De-Jargonize

»   Bank run (run on the bank) – this is a crisis faced by banks when customers and investors feel the bank has become insolvent and cannot pay of its debts. The customers then tend to remove all their deposits from the bank which trips the bank towards bankruptcy and is called as run on the bank. Argentine crisis of 1999-2002.

»  Banking Panic- occurs when multiple banks simultaneously are facing bank runs hence triggering a collapse of faith in the banking system. This was one of the major reasons for the great depression of 1930’s.

»    Acid test (Quick Ratio) - is understood as on any given day the ability of the firm to clear its current liabilities. Hence cash or cash equivalents and highly liquid current assets are used e.g cash, marketable securities.

» Factors of Production - are any commodities or services used to produce goods and services. 'Factors of production' refers specifically to the primary factors, which are stocks including land, labor (the ability to work), and capital goods applied to production. The primary factors facilitate production but neither become part of the product (as with raw materials) nor become significantly transformed by the production process. Apart from the basic 3 factors human knowledge and state of technology are also considered factors.

»    Slippage – It is the difference between estimated transaction costs and the amount actually paid. Brokers may not always be effective enough at executing orders. Market-impact, liquidity, and frictional costs may also contribute. Algorithmic trading is often used to reduce slippage.

»    Golden Share – is an absolute share in terms of voting rights which is able to veto all other shares, generally held by government organizations.

»    Squeeze-Out - in a joint stock company a large group of share holders force a removal of other shareholders by giving them a cash compensation in exchange for their shares.

»    Iceberg Order – occurs when investors divide a large single order into smaller lots so as to hide their order quantity and by ordering those lots at different times can reduce price movements occurring due to the heavy demand or supply

»    To do a ‘Haircut’ – is when traders exchange at a price and re-exchange at a very small spread to insure higher returns as the trading is done in huge volumes.

»      Champagne Stock - term used to describe a stock that has appreciated dramatically. A champagne stock is one that has made shareholders a great deal of money. Usually seen in bubbled up stock such as the dotcom bubble of 2000’s

»      Bear hug - An offer made by one company to buy the shares of another for a much higher per-share price than what that company is worth. usually made when there is doubt that the target company's management will be willing to sell.