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Often used in risk arbitrage. Hostile takeover attempt in which the acquirer offers an exceptionally large
premium over the market-value of the acquirees share so as to as to squeeze (hug) the target into
acceptance.
Bear market
Any market in which prices are in a declining trend. For a prolonged period, usually falling by 20% or more.
Bear raid
Used in the context of general equities. Attempt by investors to opportunistically move the price of a stock by
selling large numbers of shares short. These investors pocket the difference between the initial price and the
new, lower price after this maneuver. This technique is illegal under S.E.C rules, which stipulate that every
short sale must be on an uptick.
Bear spread
Applies to derivative products. Strategy in the options market designed to take advantage of a fall in the
price of asecurity or commodity, usually executed by buying a combination of calls and puts on the same
security at different strike prices in order to profit as the securitys price falls.
Beating the gun
Used in the context of general equities. Gaining an advantageous price in a trade through a quick response
to market developments.
Before-tax profit margin
The ratio of net income before taxes to net sales.
Beggar-thy-neighbor
An international trade policy of competitive devaluations and increased protective barriers where one
country seeks to gain at the expense of its trading partners.
Beggar-thy-neighbor devaluation
A devaluation that is designed to cheapen a nations currency and thereby increase its exports at the
expense of other countries. Devaluation can also reduce a nations imports. Such devaluations often lead to
trade wars.
Behind
Used for listed equity securities. At the same price but entered after your order/interest, such as on the
specialists book. Antithesis of ahead of you.
Bellwether issues
Related: Benchmark issues.
Benchmark
The performance of a predetermined set of securities, used for comparison purposes. Such sets may be
based on published glossaryes or may be customized to suit an investment strategy.
Benchmark error
Use of an inappropriate proxy for the true market portfolio.
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