Calendar
The list of new issues scheduled to come to market in the near future, usually 30 days. Also called the visible supply. Usually qualified so as to refer to a specific area of the market e.g., stock, debt, etc.

Call
1. The exercise of the right of a corporation to prepay its debt and demand surrender of its bonds for redemption, refunding or sinking fund purposes on a specific date at a specified price.
2. An option contract which for a consideration, gives the holder the right to purchase from the writer of the call a specified price, good for a specified period of time.

Call Date
The date on which a bond may be redeemed prior to maturity at the option of the issuer.

Call Provision
The call provision describes the details by which a bond may be redeemable by the issuer in whole or in part prior to the maturity.

Callable
A feature of a bond whereby it may be redeemed by the issuer prior to maturity under terms designated prior to issuance.

Called Bonds
Bonds drawn for redemption prior to maturity.

Canadian Type Sinking Fund
A sinking fund that obligates the issuer to set aside in cash a specified percentage of the principal amount outstanding of an issue. This cash may be used to purchase either the given issue or another approved security, as defined in the original indenture.

Cancel
To withdraw an order before execution or to withdraw a new issue before it is officially brought to market.

Cap
Maximum rate of interest payable on an adjusted rate security of mortgage loan.

Capital Gain/Capital Loss
A realized gain or loss calculated at the time of sale or maturity of any capital asset or security. Refers to the profit or loss attributable to the difference between the purchase and sale prices.

Capital Spending
Nonresidential fixed investment in the GNP; consists of business outlays on long-lived productive facilities (plant and equipment) including office building and shopping center construction, as well as purchases of such long-lived items as trucks, office and farm equipment.

Capital Structure
The division of a company's capitalization among bonds, debentures, preferred and common stock, earned surplus and retained income.

Carry
The cost of financing positions; the rate of interest earned from the securities held less the cost of funds borrowed to purchase them.

Cash Equivalents
Any kind of savings account, short-term bank account, commercial paper, or other type of converted to cash.

Cash Flow
Money that the client is contributing to or withdrawing from an account during a specific period, including bank and manager (PIMCO) fees.

Cash Settlement
A delivery made and settled on the day of the transaction for government securities.

CBO
Collateralized Bond Obligation

CBOE
Chicago Board of Options Exchange

CBOT
Chicago Board of Trade

CD
1. Certificate of Deposit
2. Certificate of Delivery

CDR (Collateralized Depository Receipt)
A futures contract traded on the CBOT, representing $100,000 face amount of 8% yield maintenance GNMAs.

Cedel
Centrale de Livraison de Baleurs Mobilieres; a clearing system for Euro-currency and international bonds. Cedel is located in Luxembourg and is jointly owned by a large number of European banks.

Certificate of Deposit (CD)
An interest-bearing negotiable time deposit of fixed maturity at a commercial bank. CD's trade on a yield basis with interest computed for the actual number of days held on the basis of a 360- day year.

CFA
Chartered Financial Analyst

CFTC
Commodity Futures Trading Commission

Cheap
Inexpensive; having a price perceived to be undervalued.

Churning
Excessively trading a portfolio.

Circle
An industry practice whereby a customer indicates an interest in purchasing, and an underwriter agrees to provide, a stated quantity of a new issue security, subject to final pricing.

Clean
Describes a pot in which there are no further securities available with the full selling credit from the manager.

Clean Price
The clean price of a bond does not include accrued interest (see Dirty Price).

Clear
To consummate a trade by delivering securities in proper form to the buyer and funds in the proper form to the seller. Trades that are not cleared are said to fail.

Clearing Bank
Any commercial bank that settles corporate and government securities for customers and dealers. The clearing bank agrees to deliver and receive securities, taking cash against delivery. The bank is usually part of the Federal Reserve so as to be able to utilize the Federal Reserve Bank book entry system for government securities.

Clearing House Bank
A member of a clearing house; usually one of the 11 members of the New York Clearing House.

Clearing House Funds
Funds represented by checks drawn on a clearing house bank, which if deposited on one day will be Federal funds on the next day.

Clearing System
A system established to facilitate the transfer of ownership for securities.

CLO
Collateralized Loan Obligation

Closed
Refers to a pot in which there are no further securities available and no further bonds can be run through it.

Closed Book Period
A period, usually the two or three weeks before each coupon due date. The coupon is paid to the person holding the bond prior to the closed-book period. If this person sells the bond during this period, he must compensate the buyer for any accrued interest.

Closed-End Fund
A mutual fund in which the shares owned, representing an interest in the mutual fund's portfolio, are fixed in number. New shares are not issued regularly and old shares cannot be redeemed. Instead, shares are traded on the open market and may differ from the underlying net asset value per share.

Collateral
Securities, evidence of deposit, or other property which a borrower pledges to secure repayment of a loan.

Collateralized Mortgage Obligation (CMO)
CMOs are bonds that are collateralized by whole loan mortgages or mortgage pass-through securities. A key difference between traditional pass-throughs and CMOs is the mechanics of the principal payment process. In a pass-through, each investor receives a pro rata distribution of any principal and interest payments made by the homeowner. Because mortgages are self-amortizing assets, pass-through holder receives return of principal each month. Complete return of principal and the final maturity of the pass-through do not occur until the final mortgage in the pool is retired.

The CMO structure substitutes sequential retirement of bonds for the pro rata principal return process of pass-throughs. All principal payments go first to the “fastest-pay” tranche of bonds. Following retirement of this class, the next tranche in the sequence then becomes the exclusive recipient of principal. This process continues until the last tranche of bonds is retired.

The effect of the CMO innovation is to utilize cash flows of long maturity, monthly-pay collateral to create securities with short, intermediate and long final maturities. This broadens the range of investors for mortgage securities and ultimately forces more competitive mortgage rates for homebuyers.

Collateral Loan
A loan backed by a pledge of securities or other properties.

Collateral Trust Certificate
A bond backed by securities placed with a trustee by the issuing corporation.

Co-Manager
A term used when there is more than one manager in a securities offering. Usually "co-manager" refers to a manager not running the books. The manager running the books is the only one who directly controls distribution of securities through the syndicate.

Coming To Me (CTM)
Indicates that the market quoted by the trader is not his own, but is being made by another trader.

Commercial Bank
An institution legally authorized to issue demand deposit accounts as opposed to thrift institutions or investment banks, which are not so empowered. Thrift institutions offering demand deposit facsimile accounts in certain states are not considered to be commercial banks.

Commercial Paper
Financial instruments which can be bought and settled on the same day with a minimum of complication, which have a short-term maturity, and pay interest maturity. They are cash equivalents.

Commission
Fee charged by a broker for negotiating security or real estate transactions.

Commission Give-up
The practice of directing a portion of NYSE commissions, paid by the customer to an executing broker, to another firm not involved in the execution of the trade. This practice was largely limited to stocks and was usually in payment for research. It is now prohibited by the SEC.

Commodity Futures Trading Commission (CFTC)
A commission created by an act of Congress in 1974 which is directly responsible to the Federal Government for supervisory and enforcement functions in the futures industry.

Common Stock
Ordinary capital stock (representing ownership) in a company. Common stock does not enjoy the special privileges of preferred stock, but has voting rights.

Compensation Bid
A form of competitive bid for securities whereby the price to be paid by the underwriters equals the reoffer price to the public. Each bid specifies the dividend or coupon rate along with the amount to be paid by the issuer as compensation to the underwriters.

Competitive Bid
A method of selling securities employed by public utilities and railroads whereby the issuer invites bids from two or more syndicates. The syndicate bid which provides the lowest borrowing cost ( in the case of a debt or preferred offering) or the highest price for a common stock offering will be awarded the business.

Confirmation
Form received from broker confirming a trade transaction was made for an account.

ConnieMac
A conventional mortgage pass-through security issued by a private corporation (i.e. not GNMA or FHLMC)

Consistency
In reference to pass-through securities, refers to the historical regularity of prepayments. Low consistency means prepayments were infrequent and of relatively large size; high consistency implies more frequent payments of relatively similar size.

Consumer Price Index (CPI)
The U.S. consumer price index. It measures price changes at the retail level and is reported monthly by the government's Bureau of Labor Statistics. TIPS base their inflation adjustment on changes in the non-seasonally adjusted CPI-U (All Urban Consumers). In December 2001, the year-over-year percentage change in the CPI was 1.9%.

Consumer Spending
The sum of personal outlays on new (as opposed to used) goods and services other than housing.

Contributions
Additional funds allotted to an account from the client.

Conventional Loan
A mortgage loan neither insured by FHA nor guaranteed by VA.

Conventional Security
A security that does not adjust to compensate for inflation, like a traditional U.S. Treasury bond.

Conversion Factor
The number for a particular security which must be multiplied by the price of the futures contract to arrive at the delivery price of the security.

Convertible
A feature of certain bonds, debentures, or preferred stocks which allows them to be exchanged by the owner for another class of securities, in accordance with the terms of issue.

Convertible Bond
A bond which, at the option of the holder, is convertible into other securities of the by one corporation convertible into the equity of another. Also, some securities have been issued which are convertible into a specified amount of an underlying commodity.

Convertible Preferred Stock
A preferred stock which, in addition to having preference over common stock, can also be converted into common stock according to a pre-stated formula.

Convexity
The second derivative of a bond's price with respect to its yield, divided by its price. This number, used in conjunction with modified duration provides a more accurate approximation of the percentage price change resulting from a specified change in a bond's yield than does modified duration alone. Convexity is the price measure of how much a bond's price/yield curve deviates from a straight line (measure of the degree of curvature of the price/yield relationship).

Core-Holding
That portion of a portfolio which is regarded as a long-term holding.

Corporate Bond Equivalent (CBE) Yield
The yield that a corporate bond must offer in order to produce the same rate of return as a given investment. Corporate bonds pay interest semi-annually and their yields are assumed to be compounded semi-annually therefore, corporate bond equivalent yield is ordinarily computed for those instruments which pay interest other than semi-annually, or for which compounding is assumed to be other than semi-annually.

Corporate Bonds
Debt instrument issued by a private corporation, as distinct from one issued by a government agency or municipality.

Corporate Tax Equivalent (CTE) Yield
The rate of return required on a par bond to produce the same after-tax yield to maturity as a given bond.

Cost
The purchase price of a security, including fees, commissions, etc.

Cost Amount
This is the original cost of a position. When a position consists of several "lots" purchased at different prices it is the total cost of the lots. Any expenses associated with an acquisition (i.e., postage, insurance, commissions) are included.

Coupon
The rate of interest to be paid on a bond, most often it is paid semi-annually. Refers to the interest payment of par, or face value. Expressed as a percentage of par.

Coupon Issue
In the Treasury market, a bond or note (I.e., an issue paying semi-annual coupons) as opposed to a Treasury bill. May be collectively referred to as simply "coupons."

Covenant
A pledge by the issuer in the Bond Resolution or Indenture to do something that will presumably benefit the bondholders, or to refrain from doing something that might be disadvantageous to them.

Cover
1. To eliminate a short position by buying the securities.
2. To avoid competitive bidding ties at even yields or dollar prices by "fine-tuning" the bid or offer price (or yield), e.g., offering bonds at 99.480 instead of 991/2.

Cover Bid/Cover Offer
The second-best bid or offer, usually in a competitive bid-wanted or offer-wanted situation.

Coverage
The margin of safety for payment of debt service, calculated as the ratio of operating income plus interest expense to long and short-term interest requirements over a period. May be calculated before or after taxes.

CP
Commercial Paper

CPI
Consumer Price Index

CPN
Coupon or (COUP)

Credit Risk
The risk that an issuer may default on its securities. Relative degrees of credit risk are delineated by the ratings of the rating agencies.

Cross
To trade securities directly from the seller to the buyer.

Cross Hedge
A futures purchase or sale intended to reduce price-level risk for a financial instrument similar to, but different from, one that is futures-deliverable.

CTE
Corporate Tax Equivalent

CTM
Coming to Me

Cumulative Experience
The average rate of prepayment since the time that a pass-through security was issued.

Cumulative Preferred
A stock which has the provision that if one or more dividends are omitted, the omitted dividends will be paid before any dividend can be paid on any junior security (e.g., common stock) of the issuing company.

Current Coupon
Describes securities selling in price most nearly to par (100). In reference to pass-throughs, the nominal rate (coupon rate) at which an issuer sells securities currently. The rate usually depends on the rates of the underlying mortgages.

Current Yield
Amount of coupon income received, expressed as a percentage of the current market value of the bond or portfolio.

Cushion Bond
A high coupon bond selling at prices above its call price.

Cusip Number
Special computer identification for each security. Stands for Committee on Uniform Securities Identification Procedures.

Custodial Bank
Trustees or "caretakers" for all securities in an account. Executes all trades as directed by the investment manager (PIMCO) and warehouses all securities.

Cut-off Date
In reference to pass-through securities, the last day of the month on which a prepayment received by the issuer will be remitted to a security holder in the forthcoming payment.

CVT
Convertible or (CONV)