• A transaction involving the sale and purchase of a security.
• A verbal (or electronic) transaction involving one party buying a security from another party. Once a trade is consummated, it is considered done or final. Settlement occurs 1-5 business days later.
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| ||48 hour rule: The requirement that all pool information, as specified under the PSA Uniform Practices, in a TBA transaction be communicated by the seller to the buyer before 3 p.m. EST on the business day 48-hoursprior to the agreed upon Trade date.|
| ||Agency basis: A means of compensating the broker of a program Trade solely on the basis of commissionestablished through bids submitted by various brokerage firms. Agency incentive arrangement. A means of compensating the broker of a program trade using benchmark prices for issues to be traded in determiningcommissions or fees.|
| ||Agent: The decision-maker in a principal-agent relationship.Is a party who acts on the behalf of another. This occurs when a broker executes a Trade for the benefit of the customer. Here, the broker receives a commission. This compares to a dealer transaction. See Broker-Dealer.A firm that executes orders for or otherwise acts on behalf of another (the principal) and is subject to its control and authority. The agent may receive a fee or commission.|
| ||American option: An option that may be exercised at any time up to and including the expiration date. Related: European optionAn option that may be exercised at any time during the life of the option. Stock options that Trade in U.S. option exchanges, such as the CBOE, are of American types. Index options are of either American (option on S&P100 index, called OEX) or European types (option on S&P500 index, called SPX). See call and put options.|
| ||Assignment: The receipt of an exercise notice by an options writer that requires the writer to sell (in the case of a call) or purchase (in the case of a put) the underlying security at the specified strike price.Is the action for the seller of the option of acquiring the opposite position when an option is exercised. When a put is exercised, the writer receives a long position in securities or a long futures contract. When a call is exercised, the writer receives a short position in the securities or a short futures contract.A voluntary liquidation procedure by which a firm's creditors pass the power to liquidate the firm's assets to an adjustment bureau, a Trade association, or a third party, which is designated the assignee.|
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