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Optionetics Trading Education Center
Kaffirs
A term used in Great Britain referring to South African
gold mining shares. Shares are traded over the counter in
the United States in the form of American Depository Receipts,
which are claims to share certificates deposited in a foreign
bank. Kaffirs must pay out almost all their earnings to shareholders
as dividends according to South African law. Investors have
a gold investment to hedge against inflation and get a high
dividend payment. Kaffir investors should consider the risks
of investing in South Africa and the risk of fluctuations
in the price of gold.
Kagi Chart
Like Candlestick and Renko charts, Kagi lines charts
come from Japan and were made popular in the USA by Steve
Nison. Kagi charts display a series of connecting vertical
lines where the thickness and direction of the lines are dependent
on the price action. If closing prices continue to move in
the direction of the prior vertical Kagi line, then that line
is extended. However, if the closing price reverses by a pre-determined
"reversal" amount, a new Kagi line is drawn in the
next column in the opposite direction. An interesting aspect
of the Kagi chart is that when closing prices penetrate the
prior column's high or low, the thickness of the Kagi line
changes.
Kangaroos
A nickname for Australian stocks. A reference to the
animal most closely associated with Australia, used in this
context, this term usually refers to stocks in the All Ordinaries
Index
Kansas City Board of Trade (KCBT)
A futures exchange trading No. 2 red wheat futures
and options; Mini Value Line futures and options; and Value
Line Index futures. Hours: 8:30 am. to 3:15 p.m. Monday through
Friday.
Karat
A unit of fineness for gold jewelry. Twenty-four karat
is equal to 100% pure gold; 18 karat contains 75% pure gold;
and 10K gold contains 41% pure gold.
Keogh Plan
A qualified tax-deferred retirement plan for persons
who are self-employed and unincorporated or who earn extra
income through personal services aside from their regular
employment.
Key Industry
An industry of primary importance to a nation's economy.
The automotive industry is considered key because so many
jobs are directly or indirectly dependent upon it. The mining
industry is a key industry because it is crucial to maintaining
a county's exports.
Key-person Insurance
A special insurance policy on the lives of principal
active shareholders in a corporation. Key-person policies
can be used to fund buy-sell agreements as well as provide
funds to continue the company in the event of one manager's
death. There may be important tax implications when key-person
insurance is taken out.
Keynesian Economics
The theory that active government intervention in
the marketplace is the best method of ensuring economic growth
and stability.
Kickback (Finance)
A practice in which sales finance companies reward,
with cash, dealers who discount installment purchase paper
through them.
Kickback (Illegal)
An illegal practice whereby a seller makes payments
secretly to someone instrumental in awarding him or her a
government or private contract.
Kicker
A feature added to a debt obligation designed to enhance
marketability by offering the potential of equity participation
to the purchaser. For instance, a kicker allowing a bondholder
to convert the bond to stock if shares reach a specified price
would mean that the bondholder could potentially get an equity
security in addition to interest payments on the bond. Rights
and warrants are also types of kickers or sweeteners.
Killer Bees
Refers to those who help a target company fend off
a takeover bid. Killer bees are usually investment bankers
who devise strategies to make the target less and attractive
and more difficult to acquire.
Kiting (Banking)
The practice of depositing and drawing checks on two
or more bank accounts thus taking advantage of the float,
which is the time it takes the bank of deposit to collect
from the paying bank. Another type is to commit fraud by altering
the figures on a check.
Kiting (Securities)
The practice of a seller and buying working together
to manipulate stock prices to high levels by the creation
of artificial trading activity using the same funds.
Knock-out Option
A practice that gives the buyer a right, but not an
obligation, to purchase an underlying commodity, currency
or other position at a preset price. Knockout options are
cheaper to purchase than regular options that allows buyers
to take positions with less money than regular options-a practice
frequently used by hedge funds and other speculators.
Know Your Customer
An ethical concept that brokers should have reasonable
grounds to believe the investment recommended is appropriate
for the customer.
Kondratieff Cycle
The theory that economies of the Western capitalist
world were prone to major up-and-down super cycles lasting
fifty to sixty years. Also known as the Kondratieff wave,
this theory was developed by Soviet economist Nikolai Kondratieff
in the 1920s and has some adherents today although it is controversial
amongst economists.
Kruggerand
A gold bullion coin minted by the Republic of South
Africa. Kruggerands come in quarter-ounce, half-ounce and
one-ounce sizes and usually sell for slightly more than the
current value of their gold content. Other gold coins traded
include the United States Eagle, Canadian Maple Leaf, Mexican
Peso, Australian Kangaroo and the Austrian Philharmonic.
KST
Indicator developed by Martin Pring. A weighted summed
rate of change oscillator. Four different rates of change
are calculated, smoothed, multiplied by weights and then summed
to form one indicator.
Kuala Lumper Stock Exchange
Formerly affiliated with Singapore as the Stock Exchange
of Malaysia, the Kuala Lumper Stock Exchange is the largest
securities exchange in Malaysia.
Kuala Lumpur Commodity Exchange
An exchange trading futures in crude palm kernel oil,
cocoa, tin, rubber and crude palm oil.
Kurtosis
Descriptive measure of how flat or pointed a distribution
is.
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