Warrant
An options contract often sold
with another security. For instance, corporate bonds may be sold with warrants
to buy common stock of that corporation. Warrants are generally detachable.
Wash sales
A wash sale involves a person,
either directly or indirectly, being both the buyer and seller of securities in
the same transaction, so that there is no actual change in ownership of the
securities. The manipulator will undertake frequent trades hoping to attract
other investors who note the increased turn over in the security. The
manipulator aims to gain financially through creating a small price
differential between the buy and sell rates of the security in question.
White Knight (U.S.)
A friendly bidder, willing to
offer more for a target share than an existing hostile bidder to rescue a
company that is about to fall into the hands of an unwelcome suitor. They are
usually persuaded by the company that is subject to a hostile bid to come to
its rescue.
Window Dressing
A manoeuvre often engaged in by
companies, banks, mutual funds etc., at the end of the accounting period in
order to impress stock holders who will be receiving the report showing that
funds are better managed and invested than what might have been drawn up.
Winner’s Curse
The tendency that in a bidding
contest or in some types of auctions, the winner is the bidder with the highest
(over-optimistic) estimate of value. This explains the high frequency of
negative returns to acquiring firms in takeovers with multiple bidders.
Wolf
Speculators who make a kill in
the market.
Worst case scenario loss
The worst case loss of a
portfolio would be calculated by valuing the portfolio under several scenarios
of changes in the underlying prices and volatility. The maximum loss in any situation
is referred to as the Worst Scenario Loss.
Writer
A person who issues an option.
The individual who at the end of the day has to buy or sell the asset on which
the option is written, should the person who holds the option wish to exercise
his rights.
