Non-Assented Stock Or Bonds

Stock or bonds which the owners refuse to deposit under an agreement by which their status will be changed. For additional information see Readjustment.

Non-Cumulative Stock

Stock on which dividends, if not paid, do not accumulate - that is, if dividends are not paid for a period they have not subsequently to be paid for the period when they were not declared.

Non-Interest-Bearing

Bearing or paying no interest. The money issued by the United States government, since the government pays no interest on it, is a non-interest-bearing obligation; the bonds issued by the United States government, since the government pays interest on them, are interest-bearing obligations.

Note Broker

One who effects the sale of promissory notes. A note broker is different from a money broker. The commission of a note broker is generally 1/8 or 1/4 or 1% of the amount of the note. This commission is paid by the one for whom the broker sells the paper. The buyer pays no commission.

On A Scale

A term used in speculative operations in stocks, meaning buying or selling, as the case may be, at stated intervals, in prices as prices decline or advance. For instance, buying at 100, 98, 96, 94 and 92 would be buying on a 2% declining scale. Reversing the order of prices would be buying on an ascending scale. The operation of selling on a scale is conducted in the same fashion.

On Margin

When stocks are bought or are sold short on margin a percentage of the par (face) value, say 10%, is deposited with the broker to secure him against possible loss. The amount deposited is margin.

For information as to margin or speculative operations in stocks bonds, grain, lard, pork, short ribs, cotton, coffee and silver bullion see margin.

Option

Property bought or sold to be received or delivered by the buyer or seller in accordance with the terms agreed upon. Sometimes the buyer pays for the privilege of calling for the delivery of the property within a certain time if he so wills, but he is not obliged to take it; sometimes the seller pays for the privilege of delivering the property.

In speculation an option is the purchased privilege of either receiving or delivering a specific amount of anything (as stocks, grain, cotton, coffee, etc.) at a specified price within a specified time.

In stocks bought on the buyer's option the buyer may, when the option is for four days or more, demand delivery of the stock on any day within the time specified on one day's notice to the seller. In stocks sold on seller's option, when the option is for four days or more, the seller may deliver the stock to the buyer on any day within the time specified on one day's notice to the buyer.

When a dividend becomes due on a stock during the pendency of an option on it the dividend is collected by the seller of the stock, who holds it, allows interest on it and pays the dividend, with the interest on it, to the buyer on the settlement of the contract. When an option on a stock matures during the closing of transfer books, the seller of the stock gives to the buyer of the stock a due bill for the amount of the dividend which is payable when the dividend is paid, but the due bill does not bear interest.

Optional Bond

A bond maturing (expiring) at a specified date, but which may be redeemed (paid and cancelled) after a designated date at the pleasure (option) of the company (or government) issuing it. Thus, a bond maturing in fifty years, but which may be redeemed after ten years, is an optional bond.

Ordinary Stock

Common or general stock. In Great Britain, when an ordinary (common) stock has been divided into two parts, one part, called deferred, receives no dividend until the other part, called preferred, has received a dividend at a fixed rate. The deferred stock is called A stock and the preferred stock is called B stock.

This B or preferred stock is not the same as preferred stock in the United States. What in the United States is called preferred stock is in Great Britain called preference stock, and preference stock in Great Britain may be divided into two or more classes called first preference, second preference, etc., just as preferred stock in the United States may be divided into two or more classes called first preferred, second preferred, etc. When, however, there is but one class of preference stock ahead of an ordinary stock in Great Britain, the B or preferred stock is equivalent to second preferred stock in the United States.

Outside Broker

A broker who is not a member of an exchange; one who deals in securities that are not dealt in on a stock exchange. A dealer in the outside market or on the curb is an outside broker. In New York such a broker is not a bucket shop keeper; see Bucket Shop. In London an outside broker is one who is not a member of the London Stock Exchange, and is sometimes described as a bucket shop keeper. Many English outside brokers, however, conduct a perfectly legitimate business.