W

Fifth letter of a Nasdaq stock symbol indicating that this particular stock is a warrant.

WACC

See: Weighted average cost of capital

WEBS

See: World Equity Benchmark Series

WI

See: When issued

WST

Western Samoa Tala currency

Wage assignment

A loan agreement provision allowing the lender to deduct payments from an employee's wages in case of default.

Wage-push inflation

Inflation caused by skyrocketing wages.

Waiting period

Time during which the Securities and Exchange Commission (SEC) studies a firm's registration statement. During this time the firm may distribute a preliminary prospectus.

Waiver of premium

A provision in an insurance policy that allows payment of insurance premiums to be permanently or temporarily stopped in the event the policyholder becomes incapacitated.

Walk away

To take and maintain a position in a stock after going to the floor to consummate a trade. Antithesis of trade me out, buy them back.

Wall Street

Generic term for the securities industry firms that buy, sell, and underwrite securities.

Wall Street analyst

Related: Sell-side analyst

Wallflower

Stock that has fallen out of favor with investors; stock that tends to have a low P/E (price-to-earnings ratio).

Wallpaper

A security with no monetary value.

Wanted for cash

A statement displayed on market tickers indicating that a bidder will pay cash for same-day settlement of a block of a specified security.

War babies

Slang term for the stocks and bonds of corporations in the defense industry.

War chest

Cash kept aside for a takeover or for defense against a takeover bid.

Warehouse receipt

Evidence that a firm owns goods stored in a warehouse.

Warehousing

The interim holding period from the time of the closing of a loan to its subsequent marketing to capital market investors.

Warrant

A security entitling the holder to buy a proportionate amount of stock at some specified future date at a specified price, usually one higher than current market price. Warrants are traded as securities whose price reflects the value of the underlying stock. Corporations often bundle warrants with another class of security to enhance the marketability of the other class. Warrants are like call options, but with much longer time spans-sometimes years. And, warrants are offered by corporations, while exchange-traded call options are not issued by firms.

Warranty

A guarantee by a seller to a buyer that if a product requires repair or remedy of a problem within a certain period after its purchase, the seller will repair the problem at no cost to the buyer.

Wash

Gains equal losses.

Wash sale

Purchase and sale of a security either simultaneously or within a short period of time, often in order to recognize a tax loss without altering one's position. See: Tax selling.

Wasting asset

An asset that has a limited life and thus decreases in value (depreciates) over time. Also applies to consumed assets, such as oil or gas, and termed "depletion."

Watch list

A list of securities selected for special surveillance by a brokerage, exchange, or regulatory organization; firms on the list are often takeover targets, companies planning to issue new securities, or stocks showing unusual activity.

Watered stock

A stock representing ownership in a corporation that is worth less than the actual invested capital, resulting in problems of low liquidity, inadequate return on investment, and low market value.

Weak dollar

A depreciated dollar with respect to other currencies, meaning that more dollars are needed to buy a unit of foreign currency. Antithesis of strong dollar.

Weak-form efficiency

A pricing theory that the price of a security reflects the past price and trading history of the security. Theory implies that security prices follow a random walk. Related: Semistrong-form efficiency, strong-form efficiency.

Weak market

A market with few buyers and many sellers and a declining trend in prices.

Wedge

A chart pattern composed of two converging lines connecting peaks and troughs. In the case of falling wedges, the pattern indicates temporary interruptions of upward price rallies. In the case of rising wedges, indicates interruptions of a falling price trend.

Weekend effect

The common recurrent low or negative average return from Friday to Monday in the stock market.

Weighted average cost of capital (WACC)

Expected return on a portfolio of all a firm's securities. Used as a hurdle rate for capital investment. Often the weighted average of the cost of equity and the cost of debt The weights are determined by the relative proportions of equity and debt in a firm's capital structure.

Weighted average Coupon

The weighted average of the gross interest rates of mortgages underlying a pool as of the pool issue date; the balance of each mortgage is used as the weighting factor.

Weighted average life

See: Average life

Weighted average maturity

The weighted average maturity of an MBS is the weighted average of the remaining terms to maturity of the mortgages underlying the collateral pool at the date issue, using as the weighting factor the balance of each of the mortgages as of the issue date.

Weighted average portfolio yield

The weighted average of the yield of all the bonds in a portfolio.

Weighted average remaining maturity

The average remaining term of the mortgages underlying a MBS.

Well-diversified portfolio

A portfolio that includes a variety of securities so that the weight of any security is small. The risk of a well-diversified portfolio closely approximates the systematic risk of the overall market, and the unsystematic risk of each security has been diversified out of the portfolio.

When distributed

When issued.

When issued (W.I.)

Refers to a transaction made conditionally, because a security, although authorized, has not yet been issued. Treasury securities, new issues of stocks and bonds, stocks that have split, and in-merger situations after the time the proxy has become effective but before completion are all traded on a when-issued basis. With ice.

Whipsawed

Buying stocks just before prices fall and selling stocks just before prices rise in a volatile market, often as the result of misleading signals.

Whisper number or forecast

An unofficial earnings estimate of a company given to clients by a security analyst if there is more optimism or pessimism about earnings than shown in the published number. These are often found on the Internet.

Whisper stock

A stock rumored to be the target of a takeover bid, drawing speculators who hope to make a profit after the takeover is completed.

Whistle blower

A person who has knowledge of fraudulent activities inside a firm or government agency, who is protected from the employer's retribution by federal law.

White knight

A friendly potential acquirer sought out by a target firm that is threatened by a less welcome suitor.

White Noise

The audio equivalent of Brownian motion. Sounds that are unrelated and sound like a hiss. The video equivalent of white noise is "snow" in television reception.

White sheets

Lists of prices published by the National Quotation Bureau for Market Makers.

White-shoe firm

Broker-dealer firms that disdain practices such as hostile takeovers.

White squire

White knight who buys less than a majority interest.

White's rating

A rating of municipal securities, that uses market factors rather than credit considerations to find appropriate yields.

Whitemail

Sale of a large amount of stock by a company that is the target of a takeover bid to a friendly party at below-market prices, so that the raider is forced to buy more of highly priced shares to accomplish the takeover.

Whole life insurance

A contract with both insurance and investment components: (1) It pays off a stated amount upon the death of the insured, and (2) it accumulates a cash value that the policyholder can redeem or borrow against.

Whole loan

A term that distinguishes an investment representing an original mortgage loan from a loan representing a participation with one or more lenders.

Wholesale mortgage banking

The purchasing of loans originated by others, for the acquisition of the servicing rights.

Wholesaler

An underwriter or a broker-dealer who trades with other broker-dealers, rather than with the retail investor.

Wholly owned subsidiary

A subsidiary whose parent company owns virtually 100% of its common stock.

Whoops

A nickname for the Washington Public Power Supply System, which in the 1970s raised billions of dollars through municipal bond offerings, the projects that never materialized. WPPSS defaulted on the payments to bondholders.

Wi WI

Come from when issued. Treasury bills trade on a WI basis between the day they are auctioned and the day settlement is made. Bills traded before they are auctioned are said to be traded WI WI

Wide opening

Abnormally wide spread between the bid and asked prices of a security at the opening of a trading session.

Widow-and-orphan stock

A stock paying high dividends with a low beta and noncyclical business, that is an extremely safe investment.

Wild card option

The right of the seller of a Treasury bond futures contract to give notice of intent to deliver at or before 8:00 p.m. Chicago time after the closing of the exchange (3:15 p.m. Chicago time) when the futures settlement price has been fixed. Related: Timing option.

Williams Act

Federal legislation enacted in 1968 (and now constituting Rules 13d and 14d of the Security Exchange Act of 1934) that imposes requirements with respect to public tender offers.

Wilshire indexes

Widely followed performance measurement indexes measuring performance of all U.S.-headquartered equity securities with readily available price data, created by Wilshire Associates, Inc.

Windfall profit

A sudden unexpected profit uncontrolled by the profiting party.

Window

A brokerage firm's cashier department, where delivery of securities and settlement of transactions take place.

Window contract

A guaranteed investment contract purchased with deposits over some future designated time period (the "window"), usually between 3 and 12 months. All deposits made are guaranteed the same credit rating. Related: Bullet contract.

Window dressing

Trading activity near the end of a quarter or fiscal year that is designed to improve the appearance of a portfolio to be presented to clients or shareholders. For example, a portfolio manager may sell losing positions so as to display only positions that have gained in value.

Winnipeg Commodity Exchange

Canada's only agricultural futures and options exchange, located in Manitoba.

Winner's curse

Problem faced by uninformed bidders. For example, in an initial public offering uninformed participants are likely to receive larger allotments of issues that informed participants know are overpriced.

Wire house

A firm operating a private wire to its own branch offices or to other firms, commission houses, or brokerage houses.

Wire room

A department within a brokerage firm that receives customers' orders and transmits the orders to the exchange floor or the firm's trading department.

With dividend

Purchase of shares that entitle the buyer to the forthcoming dividend. Related: Ex-dividend.

With ice

When issued.

With rights

Shares sold accompanied by entitlement the buyer to buy additional shares in the company's rights issue.

Withdrawal plan

Agreement that a mutual fund will disburse automatic periodic redemptions to the investor.

Withholding

Used in the context of securities, the illegal practice of a public offering participant keeping some shares in a private account or with a family member, employee, or dealer to profit from the higher market price of a hot issue.

Used in the context of taxes, the withholding by an employer of a certain amount of an employee's income in order to cover the employee's tax liability. Also used to refer to the withholding by corporations and financial institutions of a flat 10% of interest and dividend payments due to security holders.

Withholding tax

A tax levied by a country of source on income paid, usually on dividends remitted to the home country of the firm operating in a foreign country.

Without

Indicates a one-way market if 70 were bid in the market and there was no offer, the quote would be "70 bid without.".

Without recourse

Giving the lender no right to seek payment or seize assets in the event of nonpayment from anyone other than the party specified in the debt contract (such as a special-purpose entity).

Woody

Slang to describe a market moving strongly upward, as in, "This market has a woody."

Working

Attempting to complete the remaining part of a trade, by finding either buyers or sellers for the rest.

Working away

Transacting with another broker/dealer.

Working capital

Defined as the difference between current assets and current liabilities (excluding short-term debt). Current assets may or may not include cash and cash equivalents, depending on the company.

Working capital management

The deployment of current assets and current liabilities so as to maximize short-term liquidity.

Working capital ratio

Working capital expressed as a percentage of sales.

Working control

Control of a corporation by a shareholder or shareholders having less than 51% voting interest because of the wide dispersion of share ownership.

Working order

Standing order in the marketplace, through which a broker bids or offers to fill the order in a series of lots at opportune times in hopes of obtaining the best price.

Workout

Informal repayment or loan forgiveness arrangement between a borrower and creditors.

Workout market

Market indicating prices at which it is believed a security can be bought or sold within a reasonable length of time.

Workout period

Realignment of a temporarily misaligned yield relationship that sometimes occurs in fixed income markets.

World Bank

A multilateral development finance agency created by the 1944 Bretton Woods, (New Hampshire) negotiations. It makes loans to developing countries for social overhead capital projects that are guaranteed by the recipient country. See: International Bank for Reconstruction and Development.

World Equity Benchmark Series (WEBS)

The World Equity Benchmark Series are similar to SPDRs. WEBS trade on the AMEX, and track the Morgan Stanley Capital International (MSCI) country indexes. WEBS are available for: Australia, Austria, Belgium, Canada, France, Germany, Hong Kong, Italy, Japan, Malaysia Free, Mexico, the Netherlands, Singapore, Spain, Sweden, Switzerland, and the United Kingdom.

World investible wealth

The part of world wealth that is traded and is therefore accessible to investors.

World Trade Organization (WTO)

A multilateral agency that administers world trade agreements, fosters trade relations among nations, and solves trade disputes among member countries.

Wrap account

An investment consulting relationship for management of a client's funds by one or more money managers, that bills all fees and commissions in one comprehensive fee charged quarterly.

Wraparound annuity

An investment that allows the annuitant the choice of underlying investments tax-deferred.

Wraparound mortgage

A second mortgage that leaves the original mortgage in force. The wraparound mortgage is held by the lending institution as security for the total mortgage debt. The borrower makes payments on both loans to the wraparound lender, which in turn makes payments on the original senior mortgage.

Wrinkle

A feature of a new product or security intended to entice a buyer.

Write

Sell an option. Applies to derivative products.

Write-down

Reducing the book value of an asset if its is overstated compared to current market values.

Write-off

Charging an asset amount to expense or loss, such as through the use of depreciation and amortization of assets.

Write out

The procedure used when a specialist makes a trade involving his own inventory, on one hand, and a floor broker's order, on the other. The broker must first complete the trade with the specialist, who then transacts a separate trade with the customer.

Writer

The seller of an option, usually an individual, bank, or company that issues the option and consequently has the obligation to sell the asset (if a call) or to buy the asset (if a put) on which the option is written if the option buyer exercises the option.

Writing cash-secured puts

An option strategy to avoid using a margin account. Instead of depositing margin with a broker, a put writer can deposit a cash balance equal to the option exercise price, and can avoid additional margin calls.

Writing naked

See: Naked option

Writing puts to acquire stock

Selling a put option at an exercise price that would represent a good investment by an option writer who believes a stock's value will fall, so that the writer cannot lose. If the stock price unexpectedly goes up, the option will not be exercised and the writer is at least ahead the amount of the premium received. If the stock loses value, as expected, the option will be exercised, and the writer has the stock at what he had earlier decided was originally a good buy, and he has the premium income in addition.

Written-down value

The book value of an asset after allowing for depreciation and amortization.

W-type bottom

A double bottom pattern in a price history that looks like the letter W. See: Technical analysis.

Copyright © 2002, Campbell R. Harvey. All Worldwide Rights Reserved. Do not reproduce without explicit permission.