Branch Office Manager (BOM)
Individual who is in charge of a branch office of a brokerage firm or a bank. BOMs who supervise the activities of at least three brokers must pass supervisory tests given by the exchanges and the FINRA.
See: Broker
Breadth of the Market
Also called "advance/decline" indexes, it is a percentage of stocks participating in a market move. If 2/3 of the stocks listed on an exchange rise during a trading session, most analysts will consider the move to be a good breadth of the market.
See: Fundamental Analysis; Index;
Market Analysis; Technical Analysis
Break
1: A discrepancy in a brokerage firm's accounts.
2: A sudden, steep drop in a security's price or in the overall market.
Break-Even Point
In securities and in options, it is the price where the investor has neither a gain nor a loss from the transaction. However, the break-even point is calculated differently depending on the option strategy. The break-even points are determined by:
* Long calls and short uncovered calls--the strike price plus premium.
* Long puts and short uncovered puts--the strike price minus premium.
* Short covered calls--the purchase price minus premium.
* Short put covered by short stock--the short sale price of underlying stock plus premium.
See: Call Option; Long Position;
Option Premium; Options;
Put Option; Selling Short;
Short Position; Strike Price;
Uncovered Call Option; Uncovered Put Option;
Underlying Security
Breakout
Movement of a security's price that is above or below an established trading range. The movement may either be above a resistance level or below a support level. A breakout is considered to indicate a continuing move in the same direction.
See: Resistance Level; Support Level;
Trading Range
Breakpoint
Dollar levels of investment purchases in a mutual fund that qualify an investor for reduced sales charges. The purchases may either be a lump sum or by accumulating shares.
See: Breakpoint Sale; Letter Of Intent; Mutual Fund
Breakpoint Sale
Solicitation of mutual fund purchases at dollar amounts that are just below the eligibility for a breakpoint (reduced sales charges). Sales within $1,000 of breakpoint are usually considered to be breakpoint sales. It is an unethical practice that is in violation of FINRA rules.
See: Breakpoint; Mutual Fund; Rules Of Fair Practice
Breakup Value
Total market value of a corporation if each of its divisions operate independently and has its own stock price. Also called private market value (PMV), analysts look for high PMV in relation to market values to identify bargains and potential target companies.
See: Private Market Value; Target Company
Broad Tape
Dow Jones news ticker tape used by brokerage firms. The service continuously reports major news developments and financial information. The phrase also refers to comparable information provided by Associated Press (AP), United Press International (UPI) or Reuters.
See: Ticker Tape
Broker
A person who handles investors' orders to buy and sell securities. For this service a commission is usually charged. Brokers specializing in stocks, bonds, options, or commodities act as an agent.
See: Account Executive; Dealer;
Discount Broker; Full Service Broker;
Registered Representative
Broker's Broker
A security firm that acts as an agent for another security firm.
See: Agency; Specialist
Broker-Dealer
See: Broker; Dealer
Brokered CD
Certificate of Deposit (CD) that is issued by a bank and bought in bulk by brokerage firms who resell them to their customers. Brokered CD's may pay as much as 1% more than those sold directly by banks, carry federal deposit insurance up to $100,000,
are liquid on a secondary market made by the broker, and investors are not charged a commission.
See: Broker; Certificate Of Deposit;
Liquidity; Secondary Market
Brokers' Loan
Money borrowed by brokerage firms from banks or other brokerage firms for financing inventories of stock, a firm's own investments, and customers' purchases of securities on margin.
See: Broker Loan Rate; Call Loan; Call Loan Rate;
Margin
Broker Loan Rate
Interest rate charged to brokers when borrowing funds from banks to cover their clients' security positions. The rate is usually approximately a point above short-term interest rates such as the federal funds rate. Broker loans are callable on 24-hour notice. Hence, the broker loan rate is sometimes called the "call loan rate."
See: Brokers' Loan; Callable; Call Loan Rate; Interest
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Glossary
