Documentation >
Glossary U
Glossary U
The financial world is full of jargon - i.e. strange words no-one understands. Here we try to explain some of the many technical terms.
A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z
U
Underlying Security
The stock, bond, index, or other financial instrument upon which a derivative such as an option is based. It is the underlying security that is subject to being bought or sold upon exercise of the option.
Under-Fitting
Not properly explaining the known data or facts. An inadequate model.
Upgrades/Downgrades
Analysts make buy/hold/sell recommendations for the stocks they follow. An upgrade is a change from a sell to a hold or buy, or from a hold to a buy. A downgrade is a change from a buy to a hold or sell, or from a hold to a sell.
Since most analysts recommendations are of the BUY variety, and there is always pressure on them to keep 'talking the happy talk', whenever there is a downgrade it is very likely to trigger a sizeable reaction; experienced investors having already taken account of these customs will tend to panic, as e.g. HOLD in analyst-speak actually means SELL and so on. If an analyst ever makes a SELL recommendation, chances are the company is about to go bust.
Bond rating agencies, e.g. Standard & Poor also rate corporate bonds along a sliding scale which measures the credit-worthiness of the company; downgrades of a company's bonds can also trigger a violent reaction, e.g. lots of investment funds are only allowed to buy bonds of a specific quality, if there is a downgrade, then a lot of automatic selling is triggered. Downgrades can therefore cause a cascade effect, with serious consequences.
User Interfaces and Software Design
- Too many choices will confuse the user.
- People communicate verbally.
- People understand visually.
- Mathematical equations are a private language for efficient communication between scientists; never expose the general public to an equation.
- If you show it, anyone can understand it.
- If it is interactive, people will learn faster.
- No normal person ever reads the manual.
- If it needs a manual, then it is too complicated.
- Invalid choices should be made impossible.
A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z