Recap Daily Banking Concepts – January 2026

 

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Recap Daily Banking Concepts – January  2026

 

2301. Hot IPO

The term hot IPO refers to an initial public offering with significant demand. These IPOs are popular, drawing a tremendous amount of interest from investors and the media even before they hit the market.

 

2302. Profit Taking

Profit taking is selling a security to realize gains after its price has significantly increased.

 

2303. Backtesting

Backtesting is vital for traders and analysts as it assesses a trading strategy's potential by applying it to historical data.

 

2304. Angel Capital

Angel capital is capital invested in a start-up venture or small  business expansion by an angel investor. Angel investors are typically individuals, partnerships or investment groups who consciously seek higher rates of return than is available in more traditional investments. An angel investor typically seeks returns on investment of 20-25 percent or more per year.

 

2305. Hostile Bid

A hostile bid is a specific type of takeover bid that bidders present directly to the target firm's shareholders because management is not in favor of the deal. Bidders generally present their hostile bids through a tender offer.

2306. Discount Window

The discount window is a central bank lending facility meant to help commercial banks manage short-term liquidity needs. Banks that are unable to borrow from other banks in the money market may borrow directly from the central bank's discount window paying the discount rate.

 

2307. Cookie Jar Accounting

Cookie jar accounting or cookie jar reserves is an accounting practice in which a company takes a quantity of large reserves from an economically successful year and incurs them against losses from less successful years.

 

2308. Window Dressing

“Window dressing” is commonly used to refer to the way a pedestrian facing the window of a retail business is presented to make their goods look most appealing. However, when it is referenced by the finance world, the term means something slightly different. In finance, window dressing refers to the efforts taken to make the financial statements of a business look better before they are publicly released"

 

2309. Big bath accounting

Big bath accounting is an earnings management technique where a company intentionally takes a large, one-time charge against income to make current results appear worse, with the goal of improving future earnings. This is often done by writing down assets or recognizing unexpected liabilities in the current period, which reduces net income but leads to lower expenses and higher profits in subsequent periods. The primary goal of big bath accounting is to "clean the slate" for future performance.

 

2310. Bag Holder

A bag holder is an informal term used to describe an investor who holds a position in a security that decreases in value until it descends into worthlessness. In most cases, the bag holder stubbornly retains their holding for an extended period, during which time the value of the investment goes to zero.

 

2311. Banana republic

In economics, a banana republic is a country that's dependent on exporting a single product or commodity, and has an economy that's controlled by foreign corporations. The term is often used to describe countries in the tropics that are run despotically. The term "banana republic" was coined in 1904 by American author O. Henry. Characteristics of banana republic is Economic instability, Political instability, Social inequality, Exploitation of resources.

 

2312. White Knight

In economics, a white knight is a company or investor that buys a target company to prevent a hostile takeover. The white knight is a friendly defense strategy that's preferable to a hostile takeover by an unfriendly bidder, also known as a black knight.

 

2313. Acquisition Premiums

An acquisition premium is the difference between a company's estimated fair value and the price paid to acquire it during a merger or acquisition.

 

2314. Pure Discount Instrument

A pure discount instrument is a type of security that pays no income until maturity. It is also known as a zero-coupon bond (or simply zero-coupon) or a deep discount bond.

 

2315. Defined Contribution Plans

A defined contribution (DC) plan is a retirement savings plan where employees contribute a fixed amount or percentage of their pay that grows tax-deferred until retirement.

 

2316. Dividend Discount Model

The dividend discount model (DDM) is a valuation method that predicts a company's stock price based on the present value of its future dividend payments.

 

2317. Unicorn

The term unicorn refers to a privately held startup company with a value of over $1 billion.

 

2318. Position Trader

A position trader buys an investment for the long term in the expectation that it will appreciate in value. This type of trader is less concerned with short-term fluctuations in price and the news of the day unless they alter the trader's long term view of the position.

 

2319. Capital Employed

Capital employed measures the total amount of money that a company spent to achieve profitability.

 

2320. S&P 500 Index

The S&P 500 is a stock market index weighted by market capitalization that is made up of 500 of the largest public companies in the United States. 

 

2321. Hit The Bid

"Hit the bid" is a term used when a trader agrees to sell at the bid price, the highest price a buyer is willing to pay for a security or asset.

 

2322. Day Trading

Day trading is a fast-paced form of investing in which individuals buy and sell securities within the same day. The goal is to profit from short-term price movements in stocks, options, futures, currencies, and other assets.

 

2323. Exchange-Traded Fund (ETF)

An exchange-traded fund pools a group of securities into a fund and can be traded like an individual stock on an exchange.

 

2324. Unemployment Rate

The unemployment rate is the percentage of the labor force that does not have a job but is actively pursuing employment.

 

2325. Dividends

Dividends are a percentage of a company's earnings paid to its shareholders as their share of the profits.

 

2326. Raw Materials

Raw materials are basic materials used in the production or manufacturing of goods which can be either direct or indirect based on their role in the production process. 

 

2327. Private Equity

Private equity is an investment class where firms raise capital to acquire and manage private companies or take public companies private, with the goal of ultimately selling them for a profit. These investments typically require significant capital commitments over several years.

 

2328. Tokenized Equity

Tokenized equity refers to representing ownership in a company or asset through digital tokens on a blockchain.

 

2329. Mutual Fund

A mutual fund is a financial vehicle in which shareholders put their money together to invest in securities (e.g., stocks, bonds, money market instruments). A fund manager chooses the best investments, and every investor shares in the profits if the investments do well.

 

2330. Extended Trading

Extended trading is conducted by electronic exchanges either before or after regular trading hours. Volume is typically lower, presenting risks and opportunities.

 

2331. Compound Interest

Compound interest is interest on a loan or deposit added to the previous balance, which in turn increases the interest paid in the following period.

Sekhar Pariti

01-02-2026                                                                                +91 94406 41014