MARKET STRUCTURE DICTIONARY

B 1. Historically, a bid price shown on the ticker tape without an offer price would show the bid price followed by the letter "B" (XYZ. 50. B). A bid price and an offer price together would be separated by @ (XYZ 50@1-8). On some tickers, three dots (...) replaced the @ (XYZ 501-8). 2. A written abbreviation of buy.

back away 1. Trader's lingo to describe the failure of a market maker to honor his "firm" quote. Previously against exchange regulations.  For example, If I didn't know better, I'd say the ZVZZT trader at Acme Bank backs away more often than he actually gives the Street a print. Under Regulation National Market System (Reg NMS), market makers and others may generate and cancel quotes freely and without obligation.  2. To remove a previously indicated trading interest. For example, The Fed is out in a few minutes. Let's back away from XYZ and ZVZZT for a while.

back office All of the administrative and clerical functions that support the trading desk of a broker/dealer. These functions include the confirmation, clearance, settlement, and reconciliation of trades, record keeping, and regulatory compliance. Officially known as the operations department. See also FRONT OFFICE and MIDDLE OFFICE.

back on the shelf Trader's lingo to describe the status of a cancelled order or a cancelled indication of interest. For example, ZVZZT, lets put that order back on the shelf for now. We can revisit later today.

back to sleep A sarcastic statement sometimes made to a trader who appears to be less than vigilant in working an order or monitoring pertinent market action. For example, Sorry, I didn't realize Morgan had advertised that much XYZ today. I can try to find out what's going on. --- No, just forget it. Back to sleep

back up 1. Reverse the prevailing trend. 2. A sales trader that is assigned to an account in the absence of the primary coverage person

back up the truck A slang term meaning "buy a large quantity of shares." For example, ZVZZT, let's buy a little at $25.25 and a little at $25.20, then lets back up the truck at $25.15

back book Industry jargon for a dealer's proprietary trading account. Implies that customer orders have priority over dealer proprietary trades. The dealer is "in back" of his customers

backed in Industry lingo to describe a trade that has been executed on more favorable terms than originally expected due to unforeseen circumstances. For example, XYZ, you're done at a quarter. Boy we really backed in to that one

bad delivery A situation in which a security presented to settle a trade does not fulfill all of the requirements necessary to transfer ownership to the buyer.

bag holder A slang term for a trader who holds a losing position nearly to the point of worthlessness. Such a person is said to be left "holding the bag.

bagel land A slang term for $0. A stock that is "heading to bagel land" is approaching the point of worthlessness

bagger Equal to a 100% gain. Two Bagger = 200%, Three Bagger = 300%, etc. See also HOME RUN.

bail out To sell a position very quickly in anticipation of a (further) price decline. For example, It might be time to bail out of our XYZ position. The stock looks like it may be headed to bagel land.

baked in (the cake) Describes all of the information currently contained in a stock's price, as in I hope the stock rallies on earnings, but my guess is any good news is already baked in.

balance The unexecuted portion of an order, as in ZVZZT, you've bought 25,000 so far at $24.90, working the balance of 25,000 with an ultimate $25 top.

balance sheet, use the Industry lingo meaning commit capital. For example, Fast guy on line two asking about our ZVZZT indication. We're probably going to have to use the balance sheet on this one.

ballooning Working to raise the price of a stock to a level far beyond its intrinsic value.

Baltimore Stock Exchange A regional stock exchange that was located in Baltimore, Maryland. Merged with the Philadelphia Stock Exchange in 1949.

Baltimore Stock Exchange circa 1906

Photo Credit:  Library of Congress

bang the market Sell aggressively at increasingly lower prices. For example, I need to sell some stock. Let's bang the market a little and see if we run into a real buyer.

banker's pool A group of prominent financiers that combined resources during the Wall Street Crash of 1929 in a futile attempt to support certain key stocks.

baptism by fire Describes a situation in which a rookie trader with little practical experience is compelled to make an important trading decision very quickly.

barefoot pilgrim A slang term for an unsophisticated trader that has lost all of his speculative capital, as in This kind of market action could make a barefoot pilgrim out of the best of us.

bargain 1. A mutual contract, agreement, or understanding. 2. Historically, a trade between two members of the London Stock Exchange. 3. Relatively inexpensive.

bargain counter A somewhat archaic term for an imaginary place where great prices are available on attractively valued stocks. Such stocks are said to be "for sale on the bargain counter."

bargain hunter  A buyer who is looking to purchase shares at extremely low prices. Such traders are generally far more price sensitive than time sensitive.

bargain hunting An oft cited reason for any inexplicable rally following a decline in prices, as in There was a broad advance in the market today on bargain hunting. See also PROFIT TAKING.

barometer A specific economic or market data point used to indicate overall conditions or trends.

barometer stock A stock that many traders believe to indicate overall market conditions. For example, We should start watching ZVZZT more closely. It looks like it may be replacing XYZ as the tech barometer stock.

basis  The basis of a HEDGE PORTFOLIO is the is the price difference between the various components of the portfolio.  See also FAIR VALUE.

basis point Equal to 1/100 of 1%. Most commonly refers to bond yields and interest rates. For example, an interest rate of 5% is said to be 50 basis points higher than a rate of 4.5%.

basket A group of stocks brought together with the intention of trading them all simultaneously. See also STATISTICAL ARBITRAGE and PROGRAM TRADING.

basket market A market in which dealers make firm quotes for entire portfolios rather than for individual stocks. Also known as a firm bid/offer market, a package trading market, or a portfolio trading market.

basket trade An order to buy or sell multiple securities simultaneously. See also PROGRAM TRADING.

batched trade A type of trade in which multiple orders in a particular stock are accumulated over a period of time and subsequently executed simultaneously. Orders marked for the opening and for the close are often batched for execution as are orders executed in crossing networks.

bath A slang term for a substantial loss, as in Thanks a lot we really took a bath in that XYZ stock your shop has been out recommending.

BATS Exchange The Better Alternative Trading System was originally founded in 2005 as an electronic communications network. BATS became an official electronic exchange in 2009. BATS currently operates the BZX Exchange and the BYX Exchange and ranks as the third largest U.S. equity market.  Merged with Direct Edge in 2013.  

BBO An abbreviation of best bid and offer.

bear 1. A trader who believes in and/or works to secure lower prices, as in John has turned into one of the biggest bears out there. 2. A short seller, as in If the market moves any higher, I might scale out of my longs and become a bear.

Bear versus bull, 1903

Photo Credit:  Library of Congress 

bear account Industry jargon for the aggregate short position in a stock.

bear campaign A systematic and sustained (and now illegal) effort by a group of market operators to move stock prices lower. See also BEAR RAID.

bear clique An informal group of market operators who work to secure lower prices.

bear dance Industry lingo to describe the actions of a short seller who is compelled to cover, or is frightened into covering, his positions at a loss. A somewhat milder form of a BEAR PANIC.

bear market A sustained period of general price declines, usually exceeding 20%. For example, With last Friday's decline, we officially entered bear market territory.

bear market rally A sharp but short lived rise in stock prices during a longer term bear market. For example, Don't get too caught up in this week's positive action. My gut tells me it's just a bear market rally.

bear of stocks Historically, a London term equivalent to short of stocks.

bear panic Industry lingo to describe the actions of short sellers who are compelled to cover, or are frightened into covering, their positions at a loss. A more severe situation than a BEAR DANCE.

bear pool A POOL formally organized by a group of market operators who believe in and/or work to secure lower prices.

bear position See SHORT POSITION.

bear raid An illegal speculative operation in which a group of traders (or less commonly a single speculator) aggressively work to force down the price of a stock through heavy selling and/or short selling.

bear squeeze Industry lingo to describe the predicament of short sellers who are compelled to cover their positions at a loss due to strong market conditions. Also known as a short squeeze.

bear tack A speculator who is short of stocks is said to have "taken the bear tack." Also known as the short tack.

bear trap Industry slang for the quiet accumulation by an single individual (or by a clique) of a substantial percentage of stock that is sold short during a bear campaign. The ultimate intent is to carry up the stock and force the short sellers to cover on unfavorable terms. For example, It looks like the Commodore sprung yet another bear trap on the XYZ shorts. He is truly the master.

bearing the market Industry lingo for the act of purposely forcing prices lower. See also BEAR CAMPAIGN and BEAR RAID.

bearish The belief that a particular stock, a sector, or the whole market will decline. For example, The market looks a little toppy to me, but maybe I'm just turning bearish.

beating the gun Obtaining favorable prices due specifically to the speed of order entry and execution. For example, Nice job beating the gun on that ZVZZT trade. Maybe you aren't as slow as I've heard.

Beecher Tool and Die A old prank played on rookie over-the-counter traders. The new trader would be asked to call a competing market maker to ask for a quote in "Beecher Tool and Die." (Say it out loud)

behind A trading term meaning "in addition." For example, ZVZZT, I have 50,000 to buy in here, more behind.

behind the market Describes a limit order that is not IN LINE with current market prices. Also known as away from the market. For example, XYZ, take 15,000 to buy with a $49 top. I know I'm behind the market right now, but maybe the stock comes in.

behind you Trader's lingo used to indicate the status of orders held in a exchange limit order book at the same price as your order, but entered after your order. You are said to have time precedence. For example, We can cancel your XYZ order on the floor if you really think it will force an execution. But just so you know, there is a lot of stock offered behind you at a quarter right now. In contrast to AHEAD OF YOU.

bell Traditionally on a stock exchange, a bell is rung to signal the open (OPENING BELL) and the close (CLOSING BELL) of the regular trading session.

bellwether stock 1. A stock that is widely believed to lead the market, as in My guess is that XYZ becomes the next tech bellwether stock. 2. A stock with a well established reputation for quality, stability, and liquidity. For example, ZVZZT has been a bellwether stock for years, and I doubt that changes any time soon.

belly up A slang term to describe a trader that has lost all of his speculative capital or a company that has gone bankrupt. For example, I'm not going to cover my XYZ short until the company actually goes belly up.

below par 1. A market price below $100 per share. For example, XYZ just dropped below par. My guess is it sees $90 before it sees $110 again. 2. Describes the price of a security when it is trading below its PAR (or face) value.

below the market Describes an order/indication to buy (or sell) a stock at a price that is lower than the current market price. Possible examples include a buy limit order, a sell stop order, and a sell stop limit order. For example, ZVZZT, I've got 50,000 more to buy, but I'm below the market for now. Also known as beneath the market.

belt See UNDER MY BELT.

benchmark 1. A standard against which trading performance is measured. Two important benchmarks are the VOLUME WEIGHTED AVERAGE PRICE (VWAP) and the ARRIVAL PRICE. 2. A group of securities (such as a broad market index or sector-specific index) against which investment performance is measured. See also BOGEY.

beneath the market Describes an order/indication to buy (or sell) a stock at a price that is lower than the current market price. Possible examples include a buy limit order, a sell stop order, and a sell stop limit order. For example, ZVZZT, I've got 50,000 more to buy, but I'm beneath the market for now. More commonly known as below the market.

beneath you Another term for behind you.

best ask The lowest firm price that sellers are willing to accept for a round lot of stock. Also called best offer. See also ASK.

best bid The highest firm price that buyers are willing to pay for a round lot of stock. See also BID.

best bid and offer (BBO) The best bid and the best offer available for a given stock at a particular time. Distilled from the firm quotes of all market participants. See also NATIONAL BEST BID AND OFFER (NBBO).

best execution requirement 1. The legal obligation of broker/dealers under Regulation National Market System (Reg NMS) to execute customer orders in a timely manner at the best possible price. 2. The obligation of institutional traders to obtain the highest quality execution possible while balancing the parameters of price, speed, anonymity, and likelihood of execution.

best offer The lowest firm price that sellers are willing to accept for a round lot of stock. Also called best ask. See also OFFER.

best way order Trader's lingo for a market not held order, as in Take 25,000 ZVZZT for sale best way.

beta  A measure of the sensitivity of a portfolio to market movements.  The beta of the market is 1.00 by definition.  See also ALPHA.

better, or (OB) A term used to stipulate that the limit price on a buy order is higher than the current market price, or the limit price on a sell order is lower than the current market price. Usually implies a desire to trade fairly aggressively to the limit, but an expectation of a receipt of more favorable partial executions than the limit price in the process. For example, It looks like ZVZZT is offered small at $25.30 right now. I'd buy 25,000 at $25.40 or better. See also TOP and LOW.

better buyer A dealer term meaning "greater interest in buying stock than selling stock at the current price level." For example, XYZ, we've sold 50,000 today, but right now we're a better buyer.

better seller A dealer term meaning "greater interest in selling stock than buying stock at the current price level." For example, ZVZZT, we trade 50,000 at a half, come out a better seller.

bid 1. A market quote that stipulates the highest price that buyers are willing to pay for a stock (the bid price), and the total amount of stock that is wanted at that price (the bid size). As a quote, the bid is expressed as "price for quantity," as in ZVZZT is bid $25.20 for 100,000. 2. A dealer quote that stipulates a price and the amount of stock the dealer is willing to buy at that price. For example, XYZ, right now I can bid $50 for 25,000. 3. An abbreviation of bid price, as in ZVZZT is $25 bid, offered at $25.10.

bid ahead A term used to indicate the status of buy limit orders held in an exchange limit order book at a higher price than your buy order, or at the same price as your order but entered before your order. Such orders are said to have time precedence or price priority. For example, I put 10,000 shares in the book for you, but it looks like its bid ahead at a quarter right now. See also STOCK AHEAD.

bid and asked See QUOTE.

bid and offer See QUOTE.

bid away In the context of over-the-counter trading, a term to used stipulate the existence of a bid equal to (listed stocks) or higher than (non-listed stocks) the bid quoted by the trader making the bid. For example, ZVZZT, right now I can pay $25.50 for stock. Looks like its bid away at $0.60 though. I can't compete there.

bid for stock A dealer phrase used to indicate a willingness to commit capital in order to attract a large natural seller. For example, ZVZZT, I've got nothing on the desk right now, but I'd bid for stock to start a conversation. See also OFFER STOCK.

bid price The highest firm price that buyers are willing to pay for a round lot of stock. See also BID.

bid size The amount of stock that is wanted at the bid price. See also BID.

bid up A situation in which stock is repeatedly bid for at a price that is higher than the last sale price, as in The way they've bid up the stock, somebody must know something. See also BIDDING UP.

bid wanted An announcement made by a holder of a block of stock of an interest in selling the position and a willingness to entertain bids.

bid whacker One who HITS THE BIDS very aggressively.

bid/ask spread See BID/ASKED SPREAD.

bid/asked bounce Describes the (often constant) fluctuation of the last sale between the bid price and the asked price as traders who value immediacy buy stock on the offer or sell stock on the bid.

bid/asked spread The difference between the bid price and the asked price. According to the academic literature, markets with ASSYMMETRICALLY INFORMED TRADERS,  with relatively high VOLATILITY, or with few UTILITARIAN TRADERS will have relatively wide bid/asked spreads.  

bidding buyer A relatively non-aggressive trader who would rather wait for a natural seller than purchase stock in the open market. The hope is that patience will be rewarded with a more favorable purchase price. Such a trader is more sensitive to price and market impact than to volume and immediacy.

bidding price Another term for bid price.

bidding through the market Paying higher than the current asked price in order to increase the likelihood of execution. An aggressive trading strategy employed by a trader who is more sensitive to volume and immediacy than to price and market impact. For example, I've been bidding through the market in XYZ trying to get you done before the close, but it looks like it isn't going to happen. Reg NMS prohibits trading through protected quotes but allows an exemption for intermarket sweep orders.

bidding up Increasing the price of a buy limit order in an attempt to purchase stock in a rising market. Also known as chasing the market. For example, My guy keeps bidding up for stock, but the market is on fire today. See also BID UP.

BIDS Trading A dark pool owned by a consortium of large financial firms and the New York Stock Exchange. It is open to both broker/dealers and institutional investors.

Big Bang October 27, 1986. The day that the London securities markets were significantly deregulated.

Big Board Industry lingo for the New York Stock Exchange. Historically, the group of New York brokers that had loosely organized themselves in 1792 by signing the Buttonwood Agreement adopted their first formal constitution in 1817. At that point, the group collectively named themselves the New York Stock and Exchange Board. The Exchange had many rivals during the 19th century but always remained the most formidable and elite exchange. Thus, it was known the Big Board. The Exchange changed its name to the New York Stock Exchange in 1863. See also LITTLE BOARD.

big figure The whole dollar portion of a price or quote, removing any fractions or decimals. Also called the full. For example, XYZ, I'd lose 15,000 at the big figure. See also AT THE FIGURE, FIGURE TOP, and FIGURE LOW.

big picture Describes a large, usually natural, trading situation or indication of interest. For example, ZVZZT, we've got a big picture developing. Let me know if you need any protection. See also PICTURE.

big uglies Unfashionable, but profitable, old industrial companies.

bips An abbreviation for basis points, as in XYZ, it looks like margins declined by twenty bips this quarter.

bit A slang term for one eighth of one dollar, or 12 1/2 cents. Originally, a bit was a physical piece of money that circulated in early America. Eight bits together made one Spanish dollar or "piece of eight." Thus, trading in fractions has had a long history in the United States.

black, in the Profitable.

black balled Denied membership on an exchange. Historically, the constitution adopted by the New York Stock and Exchange Board in 1817 called for the admission of new members by vote of the overall membership. No person would be allowed to join if three votes, represented by black balls, were cast against him. He was effectively "black balled." Done extensively during the early history of the Exchange when it acted like a private men's club as much as it did an exchange.

black book Historically, a private book maintained by banks or other financial institution that contained a list of individuals who had lost their credit due to a failure to meet financial obligations. Also known as a black list.

Black Box ticker A slang term for the stock ticker tape machine developed by the New York Quotation Company in 1930 that operated at 500 characters per minute. This was twice the speed of previous ticker tape machines. It was replaced in 1964 by the 900 ticker.

Black Friday (1869) Friday, September 24, 1869. Also known as the Fisk/Gould Scandal. A financial panic precipitated by the efforts of Jay Gould to corner the gold market.

New York Gold Room, Black Friday 1869

Photo Credit:  Library of Congress

black list See BLACK BOOK.

Black Monday (1929) Monday, October 28, 1929. Black day #2 of 3 of the Wall Street Crash of 1929. After falling heavily on Black Thursday (October 24), the market stabilized a bit on Friday and Saturday. However, very heavy selling resumed on Monday with the Dow Jones Industrial Average dropping 38.33 points, or 12.82%. The massive selling continued on Black Tuesday.

Black Monday (1987) Monday, October 19, 1987. The Dow Jones Industrial Average fell 508 points (22.61%), the largest point drop in history to that date and still the biggest one day percentage loss.

black swan A rare, unexpected event that is almost impossible to predict.

Black Thursday (1929) Thursday, October 24, 1929. Black day #1 of 3 of the Wall Street Crash of 1929. After weeks of turbulent trading, the market broke sharply on record volume. While prices recovered a bit in the afternoon as the BANKERS POOL entered the market with large buy orders, Black Thursday nevertheless pre-staged the catastrophic events of Black Monday and Black Tuesday.

Black Tuesday (1929) Tuesday, October 29, 1929. Black day #3 of 3 of the Wall Street Crash of 1929. After a serious down move the prior Black Thursday and the very substantial break of Black Monday, the Dow Jones Industrial Average fell an additional 30.57 points, or 11.73%, on record volume. To many historians, Black Tuesday signaled the end of the Roaring '20s and ushered in the Great Depression.

blind brokering Ensuring anonymity to all customers in an agency transaction. Almost all brokered trades are "blind." However, a dealer must disclose his role in any trade in which he acted as principal.

blind pool A formally organized speculative POOL in which control is vested in a single operator for a specific period of time.

block A large number of shares or a high dollar amount of a single stock. While there is no official minimum, a block of stock generally equals or exceeds 10,000 shares or $200,000.

block assembler A general term for a trader who arranges block trades on an agency basis. Synonym for block broker.

block broker A general term for a trader who arranges block trades on an agency basis. Synonym for block assembler.

block call A pre-opening meeting in which sell side traders convey their large orders, indications of interest, and trading preferences to the firm's sales/trading force.

block crossing network See CROSSING NETWORK.

block dealer A general term for any non-specialist dealer who stands ready to fill customer block orders by committing capital from his own proprietary account. Officially known as a block positioner.

block facilitator A general term for any non-specialist dealer who stands ready to fill customer block orders by committing capital from his own proprietary account. Officially known as a block positioner.

block house A broker/dealer firm that specializes in arranging block trades.

block initiator  A trader who actively seeks to purchase or sell a block of stock.  Faces four primary difficulties.  1)  It may be difficult to uncover LATENT TRADERS.  2)  Other traders may fear that exposure of their orders to a block initiator will have negative repercussions.  3)  A block initiator may face PRICE DISCRIMINATION from traders who are afraid to trade with a block initiator.  4)  Other traders may fear that a block trader is an ASYMETRICALLY INFORMED TRADER.  

block liquidity suppler A general term for a block positioner or large buy side trader.

block list A list of stocks that the trading desk at a broker/dealer has interest in buying or selling in large quantities. May or may not represent natural order flow. Usually disseminated to the sales/trading force at the beginning of each trading day.

block market See UPSTAIRS MARKET.

block order An order for a large number of shares or a high dollar amount of a single stock. While there is no official minimum, a block order generally equals or exceeds 10,000 shares or $200,000.

block positioner The "official" term for any non-specialist dealer who stands ready to fill customer block orders by committing capital from his own proprietary account. More generally known as a block dealer or a block facilitator.

block reserve order An electronic limit order entered on an exchange or into an electronic communications network that makes only a small quantity visible to other market participants and holds the majority of the order hidden from view yet accessible for execution.

block size A large number of shares or a high dollar amount of a single stock. While there is no official minimum, a block of stock generally equals or exceeds 10,000 shares or $200,000.

block trade A trade that involves a large number of shares or a high dollar amount of a single stock. While there is no official minimum, a block trade generally equals or exceeds 10,000 shares or $200,000.

block trader  A trader who specializes in arranging block trades. Block traders could be either a block broker or a block positioner. 

block trading dark pool A DARK POOL that seeks to arrange large trades.

blockholder A large SHAREHOLDER.

bloodletting A slang term for widespread, substantial losses, as in If this bloodletting continues, there's going to be a lot of ex-traders on the Street.

Bloomberg Professional An electronic service offered by Bloomberg L.P. that allows users to monitor and analyze real time market data. The service also provides news, instant messaging, order entry capabilities, and access to the Bloomberg Tradebook. Considered by many to be one of the most important tools of the professional trader.

Bloomberg Television A financial news network owned and operated by Bloomberg L.P.

Bloomberg Terminal A stand alone computer system that allows users to directly access the Bloomberg Professional service.

Bloomberg Tradebook An agency broker and electronic communications network owned and operated by Bloomberg L.P.

blotter A log maintained by a dealer of daily customer trading activities. Includes orders entered and executed along with corresponding details. Also known as a trade blotter.

blow off Industry slang for a climax in buying or selling action, as in After a blow off like that, I bet we see a rally over the next week or two.

blue chip stock The stock of a solid company with a record of stable long term earnings growth and dividend payments. Blue has historically been the color of the poker chip assigned the highest value.

blue collar trade A trade that ends up requiring more work to execute than was originally anticipated. For example, ZVZZT is moving higher, but volume has almost totally dried up. Looks like we're going to have to blue collar this trade.

blue collar trader A slang term for a non-professional trader.

Blue Room The third trading room added to the floor of the New York Stock Exchange. The room was opened in 1969 and closed in 2007, but subsequently reopened to trade NYSE Amex options.

blue sky laws State laws that govern stock trading.

bluffing  Generating market activity that other traders are likely to misinterpret, and profiting when those traders subsequently trade imprudently.  A form of stock manipulation.  Two common forms of bluffing are LAYERING and SPOOFING.

board 1. Industry jargon for exchange. See BIG BOARD, LITTLE BOARD, and OUTSIDE BOARD. 2. Originally, an abbreviation of chalk board. At first, quotes and trades in brokerage offices were written on chalk boards. More recently, any relatively large display system used to post quotes has been referred to as a board. See also BOARD ROOM.

Board from the New York Gold Room on September 24, 1869 (Black Friday)

Photo Credit:  Library of Congress

board lot The exchange determined standardized number of shares in a single trading unit. Usually 100 shares. Also known as an even lot, a full lot, a regular lot, or a round lot.

board order A conditional buy (or sell) order that automatically converts to a market order if the stock price falls (or rises) to a certain predetermined market price. Similar to a stop (loss) order except the actions are reversed. Also known as a market if touched order.

board room 1. The trading room of an exchange. See also BOARD. 2. A room in the offices of a broker/dealer that has been reserved for individual customers to congregate, read quotes from the board, and enter orders. Also known as a customer's room.

bobtail pool Industry lingo for an informal POOL. Specifically, a group of operators who would act in concert but not hire an official pool manager to direct trading activity.

bodies are buried Trader's slang to describe hidden sources of liquidity. Used to describe customers who might have interest in trading a block of a particular stock but who have not publically indicated such interest (or who might even be hiding their interest). A sell side trader who knows where the bodies are buried in a stock can make himself very valuable to interested buy side customers.

bogey A slang term for a benchmark used to evaluate the performance of an institutional investor. For example, If the market stays range-bound for the rest of the quarter, we're never going to hit our bogey.

bona fide error An unintentional trading error. An honest mistake.

bonanza A slang term for a highly profitable operation, as in If this trade turns out to be the bonanza that I think it will, I should be able to keep my seat for a little while longer.

book 1. A list of a positions maintained by a dealer. 2. An abbreviation of specialist's book. 3. An abbreviation of book of business. 4. See BUILD A BOOK.

book of business A broker's list of accounts and commissions generated.

book profit An unrealized gain on a position.

booked the trade Literally means "sent the trade to the back office for clearing." If an institutional customer tells a sell side trader that he has "booked the trade," it is actually the same as telling him that the order is finished.

boom A slang term for a rapid expansion of business accompanied by an upturn in share prices. For example, This boom is getting a little long in the tooth. I may look to put out a line in XYZ.

booth A room or private area maintained by a member firm on the trading floor of an exchange. Used as a central order routing and communications hub for the firm's floor brokers and floor clerks. For example, Call the booth and have them get a good look in XYZ.

 Booths at the New York Stock Exchange, 1928

Photo Credit:  Library of Congress

booth agency id A system of letters and numbers used to identify each booth at the New York Stock Exchange. Each floor broker in the booth will have a BROKER BADGE NUMBER as well.

borrow Traders who have secured shares for the purpose of making delivery on a short sale are said to have gotten "the borrow."

borrowed stock Shares that have been secured for the purpose of making delivery on a short sale.

Boston Equities Exchange (BEX) A short lived automated trading platform developed by the Boston Stock Exchange. Closed in 2007.

Boston Stock Exchange A regional stock exchange founded in 1834 in Boston, Massachusetts. The third oldest exchange in the United States after the Philadelphia Stock Exchange and the New York Stock Exchange. Acquired by NASDAQ in 2007 and renamed the NASDAQ OMX BX.  Now known as the NASDAQ BX or more simply, BX.

Boston Stock Exchange, 1893

Photo Credit:  Wikimedia Commons

bot A written abbreviation of bought.

bottom The lowest price recorded during a specific time period. For example, ZVZZT, since I'm about ready to dump my position, the stock must be at its bottom.

bottom dropped out Describes a situation in which a stock declines so violently that the price appears to be going to zero. For example, What just happened to the market? One minute we're fine, and the next minute the bottom dropped out.

bottom fisher A slang term for a trader who buys a stock because he believes the price has reached its low point.

bottom out Describes the leveling of prices after a prolonged decline.

bottom price The lowest possible price.

bought Purchased, as in XYZ, you've bought a total of 25,000 at $50, working 15,000 additional with a $50.10 top.

bounce A sharp increase in prices that often follows a decline, as in ZVZZT, I just bought 5000 shares in my PA for a bounce.

bourse 1. The equivalent of stock exchange on the continent of Europe. Likely derived from 13th century Bruges, where tradition holds that merchant traders met informally in the home of a merchant named Van der Burse. In 1309, traders in Bruges established a more formal trading venue and called it the Bruges Bourse. 2. See NEW BOARD OF STOCK BROKERS.

Emmanual de Witte, The Amsterdam Bourse, 1653

boutique A broker/dealer that specializes in a specific market niche.

box 1. Trader's lingo for a quote machine in general or the NASDAQ Workstation in particular. See also IN THE BOX. 2. See SELL SHORT AGAINST THE BOX.

Boyd New York Stock Exchange folklore maintains that a floor broker named Boyd accidentally became the first specialist. Apparently, Boyd broke his leg in the early 1870s. Unable to effectively navigate the trading floor, Boyd pulled up a chair in the Western Union trading area and declared that he would exclusively trade Western Union. Realizing that Boyd would be well positioned to trade Western Union throughout the entire trading session, other floor brokers began to leave Boyd their Western Union orders so they could look for other trading opportunities. Thus, the specialist system was (allegedly) born.

bracketed buy order A combination order that consists of a market order to buy, a sell limit order above the purchase price, and a sell stop order below the purchase price. The execution of either sell order automatically cancels the other sell order.

bracketed sell order A combination order that consists of a market order to sell short, a buy limit order below the sale price, and a buy stop order above the sale price. The execution of either buy order automatically cancels the other buy order.

Brass A prominent computer platform owned by SunGard that provides broker/dealers with order management, trade execution, and compliance management capabilities.

breadth The percentage of the overall market that is participating in a particular price movement.

break 1. A sudden and sharp decline in price. Occasionally implies that the price had been kept high by artificial means in the first place. For example That was a heck of a break in XYZ. What happened? 2. An abbreviation of trade break. A discrepancy on the books of a broker/dealer. Usually involves a trade with another broker/dealer. For example, Joe, I've got a break in ZVZZT from yesterday. I know buying 10,000 shares from you at $25.10, but you're showing $25.15. 3. To cancel a trade.

break even The price at which a position has generated no profit and no loss, as in If I can just get back to break even in this trade, I will be happy.

break issue To trade below the offering price shortly after the initial public offering. For instance, Morgan doesn't look like they're going to stabilize ZVZZT at all. They already let it break issue.

break out To trade through a major support or resistance level, as in XYZ has been trading at the $50 level all day, but it looks like it may be ready to break out to new highs.

break price To raise the price of an away from the market buy limit order or lower the price of an away from the market sell limit order. For example, If ZVZZT continues to trade lower, I'm probably going to have to just break price and dump it.

bring out stock Trader's jargon meaning "offer stock to a potential buyer due to the possession of a natural sell order." For example, Right now, I can bring out 100,000 ZVZZT at $25.

bring stock in An attempt by a buyer of stock to create downward price pressure by abruptly cancelling a bid, quote, or buy limit order. The hope is that sellers believe buy interest has faded and therefore become more aggressive. This would allow the buyer to purchase shares at lower prices. For example, It looks like we may be the only real buyer out there ... let's try to bring it in a little.

broad market 1. A market in which large numbers of stocks are actively traded by numerous participants. 2. A relatively large cross section of stocks.

broad tape An expanded version of the stock ticker tape that includes not only price and quantity information but also other relevant information such as current news. Often installed in the board room of broker/dealers.

brocage An archaic term for brokerage.

broke 1. To be without funds, as in I'd hate to go broke hanging on to a dog like ZVZZT. 2. The past tense of break.

broken lot See ODD LOT.

broker 1. An individual or a firm that executes customer orders as an agent and charges a commission for the service. In contrast to a DEALER. 2. An abbreviation of stockbroker.

broker badge number A numbering system used to identify each floor broker at the New York Stock Exchange. Each broker's booth will have a BOOTH AGENCY ID as well.

broker comparison See COMPARISON.

broker/dealer A firm that trades securities for itself and for others. A broker/dealer may act as a principal or as an agent in a transaction.

broker/dealer house A relatively large broker/dealer.

brokerage 1. The execution of customer orders as agent. 2. The commission charged for transacting agency business.

brokerage firm/house A company that makes a business of providing brokerage services.

BSE An abbreviation for Boston Stock Exchange.

bubble Describes the price of an asset as it becomes inflated far beyond any reasonable measure of intrinsic value.

Speculative bubbles,1901

Photo Credit:  Library of Congress

buck 1. Industry slang for one million dollars. 2. General slang for one dollar.

buck the trend Trade contrary to the prevailing market direction, as in Look at XYZ buck the trend and move higher even with the Dow going to zero.

bucket shop 1. Historically, a gambling establishment where customers could bet on the movement of stock quotations rather than trade the actual stocks. 2. A brokerage firm engaged in the practice of BUCKETING.

bucketeer Another term for bucket shop.

bucketing An illegal broker practice of executing a customer order from a proprietary account (or not at all) while telling the customer that the order was executed as agent.

Buffalo Stock Exchange A regional stock exchange located in Buffalo, New York. Closed in 1936.

build a book 1. Gather together several relatively small orders or indications of interest in order to show a single large bid or offer to a natural customer. For example, ZVZZT, we're in touch with a large buyer. This is the kind of guy who won't fall down, so let's see if we can build a book and show him some size. 2. Create, build, and maintain a list of regular customers.

build a position Establish a long or short position over a period of time.

bulge Industry slang for a sudden but small and temporary rise in price.

bull A trader who believes in and/or works to secure higher prices. For example, I'm a huge bull. With all of the hedge funds behind their benchmark, this market is definitely headed even higher.

Photo Credit:  Collection of the New-York Historical Society

bull campaign A systematic and sustained effort by a group of market operators to advance stock prices.

bull clique An informal group of market operators who work together to secure higher prices.

bull market 1. A sustained period of generally increasing prices. For example, This bull market is getting stretched a little thin. I might start to lighten up a little over the next few days. 2. A slang (and sometimes sarcastic) term for any ostentatious display, especially during a bear market. For example, Wow Jim, nice new Ferrari. That's a heck of a bull market purchase.

bull of stocks Historically, a London term equivalent to long of stocks.

bull pool A POOL formally organized by a group of market operators who believe in and/or work to secure higher prices.

bull ring A slang term for the circular or elliptical railings on the floor of an exchange. Most commonly applied to commodities exchange floors.

bull tack A speculator who is long of stocks is said to have "taken the bull tack." Also known as the long tack.

bulled up Another term for bullish, as in Your analyst seems really bulled up on XYZ.

bulletin board See OTC BULLETIN BOARD.

bullets The portion of a (not held) order that is deliberately left unexecuted. Usually done in anticipation of more favorable prices later in the trading session. For example, It looks like XYZ wants to come in. Let's save some bullets for the close. See also DRY POWDER.

bullies Trader's lingo for stocks that trade on the OTC Bulletin Board.

bulling the market Working to advance prices.

bullish The belief that a particular stock, sector, or the market as a whole will rise. For example, I'm definitely bullish heading into the end of the quarter. I think there's going to be a lot of window dressing this time around.

bunching orders Combining several orders for simultaneous execution. See also BATCHED TRADE.

bundle A slang term for a large profit, as in I'm hearing that Morgan made a bundle on their ZVZZT short.

business day Any day that the securities markets are open.

bust 1. A slang term for a rapid contraction of business activity accompanied by a downturn in share prices. 2. Cancel an execution.

bust a trade Cancel an execution.

Buttonwood Agreement A pact signed on May 17, 1792 by twenty four of New York's leading merchant traders that in effect created the first formalized institution of securities trading in New York. The name derives from the myth that the pact was signed under the sole buttonwood (sycamore) tree on Wall Street to survive the Revolutionary War. While traders did in fact conduct business under this tree (then located at 68 Wall Street), the pact was more likely signed in nearby Corre's Hotel. The New York Stock Exchange claims the Buttonwood Agreement as its founding charter.

 Photo credit:  Museum of American Finance

buy To purchase stock, as in If the market trades off much more, I may be able to buy some stock on the bargain counter.

buy a bounce Purchase shares near a major price support level in an attempt to profit from a reversal off the support level. For example, I know ZVZZT has been weak, but I'm looking to buy a bounce off the $25 level.

buy a bull Purchase stock in expectation of a rise in price. Term originated in London.

buy advices An archaic term for buy order CONFIRMATIONs.

buy at the close order An order to buy a specific quantity of stock at the official exchange closing price given a set of parameters, as in XYZ, buy 20,000 at the close. Also known as a buy on the close order. See also MARKET ON CLOSE ORDER and LIMIT ON CLOSE ORDER.

buy at the opening order An order to buy a specific quantity of stock at the official exchange opening price given a set of parameters, as in ZVZZT, buy 10,000 at the opening and then work an additional 50,000 over the day. Also known as a buy on the opening order. See also MARKET ON CLOSE ORDER and LIMIT ON CLOSE ORDER.

buy back 1. To buy stock in order to cover a short position. For instance, XYZ looks like it wants to move higher. Let's just buy back the stock and move on to the next trade. 2. To repurchase an asset. 3. See BUYBACK.

buy downtick order A dynamic buy limit order that must be executed either on a downtick or a zero minus tick. A relatively non-aggressive trading strategy. Also known as a buy minus order.

buy 'em back An instruction to buy to cover. For example, ZVZZT, I just shorted 10,000 to a fast guy. Let's try to buy 'em back in the machines best way.

buy in 1. Purchase stock in order to return shares that had been borrowed by a customer for a short position. 2. Purchase shares in the open market in order to replace shares that another broker/dealer failed to deliver.

buy limit order An order to purchase a specific amount of stock at the designated price or lower, as in XYZ, open buy 15,000 at $50.

buy minus order A dynamic buy limit order that must be executed either on a downtick or a zero minus tick. A relatively non-aggressive trading strategy. Also known as a buy downtick order.

buy on a scale Systematically place portions of a larger buy order at stated price intervals in order to average prices down. For example, ZVZZT, let's buy 50,000 on a dime scale from the $25.50 level. See also SCALE IN.

buy on close order A MARKET ON CLOSE ORDER to buy or a LIMIT ON CLOSE ORDER to buy.

buy on open order A MARKET ON OPEN ORDER to buy or a LIMIT ON OPEN ORDER to buy.

buy on the close order An order to buy a specific quantity of stock at the official exchange closing price given a set of parameters, as in XYZ, buy 10,000 on the close. Also known as a buy at the close order. See also MARKET ON CLOSE ORDER and LIMIT ON CLOSE ORDER.

buy on the opening order An order to buy a specific quantity of stock at the official exchange opening price given a set of parameters, as in ZVZZT, buy 10,000 on the opening and then work an additional 50,000 over the day. Also known as a buy at the opening order. See also MARKET ON OPEN ORDER and LIMIT ON OPEN ORDER.

buy on the rumor, sell on the news A practical application of the theory that stocks should actually be sold when a company announces good news because the smart money has already purchased shares in anticipation of the news. Therefore, any further buy interest must be coming from amateur traders and will soon be exhausted.

buy on weakness Purchase shares during a price decline in anticipation of a reversal.

buy order An order to purchase a specific amount of stock given a set of parameters, as in Buy 35,000 ZVZZT best way.

buy order imbalance 1. Describes a situation in which buy orders so outweigh sell orders that achieving a clearing price becomes difficult. May result in a temporary trading halt. 2. The positive difference between the amount of stock bid for and offered for the opening auction/cross or the closing auction/cross on an exchange.

buy outright To pay for a purchase of shares in full.

buy side Industry jargon for the institutional investing community.

buy side trader  A trader employed by an institutional investor.

buy stop limit order An order to purchase a specific amount of stock if and only if the market price of the stock rises to the stop price stipulated on the order. Once the price is touched, the buy stop order becomes a buy limit order. For example, XYZ, buy 15,000 at $50.50 stop limit.

buy stop order An order to purchase a specific amount of stock if and only if the market price of the stock rises to the stop price stipulated on the order. Once the price is touched, the buy stop order becomes a market order. For example, XYZ, open buy 10,000 at $51 stop.

buy the book An instruction to SWEEP all of the stock posted at the best offer. "Book" refers to the specialist's book, where limit orders were historically held. For example, XYZ, it looks like 10,000 shares are offered at a quarter. I'd buy the book.

buy the dips Purchase shares during a price decline in anticipation of a reversal.

buy to cover Purchase shares in order to close out a short position. For example, ZVZZT, buy to cover 15,000 with a $25.25 top. That will leave me short 25,000.

buyback A corporate repurchase of a portion of its own outstanding shares. Repurchased shares become treasury stock. A major source of market support starting in 2009.  For example, ZVZZT, Morgan has been sitting on the bid all day. It looks like they've got the buyback today.

buyer One who purchases stock or has an interest in purchasing stock, as in ZVZZT, I'm a buyer down at the $24.90 level.

buyer's market A market in which the supply of stock for sale exceeds the demand for stock, resulting in softer prices. For example, If this pile on continues in XYZ, it's really going to become a buyer's market.

buyers on balance Specialist's lingo used to indicate that there are more shares to buy on the floor than there are shares for sale at a particular point in time, generally for the market opening or for the market close. For example, XYZ, paired on 200,000, 75,000 to buy.

buying climax The point at which a wave of indiscriminate buying becomes exhausted, leading to a reversal. Often signals the end of a prolonged bull market.

buying on margin Using borrowed funds to partially finance a purchase of shares. The purchased shares are used as collateral for the loan.

buying outright Paying for purchased shares entirely in cash.

by Refers to the ask size. A full quote is stated as "bid price at asked price, bid size by ask size." For example, ZVZZT is $25.20 @ $0.30, 50,000 by 20,000.

by appointment Describes a stock with a very low average daily volume. Such a stock is said to "trade by appointment."

BYX Exchange See BATS EXCHANGE.

BZX Exchange See BATS EXCHANGE.