“Balance of Payments” – A record of accounts for all financial transactions between one particular country and the rest of the world.
“Balance Sheet” – A record of accounts which summarises a company’s financial condition at a specific point in time, including assets, liabilities and net worth.
“Banker’s Acceptance (BA)” – A future payment promised by a non-financial institution but which is guaranteed by a bank.
“Bar Chart” – A visual representation of price data using rectangular bars to depict market opens, closes, highs and lows over a particular time period.
“Basis” – The difference between the interest rate implied by a futures contract, and the interest rate implied by the underlying cash instrument on which its based.
“Basis Point” – One-hundredth of a percentage point (or 0.01%).
“Basis Risk” – Risk associated with differences between the derivatives price, and the price of the underlying financial asset or commodity on which the derivative is based.
“Bear” – A market participant more inclined to sell than buy.
“Behavioural Finance and Economics” – The study of the social, cognitive and emotional underpinnings of finance and economic theory.
“Beige Book” – A report on current economic conditions issued by the US Federal Reserve eight times each year.
“Bias” – The tendency to discount other perspectives or viewpoints.
“Bid” – The price at which the market is willing to buy.
“Bid-Offer Spread” – The difference between the price at which the market is buying and the price at which the market is selling.
“Bid-to-Cover Ratio” – The ratio between the value of bonds bid for and the value of bonds actually sold during a bond auction.
“Bills” – A government-issued short-term bond with a maturity of less than a year.
“Blue Chip” – A term used to describe a company whose stock is highly valued because of public confidence stemming from a long record of consistent earnings. Derived from blue casino counters or ‘chips’ which have the highest value.
“Bollinger Bands” – A technical analysis tool which plots two lines representing two standard deviations above and below a moving average of the price.
“Bond” – A financial instrument in which an investor lends money to a single or group entity for a specific period of time at a fixed interest rate.
“Bond Premium” – The price of a bond over and above its actual face value.
“Boom” – A period of rapid economic growth.
“Brainstorm” – The process of engaging in the free-flow of ideas without constraints or limitations.
“Bretton Woods Agreement” – An international system for monetary and exchange rate management agreed upon by the major Allied Powers in 1944 in a meeting at Bretton Woods, New Hampshire.
“Broken Window Fallacy” – A parable created by the French economist Frederic Bastiat illustrating why destruction, and the money spent on recovering from that destruction, does not provide a net-benefit to society.
“Broker” – A financial agent that arranges and manages transactions between buyers and sellers.
“Bull” – A market participant more inclined to buy than sell.
“Bull/Bear Trap” – An overextended and unsustainable directional move initiated by either buyers or sellers which sees a subsequent reversal in market direction back to previous levels.
“Bundesbank” – The central bank of Germany.
“Bundles” – The simultaneous sale or purchase of one each of a series of consecutive STIRS contracts.
“Bureau of Labour Statistics (BLS)” – The statistical unit of the US Department of Labour, responsible on compiling data on employment and earnings.
“Bushel” – A unit of volume or capacity used within the agricultural commodity markets, equivalent to approximately 2200 cubic inches or 36 litres.
“Business Cycle” – Fluctuations in economic activity across the overall economy which occur over a period of time.
“Bust” – A period of rapid economic contraction.