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What is spread (bid-ask)? The bid-ask spread compares how much a buyer will pay to how much the seller will sell for. The asking price is what the...

What is probability distribution? Statistical analysis is a study that compiles and breaks down data gathered from a wide range of categories and c...

The Trust Indenture Act of 1939 is a set of laws designed to make financial dealings fairer for the average Joe.

What is the difference between a financial advisor and a financial planner? A financial advisor can be anyone who works in the financial industry a...

What is Payment in Kind/PIK? PIK is the technical term for barter payment. If you give your plumber a pair of tickets for an NFL game that are wort...

What is Arbitrage? Arbitrage is a trading strategy used to make risk-free money. The investor buys a security in one market and sells it in another...

What is the Bid-to-Cover Ratio? The Bid-to-Cover ratio compares the amount of bids made for Treasury securities to the amount that is actually sold...

What is Asymmetric Information? The idea of asymmetric information applies to basically all transactions. It exists in the financial world because...

What is a Dutch Auction? A Dutch Auction is either one where closed quantity and price bids are entered and the price is set at the highest price t...

What is an Auction Market? Auction markets are the common stock exchanges. They allow buyers and sellers to enter bids and offers; trades occur whe...

A liquid market is a market featuring high trading volumes, i.e. investors actually want to put their cash to work.