Warrant: An options contract is often sold with another security. For instance, corporate bonds may be sold with warrants to buy the common stock of that corporation. Warrants are generally detachable.
Wall Street: Popular name for the New York Stock Exchange, which is located at the corner of Board Street and Wall Street.
Wash Sale: Buying and selling of a share simultaneously or within a short period of time by an individual or a group to generate artificial market activity and a rise in the shares which the manipulators can then cash in on.
Wedge: Technical analysis chart pattern like a Triangle, but with a slight difference. In a triangle, one line rises while the other falls, whereas in a wedge both the lines move in the same direction, i.e., both rise or fall until the distance between the peaks and the through closes. Whereas a triangle indicates a sharp breakout, a wedge indicates a temporary interruption in the rising or falling trend.
Weighted Average: Arithmetic mean that takes into account the importance of each item in making an average. For example, the prices of 32 scripts of an index will give one average, whereas the total sum at which each of the different scripts has sold in different quantities will give quite a different average.
W-Formation: Technical Analysis chart pattern, forming a ‘W’ showing that a share’s price has hit the support level (two bottoms of W) twice and is now likely to move up.
W-shaped Recovery: Describes the change of an economic indicator, such as unemployment or GDP, during a recession when the indicator experiences a sharp decline, followed by a rally back to original levels, and then a fall in value followed by another sharp rise.
Weighted Average Cost of Capital (WACC): Calculation of a firm’s overall cost of capital that weights each source of finance proportionately (i.e. equity and debt).
Weighted Average Return: Rate of return that is weighted to take into account the relative sizes of the various assets or funds which make up the sample.
Wind-up: Process by which a company ceases to operate as a going concern, and its assets and property are liquidated in order to repay creditors.
Withholding Tax: Tax levied by overseas governments on dividends paid abroad. This may not be reclaimable, even by tax-exempt investors.
Window Dressing: A maneuver often engaged in by companies, banks, mutual funds, etc., at the end of the accounting period in order to impress stockholders 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.
Whipsaw: A situation that occurs when the technique that a trader is using produces many buy and sell signals in a small price range that do not follow through in the predicted direction. Whipsaw trades cause the trader to lose money.
Whipsawed: To be badly mauled by volatile price movements when someone makes losing trades, i.e,., buys just before prices fall and sell just before price rice.
White Knight (U.S): A term used in the hostile takeover context, when a company, which cannot prevent a takeover looks for a friendly rescuer who might outbid the Black Knight and acquire the company on amicable terms.
Working Capital: Technically it is the difference between Current Assets and Liabilities. Sometimes called circulating capital.
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.
World Trade Organisation: Supranational body established to encourage and supervise international trade between member nations.
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.
Write off: Investment from which there is no likelihood of any recovery of the amount investedStock Market Reference (A-Z)