The financial world has developed a special investment-oriented language to help describe the stock market, investments, securities for the stock market, stock market analysis, and its conditions. At times you may be confronted with a term which is totally alien or has a completely different meaning from what you thought. Misunderstanding these terms can sometimes lead to the wrong conclusion, and that can cost you money!

What you don't know can hurt you.

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Call Noun: The opposite of a put, a call is an option that gives you the right to buy a given stock (or commodity or other asset) at a given price in a given period. You pay a fee for this privilege. If it doesn't, the call expires worthless, and you're out the fee you paid. Calls are often used to hedge risk. Covered calls appeal to conservative investors. Verb: A bond issuer might have the right to call a bond, meaning redeem it early, usually because interest rates have fallen.   Callable Bond A bond that can be retired, or ""called in,"" by the issuer before the bond matures. The power to call a bond gives companies a way to respond to falling interest rates. Say XYZ Corp. issued bonds with a 12 percent coupon several years ago, when interest rates were high. If bond rates had since dropped to 7 percent, XYZ Corp. could call the bonds, pay off the investors and issue new bonds at just 7 percent -- saving millions in interest charges. The investors would come out on the short end, because they would have to re-invest the cash at much lower rates. Callable bonds often pay higher rates than noncallable bonds to compensate investors for this uncertainty. If you decide to buy callable bonds, just remember that the bond might be called back if interest rates drop.   Called Away The process whereby a seller of a covered call option is obligated to surrender the underlying stock to the option buyer at the strike price of the option sold.   Candlestick Charts A chart that displays the open, high, low, and close prices of a security for each time period and illustrates the relationship between these prices. The chart elements look like a candlestick with wicks at both ends. The actual candle portion is called the ""real body"" and is determined by the day's open and close prices. The wicks, called ""shadows,"" show the price range for the day. When the close is higher than the open, the body is colored red (if color is available) or left white. When the close is lower than the open, the body is filled in or colored black.   Capital Expenditure/Spending Spending on plant, equipment and the like. Capital expenses usually purchase things that last more than a year; these expenses are therefore capitalized on the balance sheet, and depreciated annually. Capital spending varies widely by industry. Power utilities, cable TV firms, heavy manufacturers and the like often have large capital expenditures. Securities firms and software companies, by contrast, depend more on human resources.