• Is a class of bonds often described as short or long-term. It is critical to analyze the relationship of these bonds relative to the underlying collateral coupon. One version of these bonds is vulnerable to extension risk whereas another version is vulnerable to call risk.
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| ||Call risk|
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| ||Best pricing: Is a sophisticated pricing algorithm and methodology. It sifts and compares live actual prices when available. If live market prices are not available, then it jumps to a dynamic, Sequential and hierarchical pricing module which generates fair price estimates for evaluation and trading purposes.|
| ||Collateralized mortgage obligation: Is a complex bond structure which reallocates interest and principal payment streams. These tranches, which are often designated as A to Z pieces or securities, are engineered from mortgage backed securities used as the underlying collateral. Collateralized Mortgage Obligations come in many shapes and sizes and are often viewed as unique constructions. Some of the more commonly named tranches are: Interest Only, Principal Only, Floater, Inverse Floater, Planned Amortization Class, Support, Scheduled, Sequential, Targeted Amortization Class, and Z or Accrual Bond. Often, many of these securities contain option characteristics. Related structures are Collateralized Bond Obligations and Collateralized Loan Obligations.Abbreviated CMO. A security backed by a pool of pass-throughs, structured so that there are several classes of bondholders with varying maturities, called tranches. The principal payments from the underlying pool of pass-through securities are used to retire the bonds on a priority basis as specified in the prospectus. Related: mortgage pass-through securityA Collateralized Mortgage Obligation (CMO) is a vehicle that repackages the cashflows in a way that redistributes prepayment risk.|
| ||Decision tree: Method of representing alternative Sequential decisions and the possible outcomes from these decisions.|
| ||On balance volume: Is an analytical technique which creates a time series to determine whether a stock or futures contract is subject to Accumulation or Distribution. The basic rule is straightforward. If the instrument was up on the day, then the entire volume is assigned a plus sign and is positively interpreted. If the instrument was down on the day, then the entire volume is assigned a minus sign and is negatively interpreted. These pluses and minuses are summed on a cumulative Sequential basis. The analysis assumes that if the instrument is trading at the same price over time and the On-Balance-Volume (OBV) series is increasing, then the instrument is being accumulated and is poised for an upside move. Conversely, if the instrument is trading at the same price over time, and the OBV series is decreasing, then the instrument is being distributed and is poised for a downside move. There are many variations of this theme. Some use each transaction while others use only large or block trades.|
| ||Series: Can refer to a Sequential or chronological arrangement of bonds. This arrangement is sometimes referred to as Tranches or Serial Bonds. The term also refers to the financial industry test and associated license.|
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| ||Sequential analysis|
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