L
	Fifth letter of a Nasdaq stock symbol specifying that the issue is a class of stock such as third preferred class of warrants, foreign preferred, sixth class of preferred stock, or preferred when issued stock.
LBO
	See: Leveraged buyout
LDC
	See: Less developed countries
LEAPS
	See: Long-Term Anticipation Securities
LIBOR
	See: London Interbank Offered Rate
LIFFE
	See: London International Financial Futures Exchange
LIFO
	See: Last in, first out
LOC
	See: Letter of credit
LTV
	See: Loan-to-value ratio
LYON
	See: Liquid yield option note
Ladder strategy
	A bond portfolio construction strategy that invests approximately equal amounts in every maturity within a given range.
Lady Macbeth Strategy
	Strategy in which a third party poses as a white knight in a takeover bid, and then joins forces with an unfriendly bidder.
Laffer curve
	A curve conjecturing that economic output will increase if marginal tax rates are cut. Named after economist Arthur Laffer.
Lag
	Payment of a financial obligation later than is expected or required, as in lead and lag. Also, the number of periods that an independent variable in a regression model is "held back" in order to predict the dependent variable.
Lag response of prepayments
	A delay of typically about three months between the time the weighted-average coupon of an MBS pool crosses the threshold for refinancing and observation of an acceleration in prepayment speed is observed.
Lagging indicators
	Economic indicators that follow rather than precede the country's overall pace of economic activity. See also: Leading indicators and coincident indicators.
Laisse-faire
	Doctrine that a government should not interfere with business and economic affairs.
Lambda
	The ratio of a change in the option price to a small change in the option volatility. It is the partial derivative of the option price with respect to the option volatility.
Land contract
	A method of real estate financing; a mortgage-holding seller finances a buyer by taking a down payment and subsequent payments in installments, but holds the title until the mortgage is fully repaid.
Landlord
	A property owner who rents property to a tenant.
Lapsed option
	An option that no longer has any value because it has reached its expiration date without being exercised.
Large-cap
	A stock with a high level of capitalization, usually at least $5 billion market value.
Lagging indicators
	Economic indicators that follow rather than precede the country's overall pace of economic activity. See also: Leading indicators and coincident indicators.
Last in, first out
	?
Last sale
	The most recent trade performed in a security.
Last split
	After a stock split, the number of shares distributed for each share held and the date of the distribution.
Last trading day
	The final day under an exchange's rules during which trading may take place in a particular futures or options contract. Contracts outstanding at the end of the last trading day must be settled by delivery of underlying physical commodities or financial instruments, or by agreement for monetary settlement, depending futures contract specifications.
Late charge
	A fee a credit grantor charges a borrower for a late payment.
Late tape
	A delay in the display of price changes on the tape of an exchange because of heavy trading. In severe instances the first digit of each price is intentionally deleted.
Launder
	To move illegally acquired cash through financial systems so that it appears to be legally acquired.
Law of large numbers
	The mean of a random sample approaches the mean (expected value) of the population as sample size increases.
Law of one price
	An economic rule stating that a given security must have the same price no matter how the security is created. If the payoff of a security can be synthetically created by a package of other securities, the implication is that the price of the package and the price of the security whose payoff it replicates must be equal. If it is unequal, an arbitrage opportunity would present itself.
Lay off
	In the context of general equities, this eliminates all or part of a position by finding customers or other dealers to take the position.
Layup
	Used in the context of general equities. Easily executed trade or order. See: Lead pipe.
Lead
	Payment of a financial obligation earlier than is expected or required.
Lead manager
	The commercial or investment bank with the primary responsibility for organizing syndicated bank credit or bond issued. The lead manager recruits additional lending or underwriting banks, negotiates terms of the issue with the issuer, and assesses market conditions.
Lead pipe
	Used in the context of general equities. Virtually certain that trade will take place; lead pipe cinch. See: Layup.
Lead regulator
	A leading self-regulatory organization that over sees compliance with a particular section of the law, such as the NYSE, ASE, or NASDAQ.
Lead underwriter
	The head of a syndicate of financial firms that are sponsoring an initial public offering of securities or a secondary offering of securities. Could also apply to bond issues.
Leader
	A stock or group of stocks that is the first to move in a market upsurge or downturn.
Leading economic indicators
	Economic series that tend to rise or fall in advance of the rest of the economy.
Leading the market
	In the context of general equities, this is a stock or group of stocks moving with the market as a whole, but moving in advance of the general market.
Leakage
	Release of information selectively or not before official public announcement.
Lease
	A long-term rental agreement, and a form of secured long-term debt.
Lease acquisition cost
	The legal fees and other expenses incurred when acquiring a lease.
Leasehold
	An asset providing the right to use property under a lease agreement.
Leasehold improvement
	An improvement made to leased property.
Lease-purchase agreement
	An agreement that allows for portions of lease payments to be used to purchase the leased property.
Lease rate
	The payment per period stated in a lease contract.
Leaseback
	A transaction that involves the sale of some property, and an agreement by the seller to lease the property back from the buyer after the sale.
Leaves
	Used in the context of general equities. Remains to buy or sell of a previously entered order after a report of partial execution has been given. If the floor broker to buy 20M IBM at $115, and he then buys 6M at this price, his report would be, "You bought 6M IBM at $115; leaves 14."
Ledger cash
	A firm's cash balance as reported in its financial statements. Also called book cash.
Leg
	A prolonged trend in stock market prices, such as a multiple-period bull market; or, an option that is one side of a spread transaction. See: Lifting a leg.
Leg up
	Used in the context of general equities. (1)Have a portion of the offsetting side of a trade in your pocket (spoken for) so your capital risk in the transaction is reduced. (Purchase of 10,000 of a 50,000 buy order leaves the trader a "leg up".) (2) Complete one side of a two-sided transaction, as in a swap or contingency order.
LEGAL
	A computerized database maintained by the NYSE to keep track of enforcement actions, audits, and complaints against member firms. This term is not an acronym but is referred to in capitals.
Legal capital
	Value at which a company's shares are recorded in its books.
Legal bankruptcy
	A legal proceeding for liquidating or reorganizing a business.
Legal defeasance
	The deposit of cash and permitted securities, as specified in the bond indenture, into an irrevocable trust sufficient to enable the issuer to fully discharge its obligations under the bond indenture.
Legal entity
	A person or organization that can legally enter into a contract, and may therefore be sued for failure to comply with the terms of the contract.
Legal investments
	Investments that a regulated entity is permitted to make under the rules and regulations that govern its conduct.
Legal list
	A list of high-quality debt and equity securities chosen by a state agency that are acceptable holdings for fiduciary institutions.
Legal monopoly
	A government-regulated firm that is legally entitled to be the only company offering a particular service in a particular area.
Legal opinion
	A statement, usually written by a specialized law firm, required for a new municipal bond issue stating that the issue is legally acceptable.
Legal transfer
	A stock transaction that requires special documentation in addition to standard stock or bond power to be legally valid.
Legislative risk
	The risk that new or changed legislation will have a large positive or negative effect on an investment.
Legitimate
	Used in the context of general equities. Real interest in trading as compared to a profile stance. See: Natural.
Lemon
	An investment with poor results.
Lend
	To provide money temporarily on the condition that it or its equivalent will be returned, often with an interest fee.
Lender
	Businesses that provide loans to others.
Lender of last resort
	Traditionally the Federal Reserve Bank in the U.S., which assists banks that face large withdrawals of funds and in so doing stabilizes the banking system.
Lending agreement
	A contract regarding funds transferred between a lender and a borrower.
Lending at a premium
	A loan from one broker to another of securities to cover a customer's short position, with a borrowing fee included. A fee is unusual since securities are normally lent freely between brokers.
Lending at a rate
	Interest paid to a customer on the credit balance received from a short sale.
Lending securities
	Securities borrowed from a broker's inventory, from another customer's margin account, or from another broker, when a customer is required to deliver on a short sale.
Less-developed countries (LDCs)
	Also known as emerging markets. Countries who's per capita GDP is below a World Bank-determined level.
Lessee
	An entity that leases an asset from another entity.
Lessor
	An entity that leases an asset to another entity.
Letter of comment
	A communication to the firm from the SEC that suggests changes to its registration statement.
Letter of credit (LOC)
	A form of guarantee of payment issued by a bank on behalf of a borrower that assures the payment of interest and repayment of principal on bond issues.
Letter of intent
	An assurance by a mutual fund shareholder that a certain amount of money will be invested monthly, in exchange for lower sales charges. In mergers, a preliminary merger agreement between companies after significant negotiations.
Letter stock
	Privately placed common stock, so-called because the SEC requires a letter from the purchaser stating that the stock is not intended for resale.
Level
	Used in the context of general equities. Price measure of an indication.
Level-coupon bond
	Bond with a stream of coupon payments that remain the same throughout the life of the bond.
Level debt service
	A municipal charter provision that debt payments must be relatively equal from year to year so that required revenue projections are easier.
Level load
	A mutual fund that charges a permanent sales charge, usually at some fixed percentage. See: Front-end loads and back-end loads.
Level pay
	Scheduling principal and interest payments (P&I) due under a mortgage so that total monthly payment of P&I is the same. different from the typical mortgage for which the principal payment component of the monthly payment becomes gradually greater while the monthly interest component shrinks.
Level term insurance
	A life insurance policy with a fixed face value and increasing premiums.
Leverage
	The use of debt financing, or property of rising or falling at a proportionally greater amount than comparable investments. For example, an option is said to have high leverage compared to the underlying stock because a given price change in the stock may result in a greater increase or decrease in the value of the option.
Leverage clientele
	A group of shareholders who, because of their personal leverage, seek to invest in corporations that maintain a compatible degree of corporate leverage.
Leverage ratios
	Measures of the relative value of stockholders, capitalization, and creditors obligations, and of the firm's ability to pay financing charges. Value of firm's debt to the total value of the firm (debt plus stockholder capitalization).
Leverage rebalancing
	Making transactions to adjust (rebalance) a firm's leverage ratio to a target ratio.
Leveraged beta
	The beta of a leveraged required return; that is, the beta as adjusted for the degree of leverage in the firm's capital structure.
Leveraged buyout (LBO)
	A transaction used to take a public corporation private that is financed through debt such as bank loans and bonds. Because of the large amount of debt relative to equity in the new corporation, the bonds are typically rated below investment-grade, properly referred to as high-yield bonds or junk bonds. Investors can participate in an L.B.O. through either the purchase of the debt (i.e., purchase of the bonds or participation in the bank loan) or the purchase of equity through an L.B.O. fund that specializes in such investments.
Leveraged company
	A company that has debt in its capital structure.
Leveraged equity
	Stock in a firm that relies on financial leverage. Holders of leveraged equity experience the benefits and costs of using debt.
Leveraged investment company
	An investment company or mutual fund entitled to borrow capital for its operations. Also, an investment company that issues both income shares and capital shares.
Leveraged lease
	A lease arrangement under which the lessor borrows a large proportion of the funds needed to purchase the asset. The lender has a lien on the assets and a pledge of the lease payments to secure the borrowing.
Leveraged portfolio
	A portfolio that includes risky assets purchased with funds borrowed.
Leveraged recapitalization
	Often used in risk arbitrage. A public company takes on significant additional debt with the purpose of either paying an extraordinary dividend or repurchasing shares, leaving the public shareholders with a continuing interest in a more financially leveraged company. Popular form of shark repellent See: Stub.
Leveraged required return
	The required return on an investment when the investment is financed partially by debt.
Leveraged stock
	Stocks financed with credit, such as that purchased on a margin account.
Liability
	A financial obligation, or the cash outlay that must be made at a specific time to satisfy the contractual terms of such an obligation.
Liability funding strategies
	Investment strategies that select assets so that cash flows will equal or exceed the client's obligations.
Liability insurance
	Insurance guarding against damage or loss that the policyholder, may cause another person in the form of bodily injury or property damage.
Liability swap
	An interest rate swap used to alter the cash flow characteristics of an institution's liabilities so as to provide a better match with its assets.
Lien
	A security interest in one or more assets that lenders hold in exchange for secured debt financing.
Life annuity
	An annuity that pays a fixed amount for the lifetime of the annuitant.
Life cycle
	The lifetime of a product or business, from its creation to its demise or transformation.
Life expectancy
	The length of time that an average person is expected to live, which is used by insurance companies use to make projections of benefit payouts.
Life insurance
	An insurance policy that pays a monetary benefit to the insured person's survivors after death.
Life insurance in force
	The dollar amount of life insurance that a company has issued, measured as the sum of policy face values and dividends paid.
Life insurance policy
	The contract that sets out the terms of life insurance coverage.
Lifetime reverse mortgage
	A type of mortgage in which a homeowner borrows against the value a home, while retaining title, and making no payments while residing in the home. When the owner ceases living in the house, the property is sold, and the loan repaid.
Lift
	An increase in securities prices, as shown by some economic indicator.
Lifted
	Refers to over-the-counter trading. Having an offer taken in a stock, followed by the market maker raising the offer price.
Lifting a leg
	Closing out one side of a long-short arbitrage before the other is closed.
Lighten up
	Selling some part of a stock or bond position in a portfolio to realize capital gains or to losses or increase cash assets.
Limit on close order
	An order to buy or sell stock at the closing price only if the price is at a predetermined level or better.
Limit order
	An order to buy a stock at or below a specified price, or to sell a stock at or above a specified price. For instance, you could tell a broker "buy me 100 shares of XYZ Corp at $8 or less" or "sell 100 shares of XYZ at $10 or better" The customer specifies a price, and the order can be executed only if the market reaches or betters that price. A conditional trading order designed to avoid the danger of adverse unexpected price changes.
Limit order book
	A record of unexecuted limit orders maintained by the specialist. These orders are treated equally with other orders in terms of priority of execution.
Limit order information system
	The electronic system supplying information about securities traded on participating exchanges so that the best securities prices can be found.
Limit price
	See: Maximum price fluctuation
Limit up, limit down
	The maximum price change allowed for a commodity futures contract per trading day.
Limitation on asset dispositions
	A bond covenant that restricts in some way a firm's ability to sell major assets.
Limitation on conversion
	Applies mainly to convertible securities. Possible delay in convertibility. More frequently, the right to convert may be terminable prior to a redemption date, preventing the holder from receiving a final coupon or dividend. See: Accrued interest.
Limitation on liens
	A bond covenant that restricts in some way a firm's ability to grant liens on its assets.
Limitation on merger, consolidation, or sale
	A bond covenant that restricts in some way a firm's ability to merge or consolidate with another firm.
Limitation on sale-and-leaseback
	A bond covenant that restricts in some way a firm's ability to enter into sale-and-leaseback transactions, financing techniques that could affect creditor thinness..
Limitation on subsidiary borrowing
	A bond covenant that restricts in some way a firm's ability to borrow at the level of firm subsidiary.
Limited company
	A form of business commonly used in the U.K. comparable to incorporation in the U.S.
Limited discretion
	Permission by a client that allows a broker to make certain stock and option trades without first consulting the client about the trade.
Limited liability
	Limitation of loss to what has already been invested.
Limited-liability instrument
	A security, such as a call option, in which the owner can lose only the initial investment.
Limited partner
	A partner who has limited legal liability for the obligations of the partnership.
Limited partnership
	A partnership that includes one or more partners who have limited liability.
Limited payment policy
	Life insurance providing full life protection but requiring premiums for only part of the customer's lifetime.
Limited risk
	The risk inherent in options contracts, which is much lower than that of a futures contract, which has unlimited risk. The maximum loss in buying a call option, for example, is the premium paid for the option.
Limited price order
	Used in the context of general equities. See: Limit order.
Limited-tax general obligation bond
	A general obligation bond of a government backed by specified or constrained revenue sources.
Limited warranty
	A warranty with certain conditions and limitations on the parts covered, type of damage covered, and/or time period for which the agreement is good.
Line of credit
	An informal loan arrangement between a bank and a customer allowing the customer to borrow up to a prespecified amount.
Linear programming
	Technique for finding the maximum value of some equation, subject to stated linear constraints.
Linear regression
	A statistical technique for fitting a straight line to a set of data points.
Lintner's observations
	John Lintner's work (1956) suggests that dividend policy is related both a target level, and to the speed of adjustment of change in dividends.
Lipper Mutual Fund Industry Average
	The average level of performance for all mutual funds, as reported by Lipper Analytical Services.
Liquid asset
	Asset that is easily and cheaply turned into cash-notably, cash itself and short-term securities.
Liquid yield option note (LYON)
	Zero-coupon, callable, putable, convertible bond developed by Merrill Lynch & Co.
Liquidating dividend
	Payment by a firm to its owners from capital rather than from earnings.
Liquidation
	Occurs when a firm's business is terminated. Assets are sold, proceeds are used to pay creditors, and any leftovers are distributed to shareholders. Any transaction that offsets or closes out a long or short position. Related: Buy in, evening up, offset liquidity.
Liquidation rights
	The rights of a firm's securityholders in the event the firm liquidates.
Liquidation value
	Net amount that could be realized by selling the assets of a firm after paying the debt.
Liquidator
	Person appointed by an unsecured creditor in the United Kingdom to oversee the sale of an insolvent firm's assets and the repayment of its debts.
Liquidity
	A high level of trading activity, allowing buying and selling with minimum price disturbance. Also, a market characterized by the ability to buy and sell with relative ease. Antithesis of illiquidity.
Liquidity diversification
	Investing in a variety of maturities to reduce the price risk to which holding long bonds exposes the investor.
Liquidity Fund
	A California company that buys real estate limited partnership interests at 25% to 35% lower than the current value of the real estate assets.
Liquidity preference hypothesis
	The argument that greater liquidity is valuable, all else equal. Also, the theory that the forward rate exceeds expected future interest rates.
Liquidity premium
	Forward rate minus expected future short-term interest rate.
Liquidity ratios
	Ratios that measure a firm's ability to meet its short-term financial obligations on time, such as the ratio of current assets to current liabilities.
Liquidity risk
	The risk that arises from the difficulty of selling an asset in a timely manner. It can be thought of as the difference between the "true value" of the asset and the likely price, less commissions.
Liquidity theory of the term structure
	A biased expectations theory that asserts that the implied forward rates will not be a pure estimate of the market's expectations of future interest rates because they embody a liquidity premium.
Lisbon Stock Exchange (LSE)
	Stock exchange trading stocks, bonds, and unit trusts. The BVL general index is the exchange's official index.
Listed firm
	A company whose stock trades on a stock exchange, and conforms to listing requirements.
Listed option
	An option that has been accepted for trading on an exchange.
Listed security
	Stock or bond that has been accepted for trading by one of the organized and registered securities exchanges in the United States. Generally, the advantages of being listed are that exchanges provide: (1) an orderly marketplace; (2) liquidity; (3) fair price determination; (4) accurate and continuous reporting on sales and quotations; (5) information on listed companies; and (6) strict regulation for the protection of securityholders. Antithesis of OTC Security.
Listed stocks
	Stocks that are traded on an exchange.
Listing
	In the context of real estate, written agreement between a property owner and a real estate broker that gives the broker permission to find a buyer or tenant for some property. See: Listing broker.
Listing broker In the context of equity, when a stock is traded in exchange it is said to be listed.
	A licensed real estate broker who completes a listing of a property for sale.
Listing requirements
	Requirements, including minimum shares outstanding, market value, and income, that are laid down by an exchange for any stock to be listed for trading.
Living benefits
	Life insurance benefits from which the insured can draw cash while still living, usually in the case of some high-cost illness.
Lloyds of London
	A marketplace in London for underwriting syndicates.
Load
	The sales fee charged to an investor when shares are purchased in a load fund or annuity. See: Bank-end load; front-end load; level load.
Load fund
	A mutual fund that sells shares with a sales charge-typically 4% to 8% of the net amount indicated. Some no-load funds also levy distribution fees permitted by Article 12b-1 of the Investment Company Act; these are typically 0. 25%. A true no-load fund has neither a sales charge nor
Load-to-load
	Arrangement whereby the customer pays for the last delivery when the next one is received.
Load spread option
	A method of allocating the annual sales charge on load funds, often through percentage deductions from a customer's periodic fixed payments.
Loan
	Temporary borrowing of a sum of money. If you borrow $1 million you have taken out a loan for $1 million.
Loan amortization schedule
	The timetable for repaying the interest and principal on a loan.
Loan commitment
	Assurance by a lender to make money available to a borrower on specific terms in return for a fee.
Loan crowd
	The group of member firms that lend or borrow securities needed to cover the positions of customers who have sold short securities.
Loaned flat
	Securities lent interest-free between brokers to cover customers' short sale positions.
Loan syndication
	Group of banks sharing a loan. See: Syndicate.
Loan value
	The maximum percentage of the value of securities that a broker can lend to a margin account customer, as dictated by the Federal Reserve Board in Regulation T.
Loan-to-value ratio (LTV)
	The ratio of money borrowed on a property to the property's fair market value.
Local
	A futures exchange member who trades securities for his or her own account.
Local expectations theory
	A form of the pure expectations theory that suggests that the returns on bonds of different maturities will be the same over a short-term investment horizon.
Local taxes
	Property, sewer, school, or other community paid to a locality. Local taxes are usually deductible for federal income tax purposes.
Lock
	Used in the context of general equities. Make a market both ways (bid and offer) either on the bid, offering, or an in-between price only. Locking on the offering occurs to attract a seller, since the trader is willing to pay (and ask) the offering side when others only ask it. Locking on the bid side attracts buyers for similar reasons. Typically, the sell side requires a plus tick to comply with short sale rules.
Lock in
	To ensure that an individual transacts all his or her business with a sole broker by providing superior services, such as accommodating block buy and sell needs or preparing excellent research (soft-dollar lock). This usually guarantees a certain volume of business.
Lock-out
	With PAC bond CMO classes, the period before the PAC sinking fund becomes effective. With multifamily loans, the period of time during which prepayment is prohibited.
Lock-up CDs
	CDs that are issued with the tacit understanding that the buyer will not trade the certificate. Quite often, the issuing bank will insist that it hold the certificate for safekeeping by it to ensure that the buyer holds the understanding.
Lock-up option
	Often used in risk arbitrage. Privilege offered a white knight (friendly acquirer) by a target company to buy crown jewels or additional equity. The aim is to discourage a hostile takeover. See: Shark repellent.
Lockbox
	A collection and processing service provided to firms by banks, which collect payments from a dedicated postal box to which the firm directs its customers to send payment to. The banks make several collections per day, process the payments immediately, and deposit the funds into the firm's bank account.
Locked in
	When an investor is unable to take advantage of preferential tax treatment because of time remaining on a required holding period. Also, a commodities position in which the market has a limit up or limit down day and investors are unable to move in to or out of the market.
Locked market
	A market is locked if the bid price equals the ask price. This can occur, for example, if the market is brokered and one side pays brokerage only, in over-the-counter trading the initiator of the transaction. Highly competitive market environment with inside bid and offering at the same price. Often occurs when an OTC dealer has not updated the market.
Log-linear least-squares method
	A statistical technique for fitting a curve to a set of data points. One of the variables is transformed by taking its logarithm, and then a straight line is fitted to the transformed set of data points.
Lognormal distribution
	Pattern of frequency of occurrence in which the logarithm of the variable follows a normal distribution. Lognormal distributions are used to describe returns calculated over periods of a year or more.
Lombard rate
	Applies mainly to international equities. Interest rate the German Bundesbank uses as an upper limit to the day-to-day money rate, since no bank will pay higher rates in the money market than it has to pay for very short-term recourse to Lombard credit.
London Commodity Exchange (LCE)
	Merged with the London International Financial Futures and Options Exchange in 1996.
London Interbank Offered Rate (LIBOR)
	The rate of interest that major international banks in London charge each other for borrowings. Many variable interest rates in the U.S. are based on spreads off LIBOR. By contrast with the bid rate LIBID quoted by banks seeking such deposits.
London International Financial Futures Exchange (LIFFE)
	A London exchange where Eurodollar futures as well as futures-style options are traded.
London Metal Exchange (LME)
	A market for trading base metals, where traded options contracts are available against the underlying futures contract.
London Stock Exchange (LSE)
	The U.K.'s six regional exchanges joined together in 1973 to form the stock exchange of Great Britain and Ireland, later named the LSE. The FTSE 100 index (known as the footsie) is its dominant index.
Long
	One who has bought a contract to establish a market position and who has not yet closed out this position through an offsetting sale; the opposite of short.
Long bonds
	Bonds with a long current maturity. The "long bond" is the 30-year U.S. Treasury bond.
Long coupons
	(1) Bonds or notes with a long current maturity. (2) A bond on which one of the coupon periods, usually the first, is longer than the other periods or the standard period.
Long hedge
	The purchase of a futures contract in anticipation of actual purchases in the cash market. Used by processors or exporters as protection against an advance in the cash price. Related: hedge, short hedge
Long leg
	The part of an option spread in which an agreement to buy the underlying security is made.
Long position
	Owning or holding options (i.e., the number of contracts bought exceeds the number of contracts sold). For equities, a long position occurs when an individual owns securities. An owner of 1,000 shares of stock is said to be "Long the stock." Related: Short position.
Long run
	A period of time in which all costs are variable; longer than one year.
Long straddle
	Taking a long position in both a put and a call option.
Long-term
	In accounting terms, one year or longer.
Long-term assets
	Value of property, equipment, and other capital assets minus the depreciation. This is an entry in the bookkeeping records of a company. It is usually established on a "cost" basis, and thus does not necessarily reflect the market value of the assets.
Long-term debt
	An obligation having a maturity of more than one year from the date it was issued. Also called funded debt.
Long-term debt/capitalization
	Indicator of financial leverage. Shows long-term debt as a proportion of the capital available. Determined by dividing long-term debt by the sum of long-term debt, preferred stock and common stockholder's equity.
Long-term debt-to-equity ratio
	A capitalization ratio comparing long-term debt to shareholders' equity.
Long-term debt ratio
	The ratio of long-term debt to total capitalization.
Long-Term Anticipation Securities (LEAPS)
	Long-term options.
Long-term financial plan
	Financial plan covering two or more years of future operations.
Long-term financing
	Liabilities repayable in more than one year plus equity.
Long-term gain
	A profit on the sale of a capital assets held longer than 12 months, and eligible for long-term capital gains tax treatment.
Long-term goals
	Financial goals expected to be accomplished in five years or longer.
Long-term investor
	A person who makes investments for a period of at least five years in order to finance his or her long-term goals.
Long-term liabilities
	Amount owed for leases, bond repayment, and other items due after 1 year.
Long-term loss
	A loss on the sale of a capital asset held less than 12 months that can be used to offset a capital gain.
Look
	Used for listed equity securities. See: Picture.
Look-thru
	A method for calculating U.S. taxes owed on income from controlled foreign corporations that was introduced by the Tax Reform Act of 1986.
Lookback option
	An option that allows the buyer to choose as the option strike price any price of the underlying asset that has occurred during the life of the option. For a call option, the buyer will choose the minimum price; for a put option, the buyer will choose the maximum price. This option will always be in the money.
Looking for
	In the context of general equities, this describing a buy interest in which a dealer is asked to offer stock, often involving a capital commitment. Antithesis of in touch with.
Loophole
	A technicality in some legislation or regulation that makes it possible to avoid certain consequences or circumvent a rule without breaking the law, such as in the use of a tax shelter.
Loose credit
	Policy by the Federal Reserve Board to make loans less expensive and more available by reducing interest rates through open market operations.
Loss
	The opposite of profit.
Loss-control activities
	Actions that an insured person or company takes at the instigation of an insurance company in order to prevent accidents or losses.
Loss-of-income insurance
	Insurance coverage that will pay out income that a policyholder loses as a result of a disability, injury, or business disruption.
Loss ratio
	The ratio of losses paid or accrued by an insurer to premiums collected over a year.
Lots
	In the context of general equities, this blocks or portions of trades. Can express a specific transaction in a stock at a certain time, often implying execution at the same price (e.g., "I traded 40m in two lots of 10 and four lots of 5.").
Low
	In the context of general equities, this is a specific minimum limit required by a seller in execution an order ("I'll sell 50 with an eighth low."); implies a not-held limit order. Antithesis of top.
Low balance method
	A method of calculating interest on the basis of the lowest balance of an account over the applicable period.
Low ball
	Slang for making an offer well below the fair value of an asset in hopes that the seller may be desperate to sell.
Low-coupon bond refunding
	Refunding of a low-coupon bond with a new, higher-coupon bond.
Low grade
	A bond with a rating of B or lower.
Low price
	The day's lowest price of a security that has changed hands between a buyer and a seller.
Low price-earnings ratio effect
	The tendency of portfolios of stocks with a low price-earnings ratio to outperform portfolios of stocks with high price-earnings ratios.
Lump sum
	A large one-time payment of money.