Glossary of Accounting, Financial & Investing Information - U, V, W, X, Y & Z
Uncovered call optionSee covered vs. uncovered (naked) call.
Uncovered put optionSee covered vs. uncovered (naked) put.
The distribution of shares or debt of a government or company to investors.
Shares of a corporation which give the shareholder a right to vote on matters pertaining to the corporation. A corporation may have voting and non-voting stock.
The right to purchase shares from the issuing entity, at a set price, usually for a specified period of time.
A wash trade is the activity of buying and selling the same investment in a short period of time (usually on the same day), with no change in beneficial ownership. Wash trades are illegal when they are done to artificially inflate the trading volume or market value of a stock.
When an investor purchases shares in certain mutual funds on more than one occasion, the weighted average cost can be used as the cost basis when calculated gain or loss on sale. Weighted average cost per share is calculated as the total cost of all the shares divided by the total number of shares purchased.
Example: Investor A purchased shares of Mutual Fund A on three different occasions:
Total cost = $7,587, divided by total shares (400) = weighted average cost of $18.9675/share.
If the investor subsequently sells 100 shares, then the cost basis allocated to the sold shares (for tax purposes) would be $18.9675 x 100, = $1,896.75. The cost basis of the remaining 300 shares would be $7,587 - $1,896.75 = $5,690.25.
Except for certain mutual fund shares, the average price per share cannot be used to calculate gains or losses on the sale of stock.
Also called current ratio, this is the current assets divided by the current liabilities.
This is a percentage which reflects the annual return on an investment. See dividend yield.
Revised: October 31, 2020
Copyright © 2008 Boat Harbour Holdings Ltd. See Reproduction of information on USTaxTips.net
The information on this site is not intended to be a
substitute for professional advice. Each person's situation differs, and
a professional advisor can assist you in using the information on this web
site to your best advantage.