See: Margin

Unfunded Pension Liabilities
A retirement fund in which money is owed to it by an employer.

See: Qualified Pension Plan Or Trust

Uniform Gift To Minors Act (UGMA)
Law adopted by most US states, with few changes, that sets up rules for the distribution and administration of assets in the name of a child. The Act requires a custodian of the assets--usually one parent but may be an independent trustee. (It can only be one person.)

It is used in the securities industry as a qualifier to indicate accounts and securities purchased or sold under the provisions of the Act.

A gift to a minor is irrevocable. When a minor reachs majority, UGMA accounts become the child's property.

See: Custodian

Uniform Practice Code (UPC)
Rules and procedures established by the Financial Industry Regulatory Authority (FINRA) to regulate operational details of executing, clearing, and settling over the counter transactions in non-exempt securities. Also, within the 13 districts of the FINRA, the Uniform Practice Committees settle disputes at the local level and interpret the Uniform Practice Code.

See: Financial Industry Regulatory Authority; Over The Counter

Uniform Securities Agent State Law Examination
Test that is taken by all registered representative candidates in many US states--also known as "Blue Sky Examination". Before taking this exam, all registered representatives must pass the General Securities Representative Examination (Series 7).

See: Registered Representative

Unissued Stock
Shares of stock that are authorized in the corporate charter but not yet issued. Unissued shares are issued on the direction of the corporation's board of directors. However, shares needed for rights, warrants, convertible securities and unexercised employee stock options must be reserved and cannot be issued.

Unissued shares cannot pay dividends nor can it be voted. These shares are not the same as treasury stocks, which are issued shares but no longer outstanding.

See: Convertible Securities; Issued And Outstanding; New Issue; Options; Outstanding Stock; Right; Treasury Stock; Warrant

Unit
1: Number of shares, bonds, or commodities that is considered the normal unit of trading on an exchange.

See: Odd Lot; Round Lot; Unit Of Trading

2: More than one class of securities traded together as one security. A corporation, for example, might issue a security that consists of one common share and one warrant that sells as a unit.

See: Subscription Right; Subscription Warrant

Unit Investment Trust (UIT)
A trust, registered with the SEC under the Investment Company Act of 1940, in which a fixed portfolio of income-producing securities are purchased and held to maturity. This type of investment vehicle is commonly used with municipal bonds. Each unit usually costs $1,000 and is sold by brokers to investors for an average load of 4%. Investors receive an undivided interest of the portfolio's principal and income proportionate to the amount they invested. All unit investment trusts are redeemable securities and can be resold in the secondary market.

See: Investment Company; Investment Company Act Of 1940; Load; Municipal Bonds; Secondary Market; Unit Share Investment Trust

Unit of Trading
Number of shares, bonds, or commodities that is considered the normal unit of trading on an exchange. For stocks, it is usually a round lot (100 shares). For corporate bonds, it is usually $1,000 or $5,0000 par value. Commodities do not have a set unit--it varies depending upon the actual commodity.

See: Normal Trading Unit

Unit Share Investment Trust (USIT)
A unit investment trust that includes one unit of prime and one unit of score.

See: Unit Investment Trust

Universal Life Insurance
Type of life insurance that combines the low cost coverage of term life insurance with a tax-deferred savings account that invests in money-markets. Without incurring additional sales charges, this type of policy allows the holder to increase or decrease coverage or to shift a specific amount of premiums into the savings account.

See: Money Market; Tax Deferred; Variable Life Insurance; Whole Life Insurance

Unleveraged Program
Limited partnership who borrows 50% or less of the purchase price to finance the purchase of property. Investors who wish to maximize income usually prefer unleveraged partnerships because interest expense and other income deductions are minimal.

See: Limited Partnership

Unlimited Tax Bond
Municipal bond backed by the pledge to levy taxes until the bond is repaid.

See: Municipal Bond

Unlisted Stock
A security not listed on a stock exchange and is traded in the over the counter market.

See: Over The Counter; Stock Exchange

Unlisted Trading
Trading securities on a particular exchange as a service to its members even though the security is not listed on that exchange. Exchanges that want to trade unlisted securities must file an application with the SEC and make required information accessible to investors. The NYSE does not permit unlisted trading.

Unloading
Selling a security when its price is falling to prevent further losses.

See: Dumping; Profit Taking; Selling Off

Unpaid Dividend
Dividend declared by a corporation's board of directors that has not been paid yet. It will remain unpaid until the dividend's payment date is reached.

See: Dividend; Payment Date

Unrealized Profit (Or Loss)
Profit or loss that is not realized--also known as a "paper profit or loss". It does not become a realized profit or loss until the security in which there is a gain or loss is actually sold.

See: Paper Profit (Loss); Realized Profit (Loss)

Unregistered Stock

See: Letter Security

Unsecured Debt
Debt that is not backed by pledged collateral.

See: Collateral; Debt; Pledge

UPC (Uniform Practice Code)
Rules and procedures established by the Financial Industry Regulatory Authority (FINRA) to regulate operational details of executing, clearing, and settling over the counter transactions in non-exempt securities. Also, within the 13 districts of the FINRA, the Uniform Practice Committees settle disputes at the local level and interpret the Uniform Practice Code.

See: Financial Industry Regulatory Authority; Over The Counter

Upset Price
Minimum price in an auction that a seller will accept bids.

Upside Potential
The amount that an analyst or an investor expects a security to move upward. This assessment may be derived from either technical analysis or fundamental analysis.

See: Fundamental Analysis; Technical Analysis

Upstairs Market
Brokerage transactions executed at the broker-dealer firm without using an exchange. SEC and exchange rules exist to ensure that these types of trades are not executed at less favorable prices then the customer could receive in the prevailing general market.

Uptick
Security transaction executed at a price higher than the preceding transaction in the same security--also called a "plus tick". For each security in which its last price is higher than the preceding transaction, a plus sign is displayed next to its price at the trading post on the floor of the NYSE. Short sales can only be executed on up-ticks or zero plus ticks.

See: Minus Tick; Plus; Plus Tick; Selling Short; Tick; Uptick Rule; Zero Plus Tick

Uptick Rule
Rule established by the Securities and Exchange Commission (SEC) that selling short can only be done on an up-tick or a zero plus tick.

See: Selling Short; Uptick; Zero Plus Tick

Up-Trend
An upward movement of a specific security or the market as a whole.

See: BullMarket; Trendline

US Government Securities
Government obligations owed and issued by the US government. They are as distinguished from government sponsored agency issues. Examples are Treasury bills, notes, and bonds and savings bonds.

See: Government Agency Securities; Government Obligations; Treasuries

USIT (Unit Share Investment Trust)
A unit investment trust that includes one unit of prime and one unit of score.

See: Unit Investment Trust

Utility Revenue Bond
Municipal bonds that are issued to finance construction of public utility services such as water and sewer systems. Once the projects are in operation, its revenues are used to repay the bonds.

See: Debt Service; Municipal Bond

UW (Underwriter)
In regard to securities, investment bankers who handle the offering of a new issue of securities. They buy all the securities from the issuer and distribute them to investors. They make a profit on the underwriting spread. The investment banker may be acting alone or as a member of an underwriting group or syndicate.

As the word relates to insurance, a company that takes on the cost risk of death, fire, theft, illness, etc., in exchange for payments, called premiums.