Dr. Harvey's Financial Glossary

Tuesday, March 16, 2010

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Go along: Used for listed equity securities. Buy or sell at prices that randomly occur on the floor, participating in what trades the specialist and other players will allow.
Go around: Describes the N.Y. Federal Reserve Bank's trading desk practice of communicating with primary dealers to establish a market of bids and offers on behalf of the Federal Open Market Committee.
Go to: Used in the context of general equities. Sell insurance ("we've got 50 IBM to go".).
Goal: An individual's or institution's financial objective.
Godfather offer: An aggressive takeover technique in that the proposed offer of the acquiring company is so large that management of the target company cannot refuse, out of fear of lawsuits or shareholder revolt.
Goes: Used in the context of general equities. (1) Trades ("10 IBM goes on at 115 "); see Print; (2) indicates a change in the stock's inside market ("Apple goes 3/4 bid ").
Go-go fund: A type of mutual fund in highly aggressive growth stocks. The fund has high levels of risk and potential return.
Going ahead: A broker-dealer trades in a personal account prior to filling the orders of his or her clients. Prohibited by the NASD rules of fair practice.
Going away: The type of bond purchased by dealers for immediate resale to investors, as opposed to purchasing bond, to hold for some amount of time, and then reselling it at a future date.
Going into the trade: Used in the context of general equities. 1) Condition of the traders position in the security and expectations of stock placement with accounts just prior to taking an order to the exchange floor for execution ; 2) On the way in. Antithesis of come out of the trade.
Going long: The investor's purchase of a security for investment or speculation that the price will rise resulting in a profit once the security is sold. See:: long position. Antithesis of going short.
Going out: Used in the context of general equities. Soliciting/advertising over the SS1, NASDSAQ, or Autex.
Going private: When publicly owned stock in a firm is replaced with complete equity ownership by a private group. The firm is delisted on stock exchanges and can no longer be purchased in the open markets.
Going public: When a private company first offers shares to the public market and investors. See: IPO.
Going short: Selling stock that an investor does not own by borrowing shares from a broker. The assumption is that the price will fall. The investor then buys (covers the short) the shares at a lower price than what they were sold for, recognizing the difference as a profit. Antithesis of going long.
Going-concern value: The value of a company to another company or individual in terms of an operating business. The difference between a company's going-concern value and its asset or liquidation value is deemed goodwill and plays a major role in mergers and acquisitions.
Gold bars: Bars with a minimum content of 99.5% gold, which may be held by central_bank or traded by investors.
Gold bond: Bonds issued by gold-mining companies and backed by gold. The bonds make interest payments based on the level of gold prices.
Gold bullion: Investment-grade, pure gold, which may be smelted into gold coins or gold bars.
Gold Carry Trade: A carry trade where you borrow and pay interest in order to buy something else that has higher interest. The gold carry trade works as follows. A central bank loans a bank (sometimes called a bullion bank) some gold. The gold lease rate is usually very low. The bullion bank immediately sells the gold and invests in securities with a higher rate of return, such as government long-term bonds. The carry return is the return on the bonds minus the gold lease rate. However, this trade is risky on two dimensions. First, if the bullion bank invested in long-term bonds and the interest rate goes up, the trade could be unprofitable. More seriously, the bullion bank has effectively sold the gold short. If the loan is called by the Central bank and if gold has risen in value, the bullion bank will have to go into the market and purchase higher priced gold. Indeed, if many banks are short, the unwinding of the gold carry trade could drive the gold price even higher. Related: Carry Trade.
Gold certificate: Certificate of an investor, that shows proof of ownership of gold bullion.
Gold coins: Coin minted in gold, such as the American Eagle or the Canadian Maple Leaf.
Gold exchange standard: A fixed exchange rate system adopted in the Bretton Woods agreement. It required the U.S. to peg the dollar to gold and other countries to peg their currencies to the dollar.
Gold fixing: The process of determining the price of gold based on supply and demand forces of the market ; which occurs twice daily in London.
Gold mutual fund: A mutual fund that primarily invests in gold-mining companies' stock.

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