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Immediate-or-cancel Order (IOC):

A type of option order that gives the trading floor an opportunity to partially or totally execute an order with any remaining balance immediately cancelled.

Implied Volatility:

The volatility that produces the "best fit" for all underlying option prices on that underlying stock. Implied volatility is derived by taking actual market prices of options and working backwards in a theoretical option-pricing model to find the assumed volatility.

Imputed Interest:

Interest which is not actually paid to bond holders but which the IRS may tax anyway. Common with zero coupon bond interest. See also INTEREST; BOND.

Income Before Taxes:

Numerical term on an income statement which is the sum of all sales and profits before the subtraction of taxes. It shows how much profit a company would have made without taxes.

Income Dividend:

Pay-out to mutual fund shareholders of interest, dividends, and other income. Investors may withdraw the money or re-invest in additional shares of the fund.

Index Option:

An option whose underlying asset is an index. Generally, index options are cash-settled.

Index:

A compilation of numerous stocks and their prices into a single number. E.g., the S&P 500® Index.

Index Fund:

A mutual fund whose portfolio matches that of a broad-based index such as Standard and Poor's 500 Index, and whose performance therefore mirrors the market as a whole.

Indexing:

Constructing a portfolio to match the performance of a broad-based index, such as the S&P 500®. Individuals can do this by purchasing shares in an index mutual fund.

Individual Retirement Account (IRA):

A personal, tax-deferred, retirement account in which an employed person can contribute a maximum amount per year. There are specific rules concerning level of participation and eligibility for an IRA and whether an employee's contributions are tax-deductible. Consult a financial consultant or tax advisor for more details.

Inflation (CPI):

The rise in price of goods and services, or Consumer Price Index (CPI), when too much money chases too few goods on the market. Moderate inflation is a result of economic growth. Hyperinflation (rising at rates of 100% or more annually) causes people to lose confidence in their economy and put their money in hard assets such as gold and real estate.

Inflation Rate:

The annual percentage change in the price of goods and services. At the consumer level, it is the Consumer Price Index (CPI) and at the wholesale level it is the Producer Price Index (PPI).

Initial Public Offering (IPO):

A company's first sale of stock to the public. Securities offered in an IPO are often, but not always, those of young, small companies seeking outside equity capital and a public market for their stock. Investors purchasing stock in IPOs generally must be prepared to accept very large risks for the possibility of gains. IPOs by investment companies (closed-end funds) usually contain underwriting fees that represent a load to buyers.

Inside Information:

Relevant or "material" information about a company that has not yet been made public. It is illegal for holders of this information to make trades based on it or, generally, while in possession of it..

Insider:

A person with nonpublic information about a corporation. Directors, officers and stockholders owning more than 10% of any one class of stock are usually considered insiders, but any employee in possession of inside information may be an insider for purposes of the insider trading laws.

Institutions Holding:

The percentage of outstanding shares held by institutions for investment purposes. Includes charitable trusts, pension funds, mutual funds, brokerage firms, and banks.

Institutional Investor:

Large money managers such as banks, pension funds, mutual funds, and insurance companies.

Interest:

Charge levied for the privilege of borrowing money and income received for lending money.

Interest rate risk:

Risk that a change in the interest rates will negatively affect the value of an investor's holdings, generally associated with bonds but applicable to all investments.

Intermediate Government Bonds:

U.S. government debt instruments having a maturity of between 3 and 10 years.

International Equities Funds:

Mutual funds consisting of stocks purchased from companies based in countries other than the United States. International equities can also expose investors to foreign currency risk.

Inventory/Inventories:

For companies, raw materials, items available for sale or in the process of being made ready for sale. They can be individually valued by several different means, including cost or current market value, and collectively by first-in-first-out (FIFO), last-in-first-out (LIFO) or other techniques. The lower value alternatives are usually used to preclude overstating earnings and assets. For brokerage firms, securities bought and held by a broker or dealer for resale.

In-the-money Option:

A call option is in the money if the price of the underlying stock is above the strike price. A put option is in the money if the price of the underlying stock is below the strike price.

Intrinsic value:

The in-the-money portion of an option's price. See also IN-THE-MONEY OPTION above.

Investment:

The use of money to create more money through an appreciating or income-producing asset. See also HOLDINGS.

Investment Adviser:

The individual or firm that is responsible for managing a portfolio or mutual fund.

IRA/Keogh Accounts:

Special savings and investment accounts for retirement purposes with taxes deferred until money is withdrawn.

Iron Butterfly:

An option strategy with limited risk and limited profit potential that involves both a long (or short) straddle, and a short (or long) combination.

Issued Stock:

Stock sold to the public.

Issuer:

A legal entity, such as a corporation, municipality, foreign or domestic government, and investment trust, that issues or proposes to issue its securities for sale.