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Finance GlossaryAcceptance Credit
Acceptance Credit
Definition of Acceptance Credit
Acceptance Credit is a way for buyers to authorize fund transfers to sellers at a specific date when various terms & conditions are met.
This is done through a letter of credit which is a creditworthy bank’s promise that the payment will be made.
There are two types of Acceptance Credit:
This is done through a letter of credit which is a creditworthy bank’s promise that the payment will be made.
There are two types of Acceptance Credit:
- Confirmed: Bank guarantees payment in case the buyer defaults
- Unconfirmed: Bank does not guarantee payment in case the buyer defaults
Related Terms
Broker
A broker is an intermediary between a securities exchange and investors. Only registered entities can place trades on a securities exchange. These members can be individuals or firms known as stockbrokers.
That’s why investors must go through a broker when they want to trade or invest in stocks, ETFs, futures, options, and others.
That’s why investors must go through a broker when they want to trade or invest in stocks, ETFs, futures, options, and others.
Bounce Trading
Bounce trading refers to buying a position in security when its price falls to a particular support level with the anticipation that it will “bounce” back to a certain price level. Technical analysis is the bedrock of bounce trading but various patterns and strategies can be used to achieve the desired goal.
Advance/Decline Line
An Advance/Decline Line can help you plot the daily difference between the number of advancing and declining stocks.
As a result, the Advance/Decline Line is a technical indicator used to gauge market sentiment, price trends, and trend reversals.
Here’s how the Advance/Decline Line is calculated:
As a result, the Advance/Decline Line is a technical indicator used to gauge market sentiment, price trends, and trend reversals.
Here’s how the Advance/Decline Line is calculated:
- Calculate the number of stocks that finished in the red.
- Calculate the number of stocks that finished in the green.
- Subtract #1 from #2 to find out the net movement aka Net Advance.
- Repeat #1, #2, and #3 the next day and add the values for Net Advance.
- Add both the previous day’s and the present day’s Net Advance. Repeat for future calculations.
Deferred Tax Asset
A deferred tax asset is an item on a company’s financial statement that can be used to get tax relief, generally in the event of overpaying taxes or net losses that are carried forward.
Companies tend to deduct these overpayments or losses for accounting purposes and to reduce their overall taxable income. Common examples of deferred tax assets include:
Companies tend to deduct these overpayments or losses for accounting purposes and to reduce their overall taxable income. Common examples of deferred tax assets include:
- Depreciation of fixed assets
- Net financial loss
- Bad debt
Futures Contract
A futures contract is a derivative instrument that is legal agreement between two parties for the mandatory purchase or sale of an underlying asset at a pre-agreed price and date.
Every futures contract contains a standard lot size on top of the agreed price and date as they are a standardized derivative traded on a stock exchange, most commonly on NSE and BSE.
The price of a futures contract is known to vary from the spot price of the same underlying asset due to factors like the cost of carry, interest rates, and more.
Every futures contract contains a standard lot size on top of the agreed price and date as they are a standardized derivative traded on a stock exchange, most commonly on NSE and BSE.
The price of a futures contract is known to vary from the spot price of the same underlying asset due to factors like the cost of carry, interest rates, and more.
Liabilities
Liabilities are debt that a company owes to individuals or financial institutions in the form of bonds, debentures, salary, tax, and others.Liabilities play an important role in the balance sheet of a company as it signals competence to existing and prospective stakeholders.
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