Labor Force
Those people either who have jobs or who are looking for work. the figures are obtained through monthly inquiry from a rotating sample of households.

Labor Force Participation Rate
The labor force as a percentage of the total population.

Laddering
A fixed income portfolio strategy in which assets are distributed evenly over a range of maturities.

Leading Indicators
Those economic statistics that in the past have turned up or down in advance of the general business situation. The Leading Indicator Index is a composite of several such series. There are also Coincidental Indicators (that move with the situation) and Lagging Indicators ( that move after the situation).

Legal List
A list of prime investments selected by various states, into which certain institutions and fiduciaries may invest their funds.

Legality
The legal status of a bond generally used to indicate whether it is a legal investment for savings banks in Connecticut, Massachusetts, New Hampshire, New Jersey and/or New York. Also called Legal Status.

Leg-In
To execute the first side of a spread trade. This presumes that each side is done separately to establish the spread.

Lehman Brothers U.S. TIPS index
An index is a statistical yardstick, composed of a basket of securities defined by a set of characteristics. The Lehman Bothers U.S. TIPS index is considered a benchmark for funds investing primarily in real return bonds.

Less the Reallowance
Refers to a trade between two NASD member dealers of an item subject to syndicate restrictions at the maximum permissible discount. Often abbreviated as "less the re".

Leverage
1. The effect of the use of senior capital (bonds and preferred stocks) over junior capital (common stock) in capitalizations.

2. A measurement of a portfolio's exposure to market risk.

Lifting a Leg
Closing out one side of a spread trade by making the transactions with the securities involved individually to eliminate the spread.

Limit
The maximum daily price change of a futures contract above or below the previous day's settlement price.

Limit Order
An order to buy or sell at a specific price or better.

Liquidity
The ability to convert an investment into cash promptly with a minimum risk of principal.

Liquidity Preference
The increased willingness of investors to hold issues that are more liquid. In the Treasury market, where the shorter maturity issues are generally more liquid, the yield curve often has a rising (positive) shape due in part to liquidity preference.

Liquidity Premium
The extent to which yields are lower on more liquid securities die to the relative ease with which such securities can be bought or sold in the secondary market.

Listed
An issue traded on the New York Stock Exchange or other major exchange.

Loan-to-Value Ratio
The relationship between the amount of a mortgage loan and the appraised value of the property, expressed as a percentage of the appraisal value.

Lock
When both the buyer and the seller wish to execute at the same price and neither wants to concede the commission to the broker to execute the transaction.

London Interbank Offered Rate (LIBOR)
The posted rate at which prime banks offer to make Eurodollar deposits available to other prime banks for a given maturity which can range from overnight to five years.

Long
Signifies an ownership position of a security of sale without ownership. Opposite is "short".