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Trading Terms Starting With W

  • Waiting period

    see Cooling off period.
  • Wall Street

    a street in the heart of the financial district in lower Manhattan and home of the New York Stock Exchange, the former American Stock Exchange, the New York Federal Reserve Bank and numerous brokerage firms and investment banks. Not only do the words "Wall Street" now refer to its surrounding neighborhood, they have become synonymous with the American financial industry's influence worldwide.
  • Warrant

    similar to a listed call option, it is a security issued by a company (not a clearing corporation) that gives the owner the right to buy shares of its stock. It specifies a price at which the stock may be bought, which is usually out-of-the-money when it is issued. Its lifetime is usually several years, but it may also have no expiration. These securities are issued either alone, in connection with another security to make it more attractive to investors, or as part of a merger, takeover or other recapitalization agreement. It may trade in a secondary market like stock.
  • Wash sale / wash sale rule

    this occurs when selling a security at a loss, then shortly thereafter repurchasing it. The motivation for this might be to realize a loss claimed as a tax deduction, then to reestablish the original long security position in hope of future profits. The IRS has a rule, known as the "30-day wash sale rule" that prohibits a taxpayer from claiming a loss on the sale of an investment if that same investment is repurchased within 30 days before or after the sale date.
  • Wasting asset

    an asset that decreases in value over time because it has a limited life. An option is a wasting asset because its time value wastes, or decays, with the passage of time. At expiration an option will be worth only intrinsic value, if it has any; it will have no time value remaining.
  • Weighted average

    an average, or mean, of a set of values calculated by assigning a weight to each value, multiplying each value by its weight, adding the results then dividing by the sum of the weights. Each value will have its own importance relative to the result. Also termed Weighted mean.
  • When issued

    refers to a security that has been authorized but not yet issued. Trading of such a security, between the date it is announced and the date of issue, is on an "if" basis, meaning the trade will be settled if and when the new security is actually issued. Some treasury securities, stocks that have been split, new issues of stocks and bonds, and stock in a new company formed after a merger are examples of securities that might trade "when issued."
  • Whisper number

    before a company officially announces an earnings result, this is a rumored earnings amount, or one shared between an analyst and customers, that may differ from the forecast estimate expected in the marketplace.
  • Wide market

    a relatively large spread between disseminated bid and ask prices.
  • Wilshire 5000 Total Market Index

    the broadest of all equity indexes, it is a capitalization-weighted index that represents all stocks actively traded in the U.S. equity markets.
  • Window dressing

    with respect to funds, a deceptive practice just before the fund's portfolio is made public that involves the sale of losing positions and purchase of well-performing stocks in order to improve the portfolio's overall appearance. This typically occurs at the quarter or year end.
  • Wire house

    a brokerage firm (or bank) with multiple branches that are linked by a private telecommunications network for sharing important market information as well as client-related data.
  • Working capital

    a measure of liquid assets a company currently has to conduct business (cover maturing short-term debt as well as operational costs). Calculated as: current assets - current liabilities.
  • Write

    to sell a call or put option contract that is not already owned. This is known as an opening sale transaction and results in a short position in that option. An equity option writer assumes the obligation to sell (for a call) or buy (for a put) shares of underlying stock if assigned. The writer of an index option is obligated to deliver cash if assigned.
  • Writer

    an investor who sells a call or put contract that is not already owned, via an opening sale transaction (sell to open). The result is either the creation of or an increase in an existing short position in that particular option.