Financial glossary

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Kaffirs
South African gold mining shares that trade on the London Stock Exchange. Financial glossary.

Kangaroos
Australian stocks.

Kansas City Board of Trade
The U.S.-based futures and options exchange for № 2 red wheat futures and options, Value Line Index futures and Mini Value Line futures and options.

Kappa
The ratio of the dollar price change in the price of an option to a 1% change in the expected volatility.

Karachi Stock Exchange
The major securities exchange of Pakistan.

Keiretsu
A network of Japanese companies organized around a major bank. The term is also used outside of Japan to describe how a large corporation with many subsidiaries and associated firms can manipulate revenues. For example, firm A and B are controlled by firm C. Firm A is forced to buy its input from firm B at a high price. As a result, A is unprofitable and B is very profitable. Financial glossary.

Keogh plan
A type of pension account in which taxes are deferred. Available to those who are self-employed.

Key man (or woman) insurance
A life insurance policy purchased by a company to insure the life of a key executive. The company is the beneficiary in case of the executive's death.

Keynesian economics
An economic theory of British economist, John Maynard Keynes that active government intervention is necessary to ensure economic growth and stability.

"Kick it out"
Used in the context of general equities. "Liquidate a position (sell a long/cover a short) without regard to price."

Kickback
In the context of finance, refers to compensation of dealers by sales finance companies for discounting installment purchase paper.
In the context of contracts, refers to secret payments made to insure that the contract goes to a specific firm.

Kicker
An additional feature of a debt obligation that increases its marketability and attractiveness to investors.

Kiddie tax
Tax owed for the investment income of children if the amount is more than $1,400.

Killer bees
Those who aid a company in fending off a takeover bid, usually investment bankers who devise strategies to make the target less attractive or more difficult to acquire.

Kiting
Used in banking to refer to the practice of depositing and drawing checks at two or more banks and taking advantage of the time it takes for the second bank to collect funds from the first bank. Also refers to illegally increasing the face value of a check by changing the numbers on the check. In the context of securities, refers to the manipulation and inflation of stock prices. Financial glossary.

Knock-out option
An option that is worthless at expiration if the underlying commodity or currency price reaches a specific price level.

Know your customer
An ethical foundation of securities brokers that an adviser who recommends the purchase or sale of any security to a customer, must believe that the recommendation is suitable for the customer, given the customer's financial situation.

Kondratieff Wave
An economic theory of the Soviet economist Kondratieff stating that the economies of the western world are susceptible to major up-and-down "supercycles" lasting 50 to 60 years.

Korea Stock Exchange
The major securities market of Korea.

Kruggerand
A gold coin minted by the republic of South Africa that typically sells for slightly higher prices than the market value of the gold it contains.

Kuala Lumpur Commodities Exchange
The Malaysian commodity exchange for trading futures in crude palm oil, crude palm kernel oil, tin, rubber and cocoa.

Kuala Lumpur Options and Financial Futures Exchange
Established in 1995, the Kuala Lumpur Options and Financial Futures Exchange offers equity derivative products based on underlying instruments traded on the Kuala Lumpur Stock Exchange (KLSE). Financial glossary.

Kuala Lumpur Stock Exchange
Established in 1973, the Kuala Lumpur Stock Exchange is the only stock exchange in Malaysia.

Kurtosis.
Measures the fatness of the tails of a probability distribution. A fat-tailed distribution has higher-than-normal chances of a big positive or negative realization. Kurtosis should not be confused with skewness, which measures the fatness of one tail. Kurtosis is sometimes referred to as the volatility of volatility.