D&O insurance Directors and officers liability insurance.

Daiwa Bank debacle A 1995 rogue trader scandal.

deal risk Risk of a planned merger or acquisition failing.

dealer paper Commercial paper issued through a dealer.

debenture An unsecured corporate bond.

dedicated long An investment or trading strategy of always holding just long positions.

dedicated long bias An investment or trading strategy of always being net long the overall market.

dedicated short An investment or trading strategy of always holding just short positions.

dedicated short bias An investment or trading strategy of always being net short the overall market.

deed of trust Bond indenture.

default intensity An "instantaneous" rate of default.

default mode A mode of analysis for a portfolio credit risk model.

default model A type of model that assess the likelihood of default by an obligor.

default probability The likelihood that a counterparty will default on an obligation.

deferred-coupon bond A bond that pays no coupons for its first few years.

deferred-interest bond Any of several types of bonds that defer the payment of interest.

delivery month For physically settled futures contracts, the month during which delivery occurs.

delivery price The price to be paid under a forward contract.

delta The Greek factor sensitivities measuring a portfolio's first order (linear) sensitivity to the value of an underlier.

delta approximation A linear approximation for how a portfolio's value will change in response to a small change in an underlier's value.

delta-gamma approximation A quadratic approximation for how a portfolio's value will change in response to a small change in an underlier's value.

delta-gamma hedge A type of hedge that can be used to reduce or eliminate a portfolio's exposure to some underlier.

delta-gamma remapping A quadratic remapping constructed from a portfolio's deltas and gammas.

delta-gamma VaR measure Quadratic VaR measure.

delta hedge A type of hedge that is widely used by derivative dealers to reduce or eliminate a portfolio's exposure to some underlier.

delta neutral Having zero delta.

delta-normal VaR Linear VaR.

demand deposit A bank deposit that can be withdrawn any time without penalty.

democracy of capitalism A condition in which stock ownership of corporations is fragmented and widely dispersed among numerous investors.

deposit A sum of money placed with a bank for safe keeping and possibly to earn interest.

deposit insurance Insurance of deposits against default by the deposit taking institution.

Depository Institutions Deregulation and Monetary Control Act of 1980 US legislation that contributed to the deregulation of depository institutions.

depreciation An amount deducted from an asset's book value to account for loss in value over time.

depth, market The volume of transactions necessary to move prices.

derivative Derivative instrument.

derivative approximation In calculus, an approximation for a function constructed from its derivative.

derivative instrument An instrument that derives value from the value of some commodity, energy, or other financial instrument.

derivatives pricing theory The body of financial theory used by financial engineers to value derivative instruments.

deterministic volatility function model Alternative name for a local volatility model.

diff swap quanto swap

differential equations approach An informal name for derivatives pricing models based upon the original Black-Scholes methodology.

differential swap quanto swap

digital option Binary option.

direct paper Commercial paper sold directly to investors by the issuer.

directional strategy A trading or investment strategy that entails taking net long or short positions in a market.

directors and officers liability insurance Protects against legal claims for wrongful acts performed by corporate directors or officers in performing their corporate duties.

dirty price A bond price quoted with accrued interest.

discount curve A graph of discount factors as a function of maturity.

discount factor The factor by which a future cash flow must be multiplied in order to obtain its present value.

discount instrument A money market instrument that pays no coupons, matures for its face value, and is issued at a discount to its face value.

discount yield A convention for calculating yield on a discount instrument.

discounting 1) Calculating the present value of a future cash flow. 2) Purchasing a time draft for its discounted value.

discrete process A stochastic process that has terms associated with each integer.

discrete-time Refers to discrete stochastic processes.

disjoint Two sets are disjoint if they have no elements in common.

distance to default A metric of how close debt is to a defaulting.

diversification The taking of multiple disparate risks.

diversity (market) Diversity among market participants in their market views and desired trades.

dividend A distribution of corporate profits to shareholders.

dividend yield A stock's annual dividend divided by the stock's market price.

domestic bond A bond issued in a country by a domestic issuer for domestic investors. They are denominated in that country's currency and are subject to that country's regulations.

domestic CD A certificate of deposit issued within a country by a domestic bank or other depository institution.

draft An order to make payment to a third party.

drawee The party instructed to make payment by a draft.

drawer The party who issues a draft.

Drexel Burnham Lambert The investment bank that dominated the junk bond market of the 1980s.

dual remapping A type of remapping used in value-at-risk measures.

duration A factor sensitivities indicating a fixed income portfolio's first order (linear) sensitivity to the parallel shifts in the spot cure.

duration-convexity matching A technique of asset-liability matching.

duration matching A technique of asset-liability matching.

dynamic hedging A technique that is widely used by derivatives dealers to hedge gamma or vega exposures.

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