Alphabetical - B

Back Office	Accounting and Settlements
Back-Testing	Testing a value-at-risk or other model using historic data.
Backwardation	When the spot or near term price of a commodity is higher than the forward rate.
Backwards Induction	A procedure for working from the end of a tree to its neginning in order to value an option.
Bank Bill	A Bill of Exchange accepted by a bank on the central bank's "eligible" list. The central bank itself would rediscount a bill of this type. Also called an Eligible Bill
Bankers Acceptance	Bills of exchange acceppted by large banks
Bankers Automated Clearing Services	??
Barrier Option	An option whose payoff depends on whether the path of the underlying asset has reached a barrier (i.e. a certain predetermined level).
Base Currency	??
Base Rate	??
Basis	The difference between the spot price and the futures price of the commodity.
Basis Point	One hundredth of a percent (0.01%)
Basis Risk	When relationships between products used to hedge each other change or break down
Basis Swap	Swap where cash flows determined by one floating reference rate are exchanged for cash flows determined by another floating reference rate.
Basket Option	An option that provides a payoff dependent on the value of a portfolio of assets.
Bear	A pessimist - selling securities in the belief of a falling stock and bond market, hence a "Bear" market
Bear Market	A falling market
Bear Spread	A short position in a put option with a strike price X1 combined with a long position in a put option with strike price X2 where X2 > X1. (A bear spread can also be created with call options).
Bearer Bond	A bond payable to whoever is in possession - that is no central register
Bed and Breakfast	Selling shares one day and buying them back the next - at the end of the tax year to maximise Capital Gains Tax allowance or claim losses against profits
Bermudan Option	An option that can be exercides on specified dates during its life.
Beta	A measure of systematic risk of an asset.
Bid Price	The price that a dealer is prepared to pay for an asset.
Bid Rate	Rate of interest offered for deposits in banking. Generally the dealer's buying price for equities, bonds, foreign exchange etc
Bid-Ask Spread	The amount by which the ask price exceeds the bid.
Bid-Offer Spread	same as Bid-Ask Spread
Big Bang	Deregulation of the UK Stock Market 27 October 1986. New regulation and an automated price quotation system. The day when minimum commissions were abolished
Bill	A short-term (3 months or so) instrument which pays interest to the holder and can be traded. Some bills do not pay interest but are issued at a discount to their face value.
Bill of Exchange	A signed promise to pay by a receiver of goods or services and kept by the supplier.
Binary Option	Option with discontinuous payoff; for example a cash-or-nothing option or an asset-or-nothing option.
Binomial Model	A model where the price of an asset is monitored over successive short periods of time. In each short period of time it is assumed that only two price movements are possible.
Binomial Tree	A tree that represents how an asset price can evolve under the binomial model.
Blacks Approximation	An approximate procedure developed by Fischer Black for valuing a call option on a dividend paying stock.
Blacks Model	An extension of the Black Scholes model for valuing European Options on futures contracts.
Black-Scholes Model	The original European Stock Option pricing model written by Black and Schole in 1972
Blue Chip	Large established companies. The most highly regarded shares.
Board Washing	The individual who handles limit orders in some exchanges. The board broker makes information on outstanding limit orders available to other traders.
BOBL	Short name for the short-term German government bond contract on the DTB
Bond	An instrument that pays a fixed amount of interest to the holder.
Bond Factor	??
Bond Ladder	??
Bond Option	An option where a bond is the underlying asset.
Bond Provisions	??
Bond Stripping	??
Bond Washing	Selling a bond prior to the ex dividend date to take a capital gain instead of receiving income.
Bonos	Spanish Government Bonds
Bonus Issue	A free issue of shares to existing shareholders
Bonus Value	??
Book Entry	??
Book Value	The value of an asset as entered in a company's balance sheet
Bootstrap Method	A procedure for calculating the zero-coupon yield curver from market data.
Boston Option	see Deferred payment option
Break Forward	see Deferred payment option
Broker	An individual (or firm) that acts as an intermediary putting buyers and sellers together for a brokerage fee.
Building Society	Institutions whose primary function is to accept the savings of small investors and channel them to house buyers in return for the security of a mortgage on the property.
Bull	An optimist, buying securities in the belief of a rising (stock and bond) market, hence a bull market
Bull Market	A rising market
Bull Spread	Buying a call option (a long position in a call) with a strike X1 combined with selling a call (short position in a call) with a strike price X2 where X2>X1 (a bull spread can also be created using put options).
Bullet Repayment	The whole of a bond or bank loan is repaid at maturity (instead of staged payments in the last few years)
Bundesbank	The German Central Bank
Butterfly Spread	A position that is created by taking a long position in a call with strike price X1, a long position in a call with strike price X3 and a short position in two calls with strike price X2 where X3 > X2 > X1 and X2 = 0.5(X1 + X2).

Back Office Accounting and Settlements
Back-Testing Testing a value-at-risk or other model using historic data.
Backwardation When the spot or near term price of a commodity is higher than the forward rate.
Backwards Induction A procedure for working from the end of a tree to its neginning in order to value an option.
Bank Bill A Bill of Exchange accepted by a bank on the central bank's "eligible" list. The central bank itself would rediscount a bill of this type. Also called an Eligible Bill
Bankers Acceptance Bills of exchange acceppted by large banks
Bankers Automated Clearing Services ??
Barrier Option An option whose payoff depends on whether the path of the underlying asset has reached a barrier (i.e. a certain predetermined level).
Base Currency ??
Base Rate ??
Basis The difference between the spot price and the futures price of the commodity.
Basis Point One hundredth of a percent (0.01%)
Basis Risk When relationships between products used to hedge each other change or break down
Basis Swap Swap where cash flows determined by one floating reference rate are exchanged for cash flows determined by another floating reference rate.
Basket Option An option that provides a payoff dependent on the value of a portfolio of assets.
Bear A pessimist - selling securities in the belief of a falling stock and bond market, hence a "Bear" market
Bear Market A falling market
Bear Spread A short position in a put option with a strike price X1 combined with a long position in a put option with strike price X2 where X2 > X1. (A bear spread can also be created with call options).
Bearer Bond A bond payable to whoever is in possession - that is no central register
Bed and Breakfast Selling shares one day and buying them back the next - at the end of the tax year to maximise Capital Gains Tax allowance or claim losses against profits
Bermudan Option An option that can be exercides on specified dates during its life.
Beta A measure of systematic risk of an asset.
Bid Price The price that a dealer is prepared to pay for an asset.
Bid Rate Rate of interest offered for deposits in banking. Generally the dealer's buying price for equities, bonds, foreign exchange etc
Bid-Ask Spread The amount by which the ask price exceeds the bid.
Bid-Offer Spread same as Bid-Ask Spread
Big Bang Deregulation of the UK Stock Market 27 October 1986. New regulation and an automated price quotation system. The day when minimum commissions were abolished
Bill A short-term (3 months or so) instrument which pays interest to the holder and can be traded. Some bills do not pay interest but are issued at a discount to their face value.
Bill of Exchange A signed promise to pay by a receiver of goods or services and kept by the supplier.
Binary Option Option with discontinuous payoff; for example a cash-or-nothing option or an asset-or-nothing option.
Binomial Model A model where the price of an asset is monitored over successive short periods of time. In each short period of time it is assumed that only two price movements are possible.
Binomial Tree A tree that represents how an asset price can evolve under the binomial model.
Blacks Approximation An approximate procedure developed by Fischer Black for valuing a call option on a dividend paying stock.
Blacks Model An extension of the Black Scholes model for valuing European Options on futures contracts.
Black-Scholes Model The original European Stock Option pricing model written by Black and Schole in 1972
Blue Chip Large established companies. The most highly regarded shares.
Board Washing The individual who handles limit orders in some exchanges. The board broker makes information on outstanding limit orders available to other traders.
BOBL Short name for the short-term German government bond contract on the DTB
Bond An instrument that pays a fixed amount of interest to the holder.
Bond Factor ??
Bond Ladder ??
Bond Option An option where a bond is the underlying asset.
Bond Provisions ??
Bond Stripping ??
Bond Washing Selling a bond prior to the ex dividend date to take a capital gain instead of receiving income.
Bonos Spanish Government Bonds
Bonus Issue A free issue of shares to existing shareholders
Bonus Value ??
Book Entry ??
Book Value The value of an asset as entered in a company's balance sheet
Bootstrap Method A procedure for calculating the zero-coupon yield curver from market data.
Boston Option see Deferred payment option
Break Forward see Deferred payment option
Broker An individual (or firm) that acts as an intermediary putting buyers and sellers together for a brokerage fee.
Building Society Institutions whose primary function is to accept the savings of small investors and channel them to house buyers in return for the security of a mortgage on the property.
Bull An optimist, buying securities in the belief of a rising (stock and bond) market, hence a bull market
Bull Market A rising market
Bull Spread Buying a call option (a long position in a call) with a strike X1 combined with selling a call (short position in a call) with a strike price X2 where X2>X1 (a bull spread can also be created using put options).
Bullet Repayment The whole of a bond or bank loan is repaid at maturity (instead of staged payments in the last few years)
Bundesbank The German Central Bank
Butterfly Spread A position that is created by taking a long position in a call with strike price X1, a long position in a call with strike price X3 and a short position in two calls with strike price X2 where X3 > X2 > X1 and X2 = 0.5(X1 + X2).