The financial landscape is littered with acronyms. FYI, here are a few of the more important ones.
Acronym What It Stands For What It Means
ACATS Automated Client Account Transfer System Electronic system for moving accounts between brokerage firms
ACH Automated Clearing House Electronic funds transfer system
BPs (“bips”) Basis Points 1/100th of 1%; used frequently with interest rates
EPS Earnings Per Share Net profits of a company/shares outstanding
ETF Exchange Traded Fund A fund that trades on an exchange (like a stock) that tracks a defined index
FINRA Financial Industry Regulatory Authority One of the many regulators for the financial services industry
IRA Individual Retirement Arrangement Account allowing for tax-deferred accumulation
IRR Internal Rate of Return Return on an investment that reflects the timing of all cash flows
JT Joint Tenants Account title showing two or more co-owners
JTWROS Joint Tenants with Rights of Survivorship Upon the death of one tenant, allows for the transfer of assets to the other
MOP Maximum Offer Price Price of a fund, including any sales charges
NASDAQ National Association of Securities Dealers Automated Quotations World’s 2nd largest stock exchange by market cap
NAV Net Asset Value Net assets of a fund, quoted per share
NYSE New York Stock Exchange World’s largest stock exchange by market cap
PE (or P/E) Price Earnings Multiple at which a stock trades relative to its earnings
RMD Required Minimum Distribution Mandatory withdrawals from retirement accounts
ROI Return on Equity Net profit as a percent of the amount invested
SD Standard Deviation A measure of the variation of returns
TOD Transfer on Death Allows for transferring assets held in a single-named or joint account to beneficiaries upon death
UTD Under Trust Dated Generally shown before the trust’s creation date
UTMA Uniform Transfer to Minors Act Allows assets to be transferred to a minor with a named custodian
XD Ex-Dividend On/after the XD date, a buyer is not entitled to the current dividend payment
YTM Yield to Maturity Yield on a bond that reflects both the coupon payments and its premium/discount
Robert A. “Rocky” Mills is a Financial Advisor with the Global Wealth Management Division of Morgan Stanley in Westlake Village. The information contained in this article is not a solicitation to purchase or sell investments. Any information presented is general in nature and not intended to provide individually tailored investment advice. The views expressed herein are those of the author and may not necessarily reflect the views of Morgan Stanley Smith Barney LLC, Member SIPC, or its affiliates.