bond and collateral trust bonds.
Debenture stock A type of stock that makes fixed payments at scheduled intervals of time. Debenture stock differs from a debenture in that it has the status of equity, not debt, in liquidation.
Debit An expense, or money paid out from an account. A debit transaction is one which the net cost is greater than the net sale proceeds. See also Credit.
Debit balance The amount that is owed to a broker by a margin customer for loans the customer uses to buy securities.
Debit card A card that resembles a credit card but which debits a transaction account (checking account) with the transfers occurring contemporaneously with the customer's purchases. A debit card may be machine readable, allowing for the activation of an automated teller machine or other automated payments equipment.
Debit spread Applies to derivative products. Difference in the value of two options, when the value of the option bought exceeds the value of the one sold. One buys a "debit spread." Antithesis of a credit spread.
Debt bomb A default on debt and obligations by a major financial_institution that disrupts the stability of the economic system.
Debt capacity Ability to borrow. The amount a firm can borrow up to the point where the firm value no longer increases.
Debt ceiling See: Debt limit
Debt displacement The amount of borrowing that leasing displaces. Firms that do a lot of leasing are curtailed in their debt capacity.
Debt/equity ratio Indicator of financial leverage. Compares assets provided by creditors to assets provided by shareholders. Determined by dividing long-term debt by common stockholder equity.
Debt-for-equity swap A swap agreement to exchange equity/returns for debt returns or the converse over a prearranged length of time.
Debt instrument An asset requiring fixed dollar payments, such as a government or corporate bond.
Debt leverage Amplification of the return earned on equity when an investment or firm is financed partially with borrowed money.
Debt limit The maximum amount that a municipality can borrow.
Debt limitation A bond covenant that restricts the firm's ability to incur additional indebtedness in some way.
Debt market The market for trading debt instruments.
Debt outstanding subject to limitation Obligations incurred by the Treasury subject to the statutory limit set by Congress. Until World War 1, a specific amount of debt was authorized for each separate security issue. Beginning with the Second Liberty Loan Act of 1917, the nature of the limitation was modified until, in 1941, it developed into an overall limit on the outstanding Federal debt. The statuatory limit may change from year to year.
Debt ratio Total debt divided by total assets.
Debt relief Reducing the principal and/or interest payments on Less developed country loans.
Debt retirement The complete repayment of debt. See: Sinking fund.
Debt securities IOUs created through loan-type transactions-commercial paper, bank CDs, bills, bonds, and other instruments.
Debt service Interest payment plus repayments of principal to creditors (retirement of debt).
Debt service coverage The ratio of cash flow available to the borrower to the annual interest and principal payments on a loan or other debt.
Debt-service coverage ratio Earnings before interest and income taxes, divided by interest expense plus the quantity of principal repayments divided by one minus the tax rate.
Debt service parity approach Payment alternatives that provide the firm with the exact same schedule of after-tax debt payments (including both interest and principal).
Debt swap A set of transactions in which a firm buys a country's dollar bank debt at a discount and swaps this debt with the central bank for local currency that it can use to acquire local equity. Also called a debt-equity swap.
Debtholder See: Bondholder
Debtor in possession A firm that continues to operate under the Chapter 11 bankruptcy process.
Debtor-in-possession financing New debt obtained by a firm during the Chapter 11 bankruptcy process, Federal Bankruptcy Rule 4001 (c)(1). This financing is unique because it is secured, that is, it has priority over existing debt, equity and other claims.
Decile rank Performance over time, rated on a scale of 1-10. 1 indicates that a mutual fund's return is in the top 10% of funds being compared; while 3 means the return is in the top 30%.
Decimal trading The quotation and trading of stock or bond prices in decimals, as opposed to the quotation of prices in fractions.
Decimalization The quotation and trading of stock or bond prices in decimals, as opposed to fractions such as eighths.
Decision Break-Point Analysis A type of sensitivity analysis that indicates the value at which a key variable will result in a negative NPV for an investment project.
Decision tree Schematic way of representing alternative sequential decisions and the possible outcomes from these decisions.
Declaration date The date on which a firm's directors meet and announce the date and amount of the next dividend.
Declaration The Board of Directors motion to authorize dividend payments.
Dedicated capital Total par value (number of shares issued, multiplied by the par value of each share). Also called dedicated value.
Dedicating a portfolio Related: Cash flow matching
Dedication strategy Refers to multiperiod cash-flow matching.
Deductible An amount or period which must be deducted before an insurance payout or settlement is calculated.
Deductible contribution Amount paid into an IRA, an employer-sponsored retirement plan, or other type of retirement plan for a particular tax year that is a deduction from income for tax purposes.
Deduction An expense that is allowable as a reduction of gross taxable income by the IRS e.g., charity donations.
Deductive reasoning Using known facts to draw a conclusion about a specific situation.
Deed of trust See: Indenture
Deep-discount bond A bond issued with a very low coupon or no coupon that sells at a price far below par value. A bond that has no coupon is called a zero-coupon bond.
Deep in the money A call option with an exercise price substantially below the underlying stock's market price. Also put option with an exercise price substantially above the underlying stock's market price. Often substantially below is defined as more than one strike price below (for calls)/above (for puts) the current value of the underlying security.
Deep out of the money A call option with an exercise price substantially above the market price. Also put option with an exercise price substantially below the underlying stock's market price. Often substantially below is defined as more than one strike price below (for calls)/above (for puts) the current value of the underlying security.
Default The failure to make timely payment of interest or principal on a debt security or to otherwise comply with the provisions of a bond indenture. A breach of a covenant. In context of project financing, a technical default signals a project parameter is outside defined or agreed limits or a legal matter is not yet resolved.
Default interest A higher interest rate payable after default.
Default premium
A differential in promised