Category: Financial Terms

Due From Account: Definition and Purpose A due from account is an asset account in the general ledger that tracks money owed to a company but held at another entity. It records receivables resulting from deposits, intercompany transfers, or funds temporarily held in other firms’ accounts. Separating incoming (due from) and outgoing (due to) balances…

Dual Listing: What It Is and How It Works A dual listing (also called interlisting or cross-listing) occurs when a company lists its shares on two or more stock exchanges. Companies pursue dual listings to broaden their investor base, increase liquidity, and access additional capital markets. Dual listings are common among non‑U.S. companies seeking exposure…

Dual Income, No Kids (DINK): Definition, Types, and Financial Implications What is DINK? “Dual income, no kids” (DINK) describes a household in which two adults earn income and there are no dependent children. Because they do not bear child-rearing expenses, DINK households typically have more disposable income and greater flexibility to save, invest, or spend…

Dual-Class Stock: Definition, Structure, and Controversy What is a dual-class stock? A dual-class stock structure exists when a company issues two (or more) classes of common shares that carry different economic and/or voting rights. Typically one class is offered to the public with limited or no voting power, while another class—held by founders, executives, and…

Dry Powder Dry powder refers to highly liquid, cash-like marketable securities—cash reserves and short-term investments—that investors, companies, and venture capitalists hold to cover obligations or seize opportunities quickly. Maintaining dry powder preserves financial flexibility and readiness for unexpected needs or timely investments. Key takeaways Dry powder = cash or liquid, marketable securities that can be…

Drawing Account A drawing account records money or other assets an owner withdraws from a business for personal use. It’s commonly used in unincorporated entities such as sole proprietorships, partnerships, and many single‑member LLCs. Withdrawals by owners of corporations are typically handled differently (e.g., salary or dividends). Key points Tracks owner withdrawals of cash or…

What Is a Drawee? A drawee is the party instructed to pay money on behalf of another. In banking and finance, the drawee receives a payment order—such as a check, bill of exchange, or money order—and is responsible for transferring funds from the payer’s account (the drawer) to the person presenting the instrument (the payee)….

Drawdown What is a drawdown? A drawdown is the decline in the value of an investment from a peak to the subsequent trough, expressed as a percentage. It measures downside volatility and shows how much an investment has fallen before recovering to its prior high (if it does). How to calculate drawdown Formula: Peak-to-trough drawdown…

Dragonfly Doji Candlestick Key takeaways A Dragonfly Doji forms when the open, high, and close are (nearly) the same and the low is significantly lower, producing a “T” shape. After a downtrend it can signal a bullish reversal; after an uptrend it can warn of a bearish reversal. Traders typically wait for a confirming candle…

Drag-Along Rights A drag-along right is a contractual provision that allows a majority shareholder (or a group controlling a majority) to require minority shareholders to join in the sale of a company. The majority must offer the minority the same price, terms, and conditions as other sellers. Key takeaways Drag-along rights enable a buyer to…

Downtrend A downtrend is a sustained decline in the price or value of a security, commodity, or market. It reflects a shift in investor sentiment: more participants want to sell than buy, pushing prices lower over time. Key characteristics Lower peaks and lower troughs (swing highs and swing lows) appear sequentially. Price movements may include…

Downstream: Definition, Types, and Examples of Operations Downstream operations are the activities that convert crude oil and natural gas into finished products and deliver them to consumers. This includes refining, marketing, distribution, and retail sales of petroleum products such as gasoline, diesel, heating oil, and a wide range of petrochemicals. Key takeaways Downstream covers refining,…

Downside Risk Downside risk is the potential loss in value of an investment when market or economic conditions drive its price lower. Unlike general risk, which includes both gains and losses, downside risk focuses solely on negative outcomes and the magnitude of potential losses. Key takeaways Downside risk estimates how much an investor could lose…

Down Round: Overview, Implications, and Alternatives A down round occurs when a private company raises additional capital by selling shares at a lower price per share than in its previous financing round. It signals a lower company valuation compared with the prior round and is typically a sign that investors require a discount to compensate…

Down Payment What a down payment is A down payment is an upfront sum a buyer pays when purchasing a high-cost item—most commonly a home or car. It is expressed as a percentage of the purchase price; the lender finances the remainder. Making a larger down payment lowers the amount you borrow, reduces interest paid…

Dow Theory Dow Theory is an early form of technical analysis that interprets market direction by comparing movements in broad market averages. It holds that trends in major indices—originally the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Average (DJTA)—reflect underlying business conditions and can be used to confirm market trends. Key points…

Dow Jones Industrial Average (DJIA) Key takeaways The DJIA tracks 30 large, established U.S. companies (the “Dow 30”) and is often used as a quick gauge of U.S. market sentiment. It is a price-weighted index: stocks with higher share prices have greater influence regardless of market capitalization. The index is maintained by a committee and…

Credit Default Swap Index (CDX) — formerly Dow Jones CDX The Credit Default Swap Index (CDX) is a tradable benchmark that bundles many single-name credit default swaps (CDSs) into a single index to measure and trade credit risk for North American and emerging‑market issuers. Launched in the early 2000s, the CDX provides a standardized, liquid…

Dow 30 (Dow Jones Industrial Average) Key takeaways * The Dow 30, formally the Dow Jones Industrial Average (DJIA), tracks 30 large, well-established U.S. companies and is commonly called “the Dow.” * It is price-weighted: each component’s weight depends on its share price rather than market capitalization. * The index is widely used as a…

What Is a Dove? A dove is a monetary policymaker or advisor who prioritizes economic growth and employment over strict inflation control. Doves favor expansionary monetary policies—typically lower interest rates and sometimes quantitative easing—to boost borrowing, spending, and job creation. Key Takeaways * Doves emphasize low interest rates to support employment and economic growth. *…

Double Top Pattern: Key Insights and Trading Strategies A double top is a bearish technical-reversal pattern that signals a potential shift from an uptrend to a downtrend. It forms when price makes two similar peaks at a resistance level, separated by a trough, and is confirmed when price breaks below the support level (the “neckline”)…

What is double taxation? Double taxation occurs when the same income is taxed more than once. The two most common forms are: – Corporate–personal double taxation: corporate profits are taxed at the company level and again when distributed to shareholders as dividends. – International or interjurisdictional double taxation: the same income is taxed by two…

Double-Spending in Blockchains and Cryptocurrencies Double-spending is the act of using the same digital token or cryptocurrency unit more than once. In distributed ledgers and blockchains, successful double-spending undermines trust by allowing an attacker to reverse or alter transactions so that value can be reclaimed and spent again. How double-spending works Digital tokens are entries…

Double Irish With a Dutch Sandwich The “double Irish with a Dutch sandwich” is a multinational tax-planning arrangement used by some large corporations to shift profits from higher-tax jurisdictions to low- or no-tax jurisdictions. It combines two Irish entities and a Dutch intermediary to route royalties and other profit streams to a tax haven, substantially…

Double Exponential Moving Average (DEMA) What is DEMA? The Double Exponential Moving Average (DEMA) is a moving-average variation designed to reduce the lag inherent in traditional moving averages. It reacts faster to recent price changes while still smoothing price action to filter noise, making it useful for traders who want earlier trend signals. Formula DEMA…

Double-Entry Accounting Key takeaways * Double-entry accounting records every transaction in two accounts so that debits and credits always balance. * It enforces the accounting equation: Assets = Liabilities + Equity. * Debits and credits have opposite effects depending on the account type; the sum of debits must equal the sum of credits. * Double-entry…

Double-Declining Balance (DDB) Depreciation Method The double-declining balance (DDB) method is an accelerated depreciation technique that allocates larger expense amounts to the early years of an asset’s useful life and smaller amounts later. It applies a constant rate — twice the straight-line rate — to the declining book value each period. Companies use DDB for…

Double Bottom (Technical Analysis) A double bottom is a chart pattern that signals a potential reversal from a downtrend to an uptrend. It looks like a “W”: price makes a low, rebounds, returns to a similar low, then rebounds again. When validated, it indicates a significant support level has held and buying pressure may be…

Understanding the Dotcom Bubble The dotcom bubble was a late-1990s speculative surge in technology and Internet-related stocks that ended in a dramatic collapse around 2000–2002. Fueled by easy capital, exuberant expectations for Internet businesses, and a rush of IPOs, valuations detached from profits. When funding dried up, many companies failed and stock markets plunged, inflicting…

Dotcom — Definition, How It Works, History, and Key Examples A dotcom is a company whose core business is conducted online and is commonly identified by the “.com” domain in its web address. The term became widely used during the internet boom of the 1990s to describe businesses built around web-based products or services. Key…

Dormant Account: Definition, Process, and How to Reclaim Funds A dormant account is a financial account that shows no owner-initiated activity for a prolonged period. When an account becomes dormant, the financial institution may be required by state law to transfer the funds to the state as unclaimed property. The state holds the assets in…

Donchian Channels: Definition, Calculation, and Trading Uses What are Donchian Channels? Donchian Channels are a technical analysis tool that plot the highest high and lowest low of a security over a specified number of periods. They create an upper band, a lower band, and a center line (the midpoint of the two). Traders use them…

Domicile: Legal Definition, Types, and How Taxation Works Key takeaways Domicile is your legal, permanent home — the single place you intend to remain indefinitely. You can have many residences (places you live temporarily) but only one domicile. Domicile determines legal jurisdiction for taxes, probate, voting, vehicle registration, and certain benefits. Changing domicile requires both…

Domestic Relations Order (DRO): Meaning and Rules What is a DRO? A Domestic Relations Order (DRO) is a court order that assigns a spouse, former spouse, or dependent (an “alternate payee”) the right to receive all or part of an employee’s retirement-plan benefits in the event of divorce or legal separation. A DRO itself may…

Domestic Corporation What it is A domestic corporation is a company that is incorporated under and governed by the laws of its home state or country. It is considered “domestic” where it was formed and “foreign” in any other jurisdiction where it operates but was not incorporated. Example: A corporation incorporated in Delaware is a…