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Optionetics Trading Education Center
January Barometer
A market forecasting tool popularized in the United
States by The Stock Traders Almanac. Statistics obtained using
this tool indicate that the market has risen in years when
the Standard & Poor's Index of 500 stocks was up in January
and dropped in years when the index for that month was down.
Predictions have been accurate 88% of the time since 1950.
January Effect
An effect observed in the United States whereby stocks
have historically tended to rise markedly during the period
starting on the last day of December and ending on the fourth
trading day of January. This effect occurs due to year-end
selling to create tax losses, recognize capital gains, effect
portfolio window dressing or raise holiday cash. While such
selling depresses the stocks, it has nothing to do with their
fundamental worth and therefore bargain hunter investors quickly
buy in creating the January rally.
Jitney
The execution and clearing of orders by one member
of a stock exchange for the account of another member. For
example, investment dealer A is a small firm whose volume
of business is not sufficient to maintain a trader on the
exchange. Instead it gives its orders to investment dealer
B for execution and pays a reduced percentage of the normal
commission.
Job Lot
A unit of trading smaller than a full contract that
is allowed by some exchanges such as the Winnipeg Grain Exchange
and the Chicago Board of Trade.
Jobber
1. A London Stock Exchange term for market maker.
2. A wholesaler who buys in small lots from manufacturers,
importers and/or other wholesalers and sells to retailers.
Johannesburg Stock Exchange (JSE)
The only stock exchange in South Africa. Established
in 1886, the mining-related sector accounts for almost 41%
of market capitalization of all quoted companies. Trading
is by open outcry. The JSE uses a weekly computerized clearing
system for settlement between brokers and trades executed
in one week are settled the following week.
Joint Account
Just like the banks can do. You and someone else can
have your names on an investment account. It can be set up
in many ways, but they all mean that both people own the securities.
Joint Account Agreement
A form required to open a joint account with a bank
or brokerage firm. The agreement must be signed by all parties
to the account no matter what provisions are made about signatures
required to authorize transactions.
Joint and Survivor Annuity
An annuity that makes payment for the lifetime of
two or more beneficiaries. Payments continue to the survivor
annuitant when one of the annuitants dies. Often married partners
arrange for joint and survivor annuities.
Joint Life Annuity
An annuity naming an annuitant and a second person.
If the annuitant dies the second person continues to receive
payments for life. Joint life annuities provide lower payments
than straight life to each annuity beneficiary.
Joint Ownership
Equal ownership by two or more people with right of
survivorship if one of the group dies.
Joint Tenants with Right of Survivorship
A phrase used to describe an arrangement whereby when
two or more people have a joint account with a brokerage firm
or bank, the death of one of those persons causes ownership
of the account assets to pass to the remaining account holders.
While transfer of assets escapes probate, estate taxes may
be applicable depending upon the amount of assets transferred.
Joint Venture
The cooperation of two or more individuals or enterprises
in a specific business enterprise, rather than in a continuing
relationship as in a partnership.
Jointly and Severally (General)
A legal phrase used in definitions of liability to
mean that an obligation may be enforced against all obligators
jointly or against one of them separately.
Jointly and Severally (Securities)
A phrase used to refer to municipal bond underwriting
when the account is undivided and syndicate members are responsible
for the unsold bonds in proportion to their participation
in the syndicate.
Jonestown Defense
A form of shark repellent: a strategic move by a takeover
target company to make its stock less attractive to a potential
acquirer. Named after the mass suicide led by Jim Jones of
Jonestown Guyana in the early 1980s, this strategy appears
suicidal for the target company. It may consist of taking
on a huge amount of debt or selling off the company's crown
jewels in order to make the corporation look less attractive
to the potential acquirer.
Judgment
A legal decision by a court of law ordering someone
to pay a specific amount of money. This term may also apply
to condemnation awards by governments in payment for private
property taken for public use.
Junior Bond Issue
A corporate bond issue, the collateral for which has
been pledged as security for other more senior debt issues,
and therefore ranks behind these prior claims.
Junior Debt
One or more junior bond issues.
Junior Security
A security with lower priority claim on assets and
income than a senior security. A preferred stock is junior
to a debenture and a debenture is junior to a mortgage bond.
Common stock is junior to all corporate securities.
Juniors
Young companies in the initial stages of growth.
Junk Bond
Officially a bond with an investment rating of BB
or BA or lower. Company bonds that are rated as such are thought
to be higher credit risks so to get investment money they
have to offer a greater incentive. This term also is applied
to companies who have unproven track records and no credit
history.
Jury of Executive Opinion
A method of forecasting, also known as a Delphi forecast.
A panel of experts, such as financial executives, prepares
individual forecasts based on information provided to all
members of the panel. Each expert then reviews the reports
of the other experts, makes adjustments in their own report
if they think that is justified. It is expected that the resulting
composite forecast will be more accurate than the individual
forecasts.
Justified Price
Refers to the fair market price an informed buyer
will pay for an asset such as a bond, commodity, stock or
real estate.
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