See: Prospectus

Wallflower
A security that is no longer preferred by investors. Wallflower securities are apt to have low price/earnings ratios.

See: Price/Earnings Ratio

Wall Street
1: Term used when referring to the investment community as a whole--also referred to as "the Street".

2: Popular name for New York City's financial district, where the New York and American Stock Exchanges and a multitude of brokerage firms are headquartered.

See: American Stock Exchange; New York Stock Exchange

Warrant
A certificate that gives a shareholder the right to purchase a security at a specified price within a predetermined time period or perpetually. Corporations issue warrants directly and is sometimes offered along with a security as incentive to buy. The abbreviation "WT" is used in newspaper stock listings.

See: Ex-Warrants; Subscription Warrant; With Warrants

Wash Sale
1: A security that is bought or sold, either concurrently or within a short period of time, to create artificial market activity to profit from a rise in the security's price.

2: The sale of a security and then the repurchase of shares within 30 days. The Internal Revenue Service (IRS) automatically disallows any losses for tax purposes. The IRS also extends the wash sale prohibition to closing short sales.

See: Selling Short

Wasting Asset
1: Securities with a value that expires at a specified time in the future. The time values of the securities deteriorate as their termination date approaches. Examples of wasting assets are option contracts, warrants and rights.

See: Options; Right; Time Value; Warrant

2: Fixed assets that have a limited life. Thus, they are subject to depreciation.

See: Depreciation; Fixed Assets

3: Natural resources that diminish in value as the assets are depleted and therefore are subject to amortization. Examples are oil and gas extractions.

See: Amortization; Depletion Accounting

Watch List
List of securities under surveillance by either a brokerage firm, exchange or other self-regulatory organization. A security may be on a watch list for various business or regulatory reasons.

Watered Stock
Stock representing ownership of overvalued assets whose total worth is less than their invested capital. The condition of overcapitalized corporations may result from inflated accounting values, operating losses or excessive dividends. Some negative characteristics of watered stock are the inability to recoup full investment in liquidation, insufficient return on investment, low market value and the firm's reduced ability to capitalize on growth opportunities. The customary method of correcting the situation is for a corporation to either increase its assets without increasing its outstanding shares or reduce outstanding shares without reducing assets. Other methods do exist.

See: Dividends; Issued And Outstanding; Liquidation; Overvalued; Par

WD
Conditional transactions on the secondary distribution of shares issued and outstanding. An example is a wholly owned subsidiary. The abbreviation "WD" is used in newspaper stock listings.

See: Issued And Outstanding; Secondary Distribution

Weak Market
Market typified by larger number of sellers then buyers along with a prevailing trend of declining prices.

See: Bear Market

Wedge
Technical chart pattern where two converging lines connect a series of peaks and troughs to form a wedge. These converging lines move in the same direction. Rising wedges normally occur when there are interruptions of a falling price trend. Falling wedges normally occur when there are interruptions of price rallies.

See: Chartist; Technical Analysis

Western Account
A corporate underwriting agreement that syndicate members jointly sign with the issuer. However, each member's individual liability is limited to the specific number of shares or bonds that they individually underwrite--also called a "divided account".

See: Divided Account; Underwrite

W Formation
Technical chart pattern of a security's price that shows the price has hit a support level two times and is moving up--also called a "double bottom" formation. A double top is a reverse W-- the price has hit a resistance level and is headed downward.

See: Chartist; Double Bottom; Double Top; Resistance Level; Support Level; Technical Analysis

When Distributed (WD)
Conditional transactions on the secondary distribution of shares issued and outstanding. An example is a wholly owned subsidiary. The abbreviation "WD" is used in newspaper stock listings.

See: Issued And Outstanding; Secondary Distribution

When Issued (WI)
The abridged form of "When, as, and if issued" is a conditional transaction in a security authorized for issuance but has not been issued yet. The abbreviation "WI" is used in newspaper stock listings.

See: Issue

Whipsawed
In volatile price swings, the act of making losing trades as prices rise and fall. Traders are whipsawed if they buy just before prices fall and sell just before prices rise. Technicians also use this term to refer to misleading indicators in chart trends of a security or a market.

See: Chartist; Technical Analysis; Volatile

White Knight
A friendly acquirer who is sought by the target corporation of an unfriendly takeover.

See: Acquisition; Takeover

White's Rating
Short for "White's Tax-Exempt Bond Rating Service", it classifies municipal securities based upon market conditions (not credit considerations) to determine appropriate yields.

See: Municipal Bonds; Rating; Tax Exempt Security; Yield

Whole Life Insurance
Form of life insurance policy that protects the insured's beneficiary(s) in case the insured passes away. Unless the policy lapses or is canceled, it will remain in effect for the insured's lifetime. The policyholder pays a set yearly premium that does not increase as the person ages. The cash value portion of the policy accumulates tax-deferred, and may be borrowed against in a device called a policy loan. If the loan is not repaid, the death benefit is decreased by the loan amount. Whole life insurance is also known as "permanent" life or "straight" life insurance.

See: Beneficiary; Premium Income; Tax-Deferred; Universal Life Insurance; Variable Life Insurance

Wholesaler
1: Broker-dealer that trades with other broker-dealers instead of retail investors.

See: Broker; Dealer; Retail Investor

2: An investment banker who performs as an underwriter in a new issue or as a distributor in a security's secondary offering.

See: Investment Banker; New Issues; Underwriter

3: A mutual fund sponsor.

See: Mutual Fund

WI (When Issued)
The abridged form of "When, as, and if issued" is a conditional transaction in a security authorized for issuance but has not been issued yet. The abbreviation "WI" is used in newspaper stock listings.

See: Issue

Wide Opening
At the trading session's opening, an unusually large spread exists between a security's bid and asked prices.

See: Asked Price; Opening; Spread

Widow-And-Orphan Stock
A very safe stock that pays high dividends. The company usually has a noncyclical business and frequently has a low beta coefficient.

See: Alpha; Cyclical Stock; Dividend

Wire House
National or international brokerage firms whose branch offices are linked by communication networks. The term dates back to when only the largest firms had high speed communications. The networks rapidly disperse information and research about securities and markets. Through increased technology, regional brokers and small retail firms now have the same ability. However, the designation as a wire house is used only to refer to the largest brokerage firms.

See: Retail House

Withdrawal Plan
Open-end mutual fund program in which shareholders can receive fixed payments of income and/or capital gains on a monthly or quarterly basis.

See: Capital Gain; Mutual Fund; Open End Management Company

Withheld Orders
A sales violation that occurs when a broker fails to promptly enter a client's mutual fund order.

See: Mutual Fund

Withholding
Action by a broker-dealer whereby an allotment of securities in a public offering is retained for its own purposes. If the offering is a hot issue, this action may be a violation of the Rules of Fair Practice of the National Association of Securities Dealers (NASD).

See: Freeriding; Hot Issue; Public Offering; Rules of Fair Practice

Withholding Tax (W/Tax)
The Internal Revenue Service (IRS) requires financial institutions to report all client's social security numbers, interest and dividend payments and sale proceeds. This practice applies to all US citizens and resident aliens. Those clients who have not furnished a W-9 or W-8 form to the institution are subject to withholding tax--also known as "backup withholding".

With Warrants (WW)
A security that trades with warrants as apart of the issue. The abbreviation "WW" is used in newspaper stock listings.

See: Warrant