Glossary L

Large Cap

Typically, stocks issued by corporations with a market capitalization of $8 billion or greater.

LEAPS (Long Term Equity Anticipation Securities)

Long term options. Regular options contracts tend to go out only as far as nine months. For the investor who wants to make an options play on a security that goes out a year or longer.

Letter of Intent

A promise by a mutual fund shareholder to invest a specified sum of money within a specified period of time. In return, the shareholder is entitled to lower sales charges.

Level Load

A sales charge to a mutual fund that remains constant over time.

Lifetime Cap

A provision of an adjustable rate mortgage (ARM) that limits the highest interest rate allowed over the life of the loan. For example, a 6% interest rate with a 5% lifetime cap cannot exceed an 11% interest rate for the life of the loan. ARM lifetime caps vary and can be used for comparison when shopping for a loan.

Limited Tax G.O.

A general obligation pledge to pay which has some statutory limit. (Most often a pledge to levy ad valorem taxes up to a specific millage rate.)

Limit Order

"Equity: An order where the investor indicates a specific execution price. A buy price is usually set at or below the current market ask price, whereas a sell price is usually set at or above the current market bid price. Because limit orders are only executed at the specified price or better, it is possible that the order may not be executed. See also Market Order, Stop Order, Stop/Limit Order. Fixed Income: Orders at a specific price set by the client, rather than at the market. Orders where the customer has changed price, settlement, or asked for a quantity greater than available will be treated as subject."

Liquid Assets

Cash, or assets that can be quickly converted to cash.

Listed Securities

A security traded on a securities exchange, such as the New York Stock Exchange or American Stock Exchange. The various stock exchanges have different standards for listing.

Load Funds

Mutual funds sold by sales representatives. For the shares they sell, there is a sales charge, or load.

Load Type

"The type of sales charge on a particular, mutual fund investment. There are basically four types of loads:

• Front-End Load is a sales charge applied upon initial purchase of shares (typically ""A"" shares).
• Back-End Load is a sales charge applied when an investor withdraws money from an investment within a specified time period (typically ""B"" shares). The amount and duration of the charge is specific to each security. 
• Level Load is a sales charge that remains constant over time (typically ""C"" shares). 
• No-Load indicates the nonexistence of any type of sales charge."