# Accounts and Positions Glossary

> 67 terms from the Investing & Digital Assets book's Accounts and Positions part, each defined in a line and linked to the chapter that explains it.

- **ACATS:** DTCC's Automated Customer Account Transfer Service, which moves a customer's securities and cash in kind between NSCC members under FINRA Rule 11870 ([Funding & Account Transfers](https://www.syntaqx.com/books/investing-and-digital-assets/funding-and-transfers#acats-transfers)).
- **Adequate identification:** naming the lots a sale relieves to the broker by the time of the sale, confirmed by the broker in writing; a standing order counts ([Cost Basis, Tax Lots & Wash Sales](https://www.syntaqx.com/books/investing-and-digital-assets/cost-basis-and-tax-lots#lot-relief-methods)).
- **Airdrop:** new tokens distributed to holders' addresses; for an exchange customer, ordinary income at fair market value when the exchange credits them (Rev. Rul. 2019-24) ([Corporate Actions & Asset Events](https://www.syntaqx.com/books/investing-and-digital-assets/corporate-actions#forks-and-airdrops)).
- **Average basis:** a cost basis method that averages the basis of identical shares in an account, allowed only for mutual fund and dividend reinvestment plan shares ([Cost Basis, Tax Lots & Wash Sales](https://www.syntaqx.com/books/investing-and-digital-assets/cost-basis-and-tax-lots#lot-relief-methods)).
- **Bank sweep program:** a broker's service that moves customers' free credit balances into deposits at program banks, insured by pass-through coverage and no longer the broker's liability ([Cash, Sweeps & Yield](https://www.syntaqx.com/books/investing-and-digital-assets/cash-and-sweeps#bank-sweep-programs)).
- **Buying power:** the largest purchase an account may make now, computed from settled and unsettled cash, margin equity, holds and instant credit; a formula over the ledger, not a balance in it ([Ledgers, Positions & Buying Power](https://www.syntaqx.com/books/investing-and-digital-assets/ledgers-and-positions#buying-power)).
- **Carrying firm:** in an ACATS transfer, the broker that holds the account and must validate or take exception within one business day ([Funding & Account Transfers](https://www.syntaqx.com/books/investing-and-digital-assets/funding-and-transfers#acats-transfers)).
- **Cash account:** a brokerage account that pays for purchases in full within the Regulation T payment period, without borrowing ([Ledgers, Positions & Buying Power](https://www.syntaqx.com/books/investing-and-digital-assets/ledgers-and-positions#buying-power)).
- **Cash in lieu:** cash paid instead of a fractional share in a reverse split, merger or spinoff; treated as a sale of the fraction ([Corporate Actions & Asset Events](https://www.syntaqx.com/books/investing-and-digital-assets/corporate-actions#splits-and-reverse-splits)).
- **Cash liquidation violation:** in a cash account, covering a purchase by selling other securities after the purchase date, so the covering sale settles after the purchase does ([Ledgers, Positions & Buying Power](https://www.syntaqx.com/books/investing-and-digital-assets/ledgers-and-positions#buying-power)).
- **Composite (consolidated) 1099:** one year-end document carrying a brokerage account's 1099-B, 1099-DIV, 1099-INT and 1099-MISC, furnished by February 15 ([Confirms, Statements & Tax Forms](https://www.syntaqx.com/books/investing-and-digital-assets/statements-and-tax-forms#the-1099-composite)).
- **Confirmation (Rule 10b-10):** the written notice of a securities trade, sent at or before completion, with price, quantity, capacity and order flow disclosures ([Confirms, Statements & Tax Forms](https://www.syntaqx.com/books/investing-and-digital-assets/statements-and-tax-forms#rule-10b-10-confirmations)).
- **Core position:** the cash vehicle a brokerage account's uninvested cash sits in by default, chosen at opening: a money market fund, a bank sweep or a free credit balance ([Cash, Sweeps & Yield](https://www.syntaqx.com/books/investing-and-digital-assets/cash-and-sweeps#how-the-platforms-do-it)).
- **Covered security:** a security the broker must report basis for: acquired after the applicable date (2011 for most stock, 2026 for digital assets in custody) in the account, or transferred in with a statement ([Cost Basis, Tax Lots & Wash Sales](https://www.syntaqx.com/books/investing-and-digital-assets/cost-basis-and-tax-lots#covered-and-noncovered-securities)).
- **Custodial account (UTMA/UGMA):** an account a minor owns from the first deposit, managed by an adult custodian, who is the CIP customer, until the age the state's act sets ([Opening Accounts](https://www.syntaqx.com/books/investing-and-digital-assets/opening-accounts#minors-and-custodial-accounts)).
- **De minimis error safe harbor:** the rule that a reported amount within $100 (or $25 of withholding) of correct need not be corrected unless the recipient elects corrections ([Confirms, Statements & Tax Forms](https://www.syntaqx.com/books/investing-and-digital-assets/statements-and-tax-forms#corrections-and-their-timing)).
- **Deficit (instant deposit):** a negative cash balance left when a deposit the customer already spent through instant credit is returned; due immediately ([Funding & Account Transfers](https://www.syntaqx.com/books/investing-and-digital-assets/funding-and-transfers#instant-deposits-are-credit)).
- **Deposit beta:** the share of a change in market rates a cash program passes to customers; a low beta earns more as rates rise and loses all of a cut ([Cash, Sweeps & Yield](https://www.syntaqx.com/books/investing-and-digital-assets/cash-and-sweeps#the-sweep-spread)).
- **Dollar-based (notional) order:** an order stating the amount to spend, converted to a quantity at the fill price and the instrument's precision ([Fractional Shares & Recurring Investing](https://www.syntaqx.com/books/investing-and-digital-assets/fractional-and-recurring#dollar-based-orders)).
- **DRIP (dividend reinvestment):** a standing instruction to buy more of a security with its dividend, carried out as an order after the pay date, each purchase its own lot ([Fractional Shares & Recurring Investing](https://www.syntaqx.com/books/investing-and-digital-assets/fractional-and-recurring#drip-is-an-order-not-an-event)).
- **Ex-date:** the first day a buyer no longer receives a distribution; the record date for distributions under 25% of value, the day after the payable date for 25% or more ([Corporate Actions & Asset Events](https://www.syntaqx.com/books/investing-and-digital-assets/corporate-actions#record-ex-and-pay-dates)).
- **Excess bank:** the bank in a sweep program that takes every dollar above the per-bank placements, without limit and uninsured above $250,000 ([Cash, Sweeps & Yield](https://www.syntaqx.com/books/investing-and-digital-assets/cash-and-sweeps#bank-sweep-programs)).
- **FIFO (first in, first out):** the default lot relief method: without identification, the earliest acquired shares are sold first ([Cost Basis, Tax Lots & Wash Sales](https://www.syntaqx.com/books/investing-and-digital-assets/cost-basis-and-tax-lots#lot-relief-methods)).
- **Form 1042-S:** the year-end form for US-source income paid to a foreign person and the tax withheld, furnished by March 15 ([Confirms, Statements & Tax Forms](https://www.syntaqx.com/books/investing-and-digital-assets/statements-and-tax-forms#the-1042-s-for-foreign-accounts)).
- **Form 1099-B:** the broker's report of proceeds from securities sales, with adjusted basis, term and disallowed wash sale loss for covered lots ([Confirms, Statements & Tax Forms](https://www.syntaqx.com/books/investing-and-digital-assets/statements-and-tax-forms#the-1099-composite)).
- **Form 1099-DA:** the broker's report of digital asset sales: gross proceeds from 2025, basis for covered units from 2026 ([Confirms, Statements & Tax Forms](https://www.syntaqx.com/books/investing-and-digital-assets/statements-and-tax-forms#form-1099-da-and-its-timeline)).
- **Form 8937:** an issuer's report of an organizational action that affects holders' basis, due by the 45th day after the action ([Cost Basis, Tax Lots & Wash Sales](https://www.syntaqx.com/books/investing-and-digital-assets/cost-basis-and-tax-lots#corporate-actions-and-basis)).
- **Fractional inventory:** the firm's own holding of fractional shares left over from batches, a firm position entitled to dividends and corporate actions like any holder ([Fractional Shares & Recurring Investing](https://www.syntaqx.com/books/investing-and-digital-assets/fractional-and-recurring#how-brokers-create-fractions)).
- **Free credit balance:** cash a broker owes a customer, payable on demand, carried on the broker's books, usable in its business within Rule 15c3-3 and protected by SIPC up to $250,000 ([Cash, Sweeps & Yield](https://www.syntaqx.com/books/investing-and-digital-assets/cash-and-sweeps#free-credit-balances)).
- **Free riding:** buying securities and paying for them with the proceeds of selling the same securities; under Regulation T it freezes a cash account's credit for 90 days ([Ledgers, Positions & Buying Power](https://www.syntaqx.com/books/investing-and-digital-assets/ledgers-and-positions#buying-power)).
- **Global allocation:** under Rev. Proc. 2024-28, a rule written before 2025 for assigning unused digital asset basis to wallets and accounts ([Cost Basis, Tax Lots & Wash Sales](https://www.syntaqx.com/books/investing-and-digital-assets/cost-basis-and-tax-lots#crypto-basis-per-wallet-and-per-account)).
- **Good faith violation:** in a cash account, selling a security bought with unsettled proceeds before those proceeds settle ([Ledgers, Positions & Buying Power](https://www.syntaqx.com/books/investing-and-digital-assets/ledgers-and-positions#buying-power)).
- **Hard fork:** a permanent split of a chain into two; no income without new units, income when new units are received ([Corporate Actions & Asset Events](https://www.syntaqx.com/books/investing-and-digital-assets/corporate-actions#forks-and-airdrops)).
- **Holding period:** the time an asset is held, counted from the day after acquisition; more than one year is long-term ([Cost Basis, Tax Lots & Wash Sales](https://www.syntaqx.com/books/investing-and-digital-assets/cost-basis-and-tax-lots#basis-and-holding-period)).
- **Instant deposit:** a platform's advance of part of a pending bank deposit so the customer can trade at once; credit the firm extends against a reversible payment ([Funding & Account Transfers](https://www.syntaqx.com/books/investing-and-digital-assets/funding-and-transfers#instant-deposits-are-credit)).
- **Investment profile:** the customer's income, net worth, liquid net worth, objectives, experience and affiliations, collected under FINRA 2090 and 4512 and Rule 17a-3(a)(17), versioned and confirmed every 36 months ([Opening Accounts](https://www.syntaqx.com/books/investing-and-digital-assets/opening-accounts#the-investment-profile)).
- **Location (ledger):** where an asset sits (a wallet, a bank account, DTC, a custodian), carried on the ledger's omnibus lines opposite the owners' lines so each instrument sums to zero ([Ledgers, Positions & Buying Power](https://www.syntaqx.com/books/investing-and-digital-assets/ledgers-and-positions#double-entry-in-many-units)).
- **Lot engine:** the processor that opens, relieves, adjusts and restates tax lots from executions, asset events, transfers and elections ([Cost Basis, Tax Lots & Wash Sales](https://www.syntaqx.com/books/investing-and-digital-assets/cost-basis-and-tax-lots#the-lot-engine)).
- **Margin disclosure statement:** the FINRA Rule 2264 statement given to non-institutional customers at or before opening a margin account and annually after ([Opening Accounts](https://www.syntaqx.com/books/investing-and-digital-assets/opening-accounts#capabilities-and-approvals)).
- **Nontransferable asset:** a position the receiving firm won't accept in an ACATS transfer, such as a proprietary fund, which the customer must instruct the carrying firm to liquidate, retain or transfer otherwise ([Funding & Account Transfers](https://www.syntaqx.com/books/investing-and-digital-assets/funding-and-transfers#acats-transfers)).
- **Omnibus wallet:** an on-chain wallet holding many customers' crypto in the platform's name, whose ownership only the internal ledger records ([Ledgers, Positions & Buying Power](https://www.syntaqx.com/books/investing-and-digital-assets/ledgers-and-positions#omnibus-and-segregated)).
- **Options approval level:** a firm's own tier of permitted option strategies, granted in writing by a principal under FINRA Rule 2360(b)(16), which defines no tiers itself ([Opening Accounts](https://www.syntaqx.com/books/investing-and-digital-assets/opening-accounts#capabilities-and-approvals)).
- **Pass-through voting:** letting the holders of a fund or a fractional position instruct how the shares held for them are voted ([Corporate Actions & Asset Events](https://www.syntaqx.com/books/investing-and-digital-assets/corporate-actions#proxy-and-pass-through-voting)).
- **Payment period:** under Regulation T, the standard settlement cycle plus two business days, the time a cash account customer has to pay for a purchase ([Ledgers, Positions & Buying Power](https://www.syntaqx.com/books/investing-and-digital-assets/ledgers-and-positions#buying-power)).
- **Periodic plan statement:** the Rule 10b-10(b) quarterly statement that replaces per-trade confirmations for plan transactions, with prior written notice ([Confirms, Statements & Tax Forms](https://www.syntaqx.com/books/investing-and-digital-assets/statements-and-tax-forms#rule-10b-10-confirmations)).
- **Receiving firm:** in an ACATS transfer, the broker the customer is moving to, which submits the transfer instruction ([Funding & Account Transfers](https://www.syntaqx.com/books/investing-and-digital-assets/funding-and-transfers#acats-transfers)).
- **Record date:** the date on which holders on the issuer's books are entitled to a distribution or a vote ([Corporate Actions & Asset Events](https://www.syntaqx.com/books/investing-and-digital-assets/corporate-actions#record-ex-and-pay-dates)).
- **Residual (ACATS):** a dividend, interest payment or other credit that reaches the carrying firm after a full transfer, forwarded within ten business days for at least six months ([Funding & Account Transfers](https://www.syntaqx.com/books/investing-and-digital-assets/funding-and-transfers#acats-transfers)).
- **Residual (fractional):** the part of a whole share bought for a batch that customers didn't take, held in the firm's fractional inventory ([Fractional Shares & Recurring Investing](https://www.syntaqx.com/books/investing-and-digital-assets/fractional-and-recurring#rounding-and-residuals)).
- **Reverse split:** a consolidation of shares (1 for 10, say) that keeps total basis, with fractions paid as cash in lieu ([Corporate Actions & Asset Events](https://www.syntaqx.com/books/investing-and-digital-assets/corporate-actions#splits-and-reverse-splits)).
- **Riskless principal:** buying in the market to fill a customer order at the same price, acting as principal; one way brokers fill fractional orders ([Fractional Shares & Recurring Investing](https://www.syntaqx.com/books/investing-and-digital-assets/fractional-and-recurring#how-brokers-create-fractions)).
- **Settlement-date position:** the quantity an account holds counting only lines whose settlement date has arrived; what is at the depository and what the stock record reflects ([Ledgers, Positions & Buying Power](https://www.syntaqx.com/books/investing-and-digital-assets/ledgers-and-positions#trade-date-and-settlement-date)).
- **Specific identification:** choosing which lots a sale relieves, by instruction at the time of sale or by a standing order such as highest cost ([Cost Basis, Tax Lots & Wash Sales](https://www.syntaqx.com/books/investing-and-digital-assets/cost-basis-and-tax-lots#lot-relief-methods)).
- **Specific unit allocation:** under Rev. Proc. 2024-28, assigning identified units of unused digital asset basis to particular wallets or accounts ([Cost Basis, Tax Lots & Wash Sales](https://www.syntaqx.com/books/investing-and-digital-assets/cost-basis-and-tax-lots#crypto-basis-per-wallet-and-per-account)).
- **Specified adult:** under FINRA Rule 2165, a customer 65 or older, or an adult the firm reasonably believes can't protect their own interests, whose account a firm may hold for suspected exploitation ([Opening Accounts](https://www.syntaqx.com/books/investing-and-digital-assets/opening-accounts#trusted-contacts-and-senior-holds)).
- **Spinoff:** a distribution of a subsidiary's shares to the parent's holders; in a tax-free spinoff, basis is split by relative fair market value and holding periods carry over ([Corporate Actions & Asset Events](https://www.syntaqx.com/books/investing-and-digital-assets/corporate-actions#spinoffs)).
- **Stock record:** the broker-dealer's securities record under Rule 17a-3(a)(5), listing for each security who owns it and where it is, as of settlement dates, long equal to short ([Ledgers, Positions & Buying Power](https://www.syntaqx.com/books/investing-and-digital-assets/ledgers-and-positions#the-stock-record)).
- **Sweep spread:** the difference between what program banks pay for swept cash and what the customer receives, kept by the broker or its affiliated bank ([Cash, Sweeps & Yield](https://www.syntaqx.com/books/investing-and-digital-assets/cash-and-sweeps#the-sweep-spread)).
- **Temporary hold (FINRA 2165):** a hold on disbursements or transactions in a specified adult's account for suspected exploitation, up to 15 business days, extendable by 10 and then 30 ([Opening Accounts](https://www.syntaqx.com/books/investing-and-digital-assets/opening-accounts#trusted-contacts-and-senior-holds)).
- **Tender offer:** an offer to buy holders' shares at a stated price, open at least 20 business days under Rule 14e-1 ([Corporate Actions & Asset Events](https://www.syntaqx.com/books/investing-and-digital-assets/corporate-actions#tender-offers)).
- **TIF (transfer instruction):** the customer-signed instruction a receiving firm submits to start an ACATS transfer ([Funding & Account Transfers](https://www.syntaqx.com/books/investing-and-digital-assets/funding-and-transfers#acats-transfers)).
- **Token migration:** a move of a token to a new contract or native asset at a fixed ratio, applied as a conversion of every holder's balance ([Corporate Actions & Asset Events](https://www.syntaqx.com/books/investing-and-digital-assets/corporate-actions#token-migrations-and-redenominations)).
- **Trade-date position:** the quantity an account holds counting every executed trade, settled or not; the basis for market value, margin and tax lots ([Ledgers, Positions & Buying Power](https://www.syntaqx.com/books/investing-and-digital-assets/ledgers-and-positions#trade-date-and-settlement-date)).
- **Transfer statement (6045A):** the statement of lots, basis and acquisition dates a delivering broker sends within 15 days after a transfer settles ([Cost Basis, Tax Lots & Wash Sales](https://www.syntaqx.com/books/investing-and-digital-assets/cost-basis-and-tax-lots#transferred-basis)).
- **Value hold:** a withdrawal restriction equal to a reversible deposit's amount, applied to cash or crypto alike so ACH-funded assets can't leave before the deposit is safe ([Funding & Account Transfers](https://www.syntaqx.com/books/investing-and-digital-assets/funding-and-transfers#crypto-in-and-out)).
- **Wash sale:** a loss sale with substantially identical stock acquired within 30 days before or after; the loss is disallowed and added to the replacement's basis, with the holding period carried over ([Cost Basis, Tax Lots & Wash Sales](https://www.syntaqx.com/books/investing-and-digital-assets/cost-basis-and-tax-lots#wash-sales)).
- **Withdrawable cash:** settled cash less holds, instant credit outstanding, reserved orders and margin requirements; what may leave the firm today ([Ledgers, Positions & Buying Power](https://www.syntaqx.com/books/investing-and-digital-assets/ledgers-and-positions#withdrawable-cash)).

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