Blue Sky Laws  State security laws applying to the sale of new issues.
Designed for the express purpose of protecting the public.

Churning  Excessive trading of a stock within an account by an author-
ized individual that has control over the account. This practice is illegal.

Collateral  Securities or other assets that are pledged by a borrower to
guarantee the repayment of a loan.

Certificate  A document proving ownership of a security.

Commission  The broker's fee for buying or selling a security.

Common Stock  The securities having last claim to the assets of a
corporation. Most common shares have voting rights, and many pay a
dividend.

Day Order  A buy or sell order that is valid only for a single trading day.

Dividend  A payment made by the company to the stockholder. This is
usually money derived from corporate profits.

Dollar Cost Averaging  Buying securities at regular intervals and at
fixed amounts.

Diversification  Spreading your capital among many different types of
investments for the express purpose of reducing risk.

Dealer  When a brokerage house is acting as a principal in a trade.

Debenture  A bond backed solely by the general credit of a company.

Discretionary Accounts  An account in which a stockbroker has the
written permission of the client to make trades in the account.

Equity  The ownership value of a security held in the brokerage name.

Earnings Per Share  The amount of net income earned for each share
of common stock after payment of dividends to preferred stockholders.