Day order - An order to buy or sell that, if not executed, expires at the end of trading day on which it was entered.

Daily Benefit - The insurance benefit amount (in dollars) that a person selects as the basis for their long-term care insurance. However, the daily benefit may not be the actual amount paid for each day an insured person is eligible for a benefit. There are three different methods of computing benefits; but, each insurance policy will use only one of them.

1. Expense-Incurred Method - After you qualify for benefits, the insurance will pay the lower of: (1) the expenses you incurred for eligible long-term care services, or (2) the dollar limit of your policy. Most policies bought today pay benefits using the expense-incurred method.

Some expense-incurred policies protect a covered person from the situation where expenses exceed the daily limit on some days and are less than the daily limit on other days, by setting up a weekly pool of benefits. That is, the daily benefit is multiplied by 7 to establish a weekly pool of money that can be used to pay all eligible expenses until the pool is exhausted for that week. Under the pool of money approach, any unspent money is often added to the end of the policy to extent the period of coverage. (A few policies use a monthly pool of money.)

2. Indemnity Method - This method is not based on the specific service received or on the actual expenses incurred. After you qualify for benefits and receive eligible long-term care services, the insurance company will pay a fixed amount directly to you, up to the limit of the policy. The fixed amount is pre-determined by your insurance policy.

3. Disability Method - After you qualify for benefits, you will receive your full daily benefit even if you don't receive any specific long-term care services. These benefits are yours to spend as you wish.

Dealer - An individual or firm in the securities business who buys and sells stocks and bonds as a principal rather than as an agent. The dealer's profit or loss is the difference between the price paid and the price received for the same security. The dealer's confirmation must disclose to the customer that the principal has been acted upon. The same individual or firm may function, at different times, either as a broker or dealer.

Debenture - A promissory note backed by the general credit of a company and usually not secured by a mortgage or lien on any specific property.

Debit balance - In a customer's margin account, that portion of the purchase price of stock, bonds or commodities that is covered by credit extended by the broker to the margin customer.

Deductible - The amount you must pay, usually every year, before your health insurance or Medicare begins to pay benefits.

Defined Benefit Pension Plan - A traditional pension plan which promises to pay a specific monthly amount to each participant when they retire. Benefit amounts are typically based on each employee's earnings history and length of employment while a plan participant.

Defined Contribution Pension Plan - A pension plan whose sponsor makes specified contributions into the plan on behalf of qualifying participants. Contributions cannot be related to a company's profits or lack thereof.

Delayed opening - The postponement of trading of an issue on a stock exchange beyond the normal opening of a day's trading because of market conditions that have been judged by exchange officials to warrant such a delay. Reasons for the delay might be an influx of either buy or sell orders, an imbalance of buyers and sellers, or pending corporate news that requires time for dissemination.

Depletion accounting - Natural resources, such as metals, oil, gas and timber, that conceivably can be reduced to zero over the years, present a special problem in capital management. Depletion is an accounting practice consisting of charges against earnings based upon the amount of the asset taken out of the total reserves in the period for which accounting is made. A bookkeeping entry, it does not represent any cash outlay nor are any funds earmarked for the purpose.

Depository Trust Company (DTC) - A central securities certificate depository through which members effect security deliveries between each other via computerized bookkeeping entries thereby reducing the physical movement of stock certificates.

Depreciation - Normally, charges against earnings to write off the cost, less salvage value, of an asset over its estimated useful life. It is a bookkeeping entry and does not represent any cash outlay nor are any funds earmarked for the purpose.

Director - Person elected by shareholders to serve on the board of directors. The directors appoint the president, vice presidents, and all other operating officers. Directors decide, among other matters, if and when dividends shall be paid. 

Disclosable Event - A corporate event that is disclosed to shareholders. Securites law states that all material information be disclosed. When this occurs it is said to be a disclosable event. Non-disclosable events - in which material information is withheld from shareholders - go against securities law as enforced by the Securities and Exchange Commission (SEC).

Discount - The amount by which a preferred stock or bond may sell below its par value. Also used as a verb to mean "takes into account" as the price of the stock has discounted the expected dividend cut. 

Discretionary account - An account in which the customer gives the broker or someone else discretion to buy and sell securities or commodities, including selection, timing, amount, and price to be paid or received.

Diversification - Spreading investments among different types of securities and various companies in different fields.

Dividend - The payment designated by the board of directors to be distributed pro rata among the shares outstanding. On preferred shares, it is generally a fixed amount. On common shares, the dividend varies with the fortunes of the company and the amount of cash on hand, and may be omitted if business is poor or the directors determine to withhold earnings to invest in plant and equipment. Sometimes a company will pay a dividend out of past earnings even if it is not currently operating at a profit.

Dividend Arbitrage - An options trading strategy that involves purchasing put options and an equivalent amount of underlying stock before the ex-dividend date and then exercising the put after collecting the dividend. When used on a security with low volatility (causing lower options premiums) and a high dividend, dividend arbitrage can create profits while assuming very low to no risk.

Dividend Reinvestment Plan  (DRIP) - A plan offered by a corporation that allows investors to reinvest their cash dividends by purchasing additional shares or fractional shares on the dividend payment date.

A DRIP is an excellent way to increase the value of your investment. Most DRIPs allow you to buy shares commission free and at a significant discount to the current share price. Most DRIPS don't allow reinvestments much lower than $10.

This term is sometimes abbreviated as "DRP".

Dollar-cost-averaging - A system of buying securities at regular intervals with a fixed dollar amount. Under this system investors buy by the dollars' worth rather than by the number of shares. If each investment is of the same number of dollars, payments buy more shares when the price is low and fewer when it rises. Thus temporary downswings in price benefit investors if they continue periodic purchases in both good and bad times, and the price at which the shares are sold is more than their average cost. Dollar-cost-averaging does not assure a profit and does not protect against loss in declining markets. Since dollar-cost-averaging involves continuous investment in securities regardless of fluctuating price levels of such securities, investors should consider their financial ability to continue purchases through periods of low price levels.

Donor - A person or organization who gives a gift.

Down tick - A stock market transaction (or sometimes, a quote) at a price higher than the preceding one for the same security. also called plus tick. opposite of downtick.

Dow theory - A theory of market analysis based upon the performance of the Dow Jones Industrial Average and transportation stock price averages. The theory says that the market is in a basic upward trend if one of these averages advances above a previous important high, accompanied or followed by a similar advance in the other. When both averages dip below previous important lows, this is regarded as confirmation of a downward trend. The Dow Jones is one type of market index.

DRIP - See (Dividend Reinvestment Plan)