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Glossary of financial terms - Letter L

  • Last In, First Out (LIFO)

    Tags:  accounting valuation and pricing

    Last In, First Out is an accounting method for calculating the value of inventory in which the last items added to inventory are considered to be the first ones to be sold.

     


  • LBO

    Tags:  concept corporate finance

    See  


  • LEAPS

    Tags:  equity derivatives options typology

    Country:   United States of America

    See  


  • Legal Entity Identifier (LEI)

    Tags:  codes or standards organisations or institutions

    A Legal Entity Identifier is a 20-character alpha-numeric code that uniquely identifies legal entities that engage in financial transactions.

     


  • LEI

    Tags:  codes or standards economy

    See  


  • LEPO

    Tag:  options

    Country:   Australia

    See  


  • leverage

    Tags:  concept market transactions

    The control of a larger sum of money with a smaller amount. Leverage can be achieved with futures or options, for example.

     


  • leveraged buyout (LBO)

    Tags:  concept corporate finance financing

    A leveraged buyout is a form of company buyout in which the acquiring company buys the target company with a large amount of debt. The acquired company then pays off the debt over time using the cash flow generated by its business activity.

     


  • LGD

    Tags:  metric risk management

    See  


  • LIBID

    Tags:  interest rate markets reference rates

    Country:   United Kingdom

    See  


  • LIBOR

    Tags:  interest rate markets reference rates

    Country:   United Kingdom

    See  


  • LIBOR-in-arrears (LIA) swap

    Tags:  financial instruments interest rate derivatives

    A swap in which one of the legs is a fixed rate and the other is LIBOR-in-arrears (i.e. LIBOR set and paid at the end of each period, rather than set at the beginning and paid at the end of each period as with a normal swap).

     


  • LIFFE

    Tags:  financial markets regulated markets

    Country:   United Kingdom

    See  


  • LIFO

    Tags:  accounting valuation and pricing

    See  


  • light pool market

    Tags:  financial markets quoting and negotiation systems

    See  


  • linear bond (OLO)

    Tag:  bonds

    Name designing medium, long and very long term Belgian government bonds. French name: obligation linéaire

     


  • linear interpolation

    Tag:  financial mathematics

    Linear interpolation is a method used to determine the value of a point on a curve by calculating a weighted average between the values of two known points located on the left and the right. This method considers that the point to be calculated is located on a straight line which connects the two points.

     


  • liquidity

    Tags:  finance (general) financial markets

    The ability to quickly convert an investment to cash without suffering a noticeable loss in value.

     


  • liquidity risk

    Tags:  concept risk management

    Risk caused by uncertain liquidity. In the present context, liquidity can either mean a company or institution's availability of, or access to, cash in order to meet its financial obligations, or the convertibility into cash of assets it holds.

     


  • liquid market

    Tags:  financial markets typology

    A market which allows quick and efficient entry or exit at a price close to the last traded price. The ability to liquidate or establish a position quickly is due to a large number of traders willing to buy and sell.

     


  • local

    Tags:  financial organisations market participants

    See  


  • London Clearing House (LCH)

    Tags:  organisations or institutions transaction settlement

    Country:   United Kingdom

    The London Clearing House is a clearing house in the United Kingdom that serves major exchanges and platforms, as well as a range of OTC markets across multiple asset classes.

     


  • London InterBank Bid Rate (LIBID)

    Tags:  derivatives market participants status

    The London Interbank Bid Rate is the rate at which banks are willing to borrow funds from one another in the interbank market.

     


  • London Interbank Offered Rate (LIBOR)

    Tags:  indices interest rate markets

    LIBOR stands for a series of short term interest rate indexes which are administered by the Intercontinental Exchange and published by Thomson Reuters on a daily basis for five currencies and seven borrowing periods.

     


  • London International Financial Futures and Options Exchange (LIFFE)

    Tags:  financial markets regulated markets

    The London International Financial Futures and Options Exchange was an exchange for financial futures and options based in London. It has been taken over by the Intercontinental Exchange group in 2013 and is now called ICE Futures Europe.

     


  • London Stock Exchange (LSE)

    Tags:  financial markets regulated markets

    Founded in 1801, the London Stock Exchange is one of the largest stock exchanges in the world.

     


  • long

    Tags:  concept finance (general)

    Term used to described the fact that one has purchased a financial product or instrument, but has not taken any action to offset the position resulting from the purchase.

     


  • Long-term Equity Anticipation Security (LEAPS)

    Tags:  equity derivatives options typology

    Country:   United States of America

    LEAPS are American-style call or put options with longer lifespans than typical options, expiring between one and three years in the future.

     


  • long-the-basis

    Tags:  concept finance (general)

    A trader who owns the underlying and hedges his position with a short futures position is said to be long-the-basis. He profits from the basis becoming more positive.

     


  • long coupon

    Tags:  bonds characteristics

    Initial or final coupon period of a bond which has a duration that is longer than the other, regular coupon periods. This may be due to issuer constraints or preferences with regards to either the issue date, the maturity date or the coupon dates.

     


  • lookback option

    Tags:  options typology

    A lookback option is a financial option the value of which will depend on the minimum or the maximum price of its underlying attained during the option's lifetime. Lookback options can have either a fixed strike or a variable strike.

     


  • loss given default (LGD)

    Tags:  metric risk management

    Loss given default is the loss incurred by a lender if the borrower defaults, expressed as a percentage of the loan amount. Definition is the amount of loss incurred by a lender when a borrower defaults, expressed in percentage.

     


  • Low Exercise Price Option (LEPO)

    Tags:  equity derivatives financial instruments

    A Low Exercise Price Option is a type of European-style call option traded on the Australian Australian Stock Exchange with the peculiarity of having an exercise price of 0.01 AUD and a contract size of 100 shares.

     


  • LSE

    Tags:  financial markets regulated markets

    Country:   United Kingdom

    See  


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