Back to Back Credit - A documentary credit (counter) taken out by a seller (importer) to allow purchase of goods required to meet a sale covered under original (head) credit.

Back-Propagation Network - A feedforward multilayered neural network that is a commonly used neural network paradigm.

Back Testing - A strategy is tested or optimized on historical data and then the strategy is applied to new data to see if the results are consistent.

Balanced Mutual Fund - A mutual fund that seeks a return that is a combination of capital appreciation and current income, generally by building a portfolio of bonds, preferred stocks and common stocks.

Bank Guarantee - Contract between a bank as guarantor and a beneficiary in which the bank commits itself to pay a certain sum under certain, specified conditions.

Bank Investment Contracts (BIC) - A negotiated-term deposit issued by a commercial bank.

Bank to Bank Payment - A transfer of funds (airmail or cable) between remitter and beneficiary via the banking system.

Banker's Acceptance - A bill of exchange accepted by a bank usually for the purpose of financing a sale of goods to or by the bank’s customer.

Bar Chart - Used to plot price movements using vertical bars indicating price ranges.

Barter - The direct exchange of goods and/or services for other goods and/or services without the use of money and without the involvement of a third party.

Basis Points - The measure of yields on bonds and notes; one basis point equals 0.01% of yield.

Basket of Trades - Large transactions made up of a number of different stocks.

Bayes Decision Rules - A rule that states the strategy chosen from those available is that for which the expected value of payoff is the greatest.

Berne Union - International Union of Credit and Investment Insurers.

Beta (Coefficient) - A measure of the market/nondiversifiable risk associated with any given security in the market. A ratio of an individual's stock historical returns to the historical returns of the stock market. If a stock increased in value by 12% while the market increased by 10%, the stock's beta would be 1.2.

Bias - The difference between the expected value of an estimator and the actual value to be estimated.

Bid (Buying) Rate - Exchange rate at which dealers are prepared to buy foreign exchange in the market from other dealers, and at which potential sellers are therefore able to sell foreign exchange to those dealers.

Bid and Ask - Highest price and lowest price that an investor will pay for a tradable.

Bid/Tender Bond - Provides an assurance of the intention of the party submitting a tender (i.e.the principal) to sign a contract if their tender is accepted. Usually takes the form of a bank guarantee.

Bill of Exchange - A negotiable instrument that represents an unconditional demand for payment. Together with the Bill of Lading it forms the basis for the documentary collection procedures and together with the exporter’s commercial invoice it can be used to charge the importer for the goods*.
Defined by the Bill of Exchange Act as: ‘An unconditional order in writing, addressed by one person to another, signed by the person giving it requiring the person to whom it is addressed to pay on demand, or at a fixed or determinable future time, a sum certain in money to or to the order of a specified person, or to a bearer’. A bill is signed by a drawer and addressed to a drawee, who becomes the acceptor by writing their name across the face of the bill. The person to whom the bill is payable is referred to as the payee.

Bimodal Distribution - In which observations are displayed as having two distinct peaks.

Black Box - A proprietary, computerized trading system whose rules are not disclosed or readily accessible.

Black-Scholes Option Pricing Model - A model developed to estimate the market value of option contracts.

Blank Endorsement - An endorsement in blank specifies no endorsee and a bill so endorsed becomes payable to bearer and may be negotiated by delivery.

Block Trades - Large transactions of a particular stock sold as a unit.

Bond Warrant - The document of title to goods being held in bond storage.

Bonds - A long-term debt security with a stated interest rate and fixed due dates, issued by a corporation or a government, when interest and principal must be paid. There are many variations.

Bracketing - A trading range market or a price region that is non-trending.

Broker's Deck - Orders physically held by the floor broker in the trading pit.

Broker-Dealer - A firm that handles transactions for its customers and also purchases securities for its own account, selling them to customers.

Business Day and Non-Business Day - Business day means any date that is not a non-business day.
Non-business day means any Saturday or Sunday or any bank holiday (not being a part holiday) within the meaning of ‘The Banking Act 1908’ and includes in respect of any bank premises every day on which those premises are not opened for business.

Buy and Hold - The acquisition of a tradable for the long term rather than a quick turnover.

Buy-Back (Compensation) - A form of countertrade under which exporters of, e.g. heavy equipment, technology, or plant facilities agree to purchase a certain percentage of the output of the new facility once it is in production. See also ‘Countertrade’.