Financial Vocabulary

#241

Initial margin

Example sentences

1. She paid the initial margin to open the futures position.
2. The broker set the initial margin at $2,000.
3. Initial margin is required before the trade begins.

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#242

Maintenance margin

Example sentences

1. The account fell below the maintenance margin.
2. Maintenance margin is the minimum amount that must remain.
3. The trader added cash to meet the maintenance margin.

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#243

Margin call

Example sentences

1. The broker sent a margin call after the market fell.
2. He added money to answer the margin call.
3. A margin call may force a trader to close a position.

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#244

Trading leverage

Example sentences

1. Trading leverage allowed him to control a larger position.
2. High trading leverage can cause large losses.
3. She reduced her trading leverage to lower risk.

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#245

Long position

Example sentences

1. He opened a long position because he expected the price to rise.
2. The long position gained $200 today.
3. She closed the long position before the market ended.

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#246

Short position

Example sentences

1. She opened a short position because she expected a price fall.
2. The short position lost money when the stock rose.
3. A short position can have high risk.

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#247

Hedging

Example sentences

1. The airline used hedging to manage fuel prices.
2. Hedging can reduce the effect of market changes.
3. The farmer bought a contract for hedging.

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#248

Speculation

Example sentences

1. The trade was based on speculation about future prices.
2. Speculation can offer profit but also high risk.
3. The company avoids using customer money for speculation.

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#249

Arbitrage

Example sentences

1. The trader used arbitrage to profit from two different prices.
2. Arbitrage often involves buying and selling at the same time.
3. The price difference disappeared after the arbitrage trade.

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#250

Settlement

Example sentences

1. The trade reached settlement two days later.
2. During settlement, the buyer pays and receives the security.
3. The bank confirmed the settlement of the bond trade.

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#251

Valuation

Example sentences

1. The analyst completed a valuation of the company.
2. The valuation showed that the shares were expensive.
3. A business valuation can help during a sale.

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#252

Intrinsic value

Example sentences

1. The investor estimated the stock's intrinsic value at $40.
2. Intrinsic value may differ from the market price.
3. She bought the stock below its intrinsic value.

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#253

Market value

Example sentences

1. The house has a market value of $250,000.
2. Market value can change with supply and demand.
3. The company compared book value with market value.

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#254

Book value

Example sentences

1. The machine's book value fell after depreciation.
2. Book value comes from the company's accounting records.
3. The stock traded below its book value.

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#255

Enterprise value

Example sentences

1. The company's enterprise value is $5 billion.
2. Enterprise value includes debt and subtracts cash.
3. The buyer used enterprise value to compare companies.

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#256

Price-to-earnings ratio

Example sentences

1. The stock has a price-to-earnings ratio of 18.
2. A high price-to-earnings ratio may show strong growth expectations.
3. She compared the price-to-earnings ratio with other companies.

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#257

Forward price-to-earnings ratio

Example sentences

1. The forward price-to-earnings ratio uses expected future earnings.
2. The stock's forward price-to-earnings ratio fell after the forecast changed.
3. Analysts compare the forward price-to-earnings ratio with the current ratio.

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#258

Price-to-book ratio

Example sentences

1. The bank stock has a price-to-book ratio of 1.2.
2. A low price-to-book ratio may interest value investors.
3. He calculated the price-to-book ratio from the balance sheet.

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#259

Price-to-sales ratio

Example sentences

1. The company has a price-to-sales ratio of 3.
2. The price-to-sales ratio compares market value with revenue.
3. She used the price-to-sales ratio because profit was negative.

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#260

Enterprise-value-to-EBITDA ratio

Example sentences

1. The enterprise-value-to-EBITDA ratio is lower than the industry average.
2. Analysts use the enterprise-value-to-EBITDA ratio to compare businesses.
3. The acquisition price increased the enterprise-value-to-EBITDA ratio.

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