TED spread

Similar financial terms

Weighted average life
For amortizing securities, investors do not talk in terms of a bond’s maturity since its principal is made over time. This is because the stated maturity of such securities only identifies when the final principal payment will be made.

Adjusted R-Squared
A goodness-of-fit measure in multiple regression analysis that penalizes additional explanatory variables by using a degrees of freedom adjustment in estimating the error variance.

Inverted Market
A market where futures prices decrease with maturity.

Performance Related Pay
Performance Related pay is a remuneration system whereby the employee's pay is based on his or her performance. It is basically a payments by results system that is designed to give incentive to the employee to work harder or more productively. In its simplest form, this may be an annual bonus based on subjective assessment of performance. In many larger organisations this can be more structured, based on a set of pre-agreed objectives or targets. Performance related pay is becoming increasingly ...

PLC (Public Limited Company)
Under UK law there must be a minimum of seven shareholders in a PLC. There is no maximum number of shareholders allowed. Shares in PLCs can be bought or sold on the Stock Market by the general public. By implication, most big companies choose this route to growth as it provides access to large amounts of capital that can be used for investment, expansion and acquisition. Although technically owned by the shareholders, its management determines the affairs of the company. The US equivalents are I ...

Diluted earnings per share
A calculation of earnings per share. Add conversion value or preferred stock and convertible bonds to net profit, then divide the result by the number of outstanding shares of common stock that would exist after full conversion; the result is expressed as a dollar value per share.

Accelerated cost recovery system (ACRS)
Schedule of depreciation rates allowed for tax purposes.

Accelerated depreciation
Any depreciation method that produces larger deductions for depreciation in the early years of a project's life. Accelerated cost recovery system (ACRS), which is a depreciation schedule allowed for tax purposes, is one such example.

Accumulated Benefit Obligation (ABO)
An approximate measure of the liability of a plan in the event of a termination at the date the calculation is performed. Related: projected benefit obligation.

Adjusted present value (APV)
The net present value analysis of an asset if financed solely by equity (present value of un-levered cash flows), plus the present value of any financing decisions (levered cash flows). In other words, the various tax shields provided by the deductibility of interest and the benefits of other investment tax credits are calculated separately. This analysis is often used for highly leveraged transactions such as a leverage buy-out.

Weighted average portfolio yield
The weighted average of the yield of all the bonds in a portfolio.

Weighted average remaining maturity
The average remaining term of the mortgages underlying a MBS.

Weighted average maturity
The Weighted average maturity (WAM) of a MBS is the weighted average of the remaining terms to maturity of the mortgages underlying the collateral pool at the date of issue, using as the weighting factor the balance of each of the mortgages as of the issue date.

Weighted average coupon
The weighted average of the gross interest rate of the mortgages underlying the pool as of the pool issue date, with the balance of each mortgage used as the weighting factor.

Weighted average cost of capital
The weighted average cost of capital (WACC) is the expected return on a portfolio of all the firm's securities when debt, equity and tax shields are taken into account. Used as a hurdle rate for capital investment.

Wanted for cash
A statement displayed on market tickers signaling that a bidder will pay cash for same day settlement of a block of a specified security.

Variable rated demand bond
Variable rated demand bond (VRDB) is a floating rate bond that can be sold back periodically to the issuer.

Unlimited liability
Full liability for the debt and other obligations of a legal entity. Generally, partners of a partnership and sole propietors have unlimited liability.

Tilted portfolio
An indexing strategy that is linked to active management through the emphasis of a particular industry sector, selected performance factors such as earnings momentum, dividend yield, P/E ratio, or selected economic factors such as interest rates and inflation.

Targeted repurchase
The firm buys back its own stock from a potential bidder, usually at a substantial premium, to forestall a takeover attempt.

Subordinated debt
Debt over which senior debt takes priority. In the event of bankruptcy, subordinated debtholders receive payment only after senior debt claims are paid in full.

Subordinated debenture bond
An unsecured bond that ranks after secured debt, after debenture bonds, and often after some general creditors in its claim on assets and earnings. Related: Debenture bond, mortgage bond, collateral trust bonds.

Stated maturity
For the CMO tranche, the date the last payment would occur at zero CPR.

Stated conversion price
At the time of issuance of a convertible security, the price the issuer effectively grants the security holder to purchase the common stock, equal to the par value of the convertible security divided by the conversion ratio.

Stated annual interest rate
The interest rate expressed as a per annum percentage, by which interest payment is determined.

Risk-adjusted return
Return earned on an asset normalized for the amount of risk associated with that asset.

Risk-adjusted profitability
A probability used to determine a "sure" expected value (sometimes called a certainty equivalent) that would be equivalent to the actual risky expected value.

Reported factor
The pool factor as reported by the bond buyer for a given amortization period.

Projected maturity date
With CMOs, final payment at the end of the estimated cash flow window.

Projected benefit obligation (PBO)
A measure of a pension plan's liability at the calculation date assuming that the plan is ongoing and will not terminate in the foreseeable future.

Private unrequited transfers
Refers to resident immigrant workers' remittances to their country of origin as well as gifts, dowries, inheritances, prizes, charitable contributions, etc.

Perfected first lien
A first lien that is duly recorded with the cognizant governmental body so that the lender will be able to act on it should the borrower default.

Option-adjusted spread (OAS)
(a) The spread over an issuer's spot rate curve, developed as a measure of the yield spread that can be used to convert dollar differences between theoretical value and market price. (b) The cost of the implied call embedded in a MBS, defined as additional basis-yield spread. When added to the base yield spread of an MBS without an operative call produces the option-adjusted spread.

Official unrequited transfers
Include a variety of subsidies, military aid, voluntary cancellation of debt, contributions to international organizations, indemnities imposed under peace treaties, technical assistance, taxes, fines, etc.

Nonmarketed claims
Claims that cannot be easily bought and sold in the financial markets, such as those of the government and litigants in lawsuits.

Net adjusted present value
The adjusted present value minus the initial cost of an investment.

Negotiated sale
Situation in which the terms of an offering are determined by negotiation between the issuer and the underwriter rather than through competitive bidding by underwriting groups.

Negotiated offering
An offering of securities for which the terms, including underwriters' compensation, have been negotiated between the issuer and the underwriters.

Negotiated markets
Markets in which each transaction is separately negotiated between buyer and seller (i.e. an investor and a dealer).

Negotiated certificate of deposit
A large-denomination CD, generally $1MM or more, that can be sold but cannot be cashed in before maturity.

Neglected firm effect
The tendency of firms that are neglected by security analysts to outperform firms that are the subject of considerable attention.

Master limited partnership (MLP)
A publicly traded limited partnership.

Marketed claims
Claims that can be bought and sold in financial markets, such as those of stockholders and bondholders.

Market value-weighted index
An index of a group of securities computed by calculating a weighted average of the returns on each security in the index, with the weights proportional to outstanding market value.

Listed stocks
Stocks that are traded on an exchange.

Limited-tax general obligation bond
A general obligation bond that is limited as to revenue sources.

Limited-liability instrument
A security, such as a call option, in which the owner can only lose his initial investment.

Limited partnership
A partnership that includes one or more partners who have limited liability.

Limited partner
A partner who has limited legal liability for the obligations of the partnership.

Limited liability
Limitation of possible loss to what has already been invested.

Computer-Intergrated Manufacturing (CIM)
The intergration of computer control and monitoring into a manufacturing process.

Clearing House Automated Payments System (CHAPS)
A computerized clearing system for sterling funds that began operations in 1984. It includes 14 member banks, nearly 450 participating banks, and is one of the clearing companies within the structure of the Association for Payment Clearing Services (APACS).

Cost of limited partner capital
The discount rate that equates the after-tax inflows with outflows for capital raised from limited partners.

Risk-adjusted return on capital (RAROC)
Measures performance on a risk-adjusted basis. Calculated as the economic return divided by economic capital. RAROC helps determine if a company has the right balance between capital, returns and risk. The central concept in RAROC is economic capital: the amount of capital a company should put aside needed based on the risk it runs.

Inverted block rate
A cost structure for energy in which each additional block or unit of energy above a given level is charged at a higher rate than preceding blocks. Inverted block rates are most commonly applied to energy delivered to clients who require large portions of their energy during peak demand periods when energy costs are typically higher, or when additional system capacity has to be brought online to meet that client's needs.

Limited Company
A domestic business company with limited liabilities.

Limited Liability Company (LLC)
Consists of member owners and a manager, at a minimum. Similar to a corporation that is taxed as a partnership or as an S-corporation. More specifically, it combines the more favorable characteristics of a corporation and a partnership. The LLC structure permits the complete pass-through of tax advantages and operational flexibility found in a partnership, operating in a corporate-style structure, with limited liability as provided by the state's laws.

Limited liability partnership (LLP)
A form of the LLC favored and used for professional associations, such as accountants and attorneys.

Limited liability limited partnership (LLLP)
Intended to protect the general partners from liability. Previously, the general partner was a corporation to protect the principals from personal liability. Under the LLLP, an individual could be a general partner and have limited personal liability.

Adjusted basis
The cost of property after adjustment for certain deductions or additions as permitted or prescribed by the U.S. tax laws. In some instances, the basis of property is derived from the basis of other parties - such as a donor or an estate.

Marketed Deal
An arrangement in a public share distribution whereby the price at which the shares are sold is determined after a period of marketing activities. During the marketing period, the underwriters are able to contact potential purchasers to assess potential demand and price sensitivity. Shares continue to be publicly traded, if they had been previously listed. The underwriters minimize the price risk on resale (thereby lowering the discount to market), but the seller bears a risk of a price decline ...

Segregated Funds
These funds guarantee that, regardless how the fund performs, at least a minimum percentage (usually 75 per cent or more) of the investor's payments into the fund will be returned when the fund matures.

Ted Spread
The difference between the price of the three-month U.S. Treasury bill futures contract and the price of the three-month Eurodollar time deposit futures contract with the same expiration month.

Certificated or Certified Stocks
Stocks of a commodity that have been inspected and found to be of a quality deliverable against futures contracts, stored at the delivery points designated as regular or acceptable for delivery by a commodity exchange. In grain, called "stocks in deliverable position".

Admitted Assets
Assets admitted by state law to be included in an insurance company's annual statement. These assets are an important item when regulators measure insurance company solvency. They may include mortgages, stocks, bonds and real estate.

Spread
A spread is either (a) the gap between bid and ask prices of a stock or other security, (b) The simultaneous purchase and sale of separate futures or options contracts for the same commodity for delivery in different months (also known as a straddle), (c) the difference between the price at which an underwriter buys an issue from a firm and the price at which the underwriter sells it to the public or (b) the price an issuer pays above a benchmark fixed-income yield to borrow money.

Spread transaction
A position in two or more options of the same type.

Spread option
AN option where the payoff depends on the difference between two market variables.

Horizontal spread
The simultaneous purchase and sale of two options that differ only in their expiration dates.

Yield spread strategies
Strategies that involve positioning a portfolio to capitalize on expected changes inyield spreads between sectors of the bond market.

Vertical spread
Simultaneous purchase and sale of two options that differ only in their exercise price.

Spreadsheet
A computer program that organizes numerical data into rows and columns on a terminal screen, for calculating and making adjustments based on new data.

Spread strategy
Spreading is a strategy that involves a position in one or more options so that the cost of buying an option is funded entirely or in part by selling another option in the same underlying.

Spread income
Also called margin income, the difference between income and cost. For a depository institution, the difference between the assets it invests in (loans and securities) and the cost of its funds (deposits and other sources).

Relative yield spread
The ratio of the yield spread to the yield level.

Quality spread
Also called credit spread, the spread between Treasury securities and non-Treasury securities that are identical in all respects except for quality rating. For instance, the difference between yields on Treasuries and those on single A-rated industrial bonds.

Maturity spread
The spread between any two maturity sectors of the bond market.

Bid-asked spread
The difference between the bid and asked prices.

Bull spread
A spread strategy in which an investor buys an out-of-the-money put option, financing it by selling an out-of-the money call option on the same underlying.

Calendar spread
Applies to derivative products. A strategy in which there is a simultaneous purchase and sale of options of the same class at the same strike prices, but with different expiration date.

Crush Spread
In the soybean futures market, the simultaneous purchase of soybean futures and the sale of soybean meal and soybean oil futures to establish a processing margin.