Stock Market Terms You Should Know

Account executive. The title given by some brokerage firms to their stockbrokers. Other variations on the title include registered representative, financial counselor and financial consultant.
Accrued interest. Interest that is due but hasn't yet been paid. It most often comes into play when you buy bonds in the secondary market. Bonds usually pay interest every six months, but it is earned (accrued) by bondholders every month. If you bu y a bond halfway between interest payment dates, you must pay the seller for the three months' interest accrued but not yet received. You get the money back three months later when you receive the interest payment for the entire six-month period.
Adjusted Gross Income (AGI). This is your income from all taxable sources minus certain adjustments. The adjustments--sometimes called "above-the-line deductions" because you can claim them whether or not you itemize--include deductible contributions to regular individual retirement accounts, medical savings accounts and Keogh plans, any penalty paid on early withdrawal of savings, the deductible for 50% of the self-employment tax paid by self-employed taxpayers, alimony payments and job-related moving expenses.
Alpha. A mathematical measure of price volatility that attempts to isolate the price movements of a stock from those of the market. A stock with a high alpha is expected to perform well regardless of what happens to the market as a whole. (See also beta.)
American depositary receipt. Certificates traded on U.S. stock exchanges or over the counter, representing ownership of a specific number of shares of a foreign stock.
Annuity. A series of regular payments, usually from an insurance company, guaranteed to continue for a specific time, usually the annuitant's lifetime, in exchange for a single payment or a series of payments to the company. With a deferred annuity , payments begin sometime in the future. With an immediate annuity, payments begin right away. A fixed annuity pays a fixed income stream for the life of the contract. With a variable annuity, the payments may change according to the relative investment s uccess of the insurance company.
Arbitrage. An attempt to profit from momentary price differences that can develop when a security or commodity is traded on two different exchanges. To take advantage of such differences, an arbitrageur would buy in the market where the price is lo wer and simultaneously sell in the market where the price is higher.
Asset allocation. The process of dividing investment funds among the different categories of assets, such as cash equivalents, stocks and bonds.
At-the-market. When you buy or sell a security "at-the-market," the broker will execute your trade at the next available price.