Glossary

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Gain
A profit on a securities transaction. A gain is realized when a bond, mutual fund, stock, futures contract or other financial instrument is sold for more than its purchase price. Instruments held for more than one-year are taxable at more favorable capital gains tax rates than those held for less than one-year. If held for less than one-year, the gain is taxed at regular income tax rates.

Gamma
The degree by which the delta changes with respect to changes in the underlying instrument's price.

Gamma Stocks
An obsolete classification of stocks traded on the London Stock Exchange. Gamma stocks ranked third behind alpha and beta stocks in capitalization and activity. Gamma stocks were less regulated and required just two market makers quoting indicative share prices.

Gann Square
The Gann Square is a mathematical system for finding support and resistance based upon a commodity or stock's extreme low or high price for a given period. Attainment of a particular price level in a square tells you the next probable price peak or valley of future movement. The probable price levels tend to be more reliable if they are extrapolated from Gann Square values along one of the major axes of the Gann Square. The Gann Square is generated from a central value, normally an all-time or cyclical high or low. If a low is used, the numbers are incremented by a constant amount to generate the Gann Square. If a high is used, the numbers are decremented during the square generation.

Gann's Square of 9
A trading tool that relates numbers, such as a stock price, to degrees on a circle.

Gap
A day in which the daily range is completely above or below the previous day's daily range.

Gap (Securities)
A securities industry term used to describe the price movement of a stock or commodity when one day's trading range for that stock or commodity does not overlap the next day's, causing a range or gap in which no trading has occurred. This usually happens because of some extraordinarily positive or negative news about the company or commodity.

Gap Opening
The opening price for a stock that is significantly higher or lower than the previous day's closing price. This can occur if the company is subject to a takeover bid after the market closed, or if the company reports disappointing earnings, or a takeover bid falls through.

General Mortgage Bond
A bond which is secured by a blanket mortgage on the company's property, but which is usually subordinated to one or more other mortgage bonds.

Generally Accepted Accounting Practices (GAAP)
The conventions, rules and procedures that define accepted accounting practice including broad guidelines as well as detailed procedures. The basic doctrine was set forth by the Accounting Principles Board of the American Institute of Certified Public Accountants, which was superseded in 1973 by the Financial Accounting Standards Board (FASB) an independent self-regulatory organization.

Genetic Algorithms
Algorithms that mimic the characteristics associated with evolution and that are well suited to optimization problems such as optimizing neural network parameters.

Genetic Programming
In artificial intelligence, this form of programming automatically generates a program from a set of primitive constructs.

Give-up
When a broker executes an order for another broker's client and the two brokers split the commission; the client pays nothing extra.

Godfather Offer
A takeover offer so generous that the takeover target company's management is unable to refuse it for fear of shareholders' lawsuits.

Going Ahead
Refers to an unethical brokerage activity whereby the broker trades first for his or her own account before filling the customer's order(s).

Going Long
Refers to purchasing a stock, bond or commodity for investment or speculation. This type of security purchase is called a long position.

Going Short
Refers to selling a security that is not owned, thereby creating a short position.

Going-Concern Value
The value of a company as an operating business to another company or individual. The excess of going-concern value over asset value, or liquidating value is the value of the operating organization as distinct from the value of its assets. Going-concern value is treated as an intangible asset termed goodwill in acquisition accounting. Because intangible assets have no independent market or liquidation value, accepted accounting practices require goodwill to be written off over a period of time.

Golden Mean or Golden Ratio
The ratio of any two consecutive numbers in the Fibonacci sequence, known as phi and equal to 0.618; a proportion that is an important phenomenon in music, art, architecture and biology.

Golden Parachute
A form of shark repellent: a strategic move by a takeover target company to make its stock less attractive to a potential acquirer. The golden parachute strategy is to have contracts with top executives that make it prohibitively expensive to get rid of existing managers.

Golden Section
Any length divided so that the ratio of the smaller to the larger part is equivalent to the ratio between the larger part and the whole and is always 0.618.

Go Long
To buy securities, options or futures with the intent to profit from a rise in the price of the asset.

Good Delivery
A security that is in proper form to transfer title (i.e., endorsed by the registered owner). To settle a sale, the certificate must be surrendered "on good delivery" by the seller.

Goodbye Kiss
Payment of a premium to a raider trying to takeover a company in an attempt to eliminate the threat of being taken over. This strategy is also known as greenmail. A raider accepting the payment [also known as a Bon-Voyage Bonus] agrees not to buy any more shares or pursue the takeover any further for a specified number of years.

Good Til' Canceled Order (GTC)
Sometimes simply called "GTC," it means an order to buy or sell stock that is good until you cancel it. Brokerages usually set a limit of 30-60 days, at which the GTC expires if not restated.

Goodwill
Goodwill is an intangible asset of a company. The buyer of a business is often willing to pay for the "good name" of the business in addition to the value of its assets. Goodwill appears on the balance sheet as the excess of the amount paid for the shares over net assets.

Go Short
To sell securities, options or futures with the intent to profit from a rise in the price of the asset.

Government Security
A debt obligation of the U.S. government, backed by its full faith, credit and taxing power, and regarded as having no risk of default. The government issues short-term Treasury bills, medium-term Treasury notes and long-term Treasury bonds.

Gray Knight
A term used to describe an acquiring company that outbids a white knight. Since the acquiring company is not unfriendly, management of the target company considers it better that the white knight be outbid by a gray knight than that the white knight be outbid by a hostile company or raider.

Greenmail
Payment of a premium to a raider trying to takeover a company in an attempt to eliminate the threat of being taken over. This strategy is also known as a good-bye kiss. A raider accepting the payment [also known as a Bon-Voyage Bonus] agrees not to buy any more shares or pursue the takeover any further for a specified number of years.

Gross Domestic Product (GDP)
The total value of goods and services produced in a country during one year. It includes consumption, government purchases, investments, and exports minus imports.

Growth Fund
A diversified common stock fund that has capital appreciation as its primary goal. It invests in companies that reinvest most of their earnings for expansion, research or development.

Growth Rates
Compound annual growth rate for the number of full fiscal years shown. If there is a negative or zero value for the first or last year, the growth is NM (not meaningful).

Growth Stock
Usually a non-dividend paying common stock of a company with expansion potential. The corporate funds that would normally be paid to shareholders as dividends are put back into the company to pay for expansion. Growth stocks have the potential for capital gains rather than income.

Growth/Income
An investment can make money from growth, which occurs when the investment is worth more when you sell it than when you bought it, or income from such sources as interest on bonds or dividends on stocks.

Guaranteed Investment Certificates
Certificates issued by financial institutions giving evidence of a deposit made with it for a fixed maturity, in registered form and on an interest-bearing basis. The interest rate is higher than the best rate for a premium savings account. Sold by bank, trust and insurance companies as an investment that guarantees a specific rate or return over a specific time frame. Very similar to a bond in its function. A deposit instrument most commonly available from trust companies or banks requiring a minimum investment at a predetermined rate of interest for a stated term, i.e., one year, five years, etc. Generally non-redeemable and non-transferable prior to maturity, but there can be exceptions.

Guts
A strangle where the call and the put are in-the-money.

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