SHOP

An agent, acting on behalf of one or more principals, that finds parties with matching swap needs in exchange for a commission.

A contractual agreement providing for a series of exchanges of principals and/or interest in the same or different currencies. At a more general level, the term includes the exchange of fixed for floating payments on a given quantity of commodity, i.e., commodity swap. See also interest-rate swaps and currency swaps.

Generally speaking regulators breakdown capital into tier 1 and tier 2 capital. Tier one is considered core capital and generally contains items such as equity and retained earnings. Tier 2 is referred to as supplemental capital and generally contains items such as allowance for loan and lease losses (limited), non-qualifying…

Stands for “Separate Trading of Registered Interest and Principle of Securities” and refers to breaking down a coupon bearing bond into its constituent parts of interest and principle payments which can be held /traded separately. These individual cash flows can be traded as zero coupon bonds.

Also known as exercise price. The amount that must be paid (or the price that will be received) by an option owner to buy (or sell) the underlying asset from the option writer.

Long term strategy for allocating investment capital among various asset classes based on economic conditions and investor risk/return parameters and constraints. Not a trading strategy but a long term, big picture asset allocation strategy.

The minimum amount of capital required by state regulators to conduct business within the respective state.

See Z-spread.

A statistical measure of dispersion around some central (mean) value. Obtained by taking the square root of the variance.

The amount a security is trading above a specific benchmark. Important measurement to determine bond values.

1) See spot exchange rate. 2) Refers to a spot interest rate. This is also a zero coupon yield. An interest rate that represents a yield to maturity when there are no interim coupons paid between the initial payment for the instrument and the final redemption.

Also known as a spot rate. The exchange rate quoted for immediate deliver of a currency. As a practical matter, immediate delivery is understood to be two business days. See also exchange rate