The term 'above par' refers to a situation where a security, typically a bond, is trading at a price above its face value or par value. This can indicate a strong demand for the security and may reflect favorable market conditions or high credit quality of the issuer.
An Account Statement is a detailed record of financial transactions for a specific period. It provides a summary of all activities within an account, showing the resulting balances and transactions.
Securities that have been actively traded on a particular stock exchange during a particular period. Active stocks are characterized by high trading volumes and frequent price movements, which make them attractive for traders looking for opportunities in market trends.
An Alternative Trading System (ATS) is a non-exchange trading venue that matches buyers and sellers to trade securities, usually through electronic means. It operates independently of the traditional stock exchanges and is often used to facilitate large block trades with minimally impacting the market.
An American Depositary Receipt (ADR) is a negotiable certificate issued by a U.S. bank representing shares in a foreign company traded on U.S. financial markets. ADRs offer U.S. investors a way to invest in overseas companies without dealing with foreign brokerage firms.
An American Depositary Receipt (ADR) is a receipt issued by a US bank to a member of the US public who has bought shares in a foreign country. The certificates are denominated in US dollars and can be traded as securities in US markets. ADRs reduce administration costs and avoid stamp duty on each transaction.
The process through which a company applies to a stock exchange to have its securities traded on that exchange.
An application form is a document issued by a newly floated company, accompanied by its prospectus, that members of the public use to apply for shares in the company.
The abbreviation ASB can refer to two distinct financial terms: the Accounting Standards Board, which oversees the development and implementation of accounting standards, and asset-backed security, a financial instrument backed by an underlying asset.
Assented stock refers to a security, typically an ordinary share, where the owner has agreed to the terms of a takeover bid. Different prices may be offered for assented and non-assented stock during takeover negotiations.
The term 'at par' refers to a financial instrument, such as a bond, that is trading at its face value. In other words, the market price of the bond is equal to its nominal or par value.
An order to buy or sell a security within the final 30 seconds of the trading session. Brokers cannot guarantee that these orders will be executed.
Customer's order to a broker to buy or sell a security at the price that applies when an exchange opens. If the order is not executed at that time, it is automatically canceled.
Centralized securities trading markets where securities are bought and sold in an orderly manner through security brokers. Securities, including equities, bonds, options, closed-end funds, and futures, are traded based on bid and offer prices.
The term 'average' commonly refers to the arithmetic mean, which is a measure of central tendency. In finance, it refers to an appropriately weighted and adjusted arithmetic mean of selected securities designed to represent market behavior.
A bear market is a financial term used to describe a market where the prices of securities are falling or are expected to fall. This state of the market is often characterized by a decline of at least 20% from recent highs.
Below Par refers to a financial security, especially a bond, that is trading at a price lower than its face or nominal value.
A beneficial owner is a person who enjoys the benefits of ownership, even though the title is in another name.
A Best Effort Arrangement is a method used by investment bankers, acting as agents, to sell a new issue to the public without actually buying the securities outright. These bankers have the option to buy the securities, but their primary responsibility is to use their best efforts to sell the issue on behalf of the issuer.
In financial markets, the bid and asked prices represent the highest price a buyer is willing to pay for an asset and the lowest price a seller is willing to accept, respectively. The difference between these two prices is known as the spread.
A share transfer form in which the name of the transferee and the transfer date are left blank. The form is signed by the registered holder of the shares so that the holder of the blank transfer has only to fill in the missing details to become the registered owner of the shares. Blank transfers can be deposited with a bank, when shares are being used as a security for a loan. A blank transfer can also be used when shares are held by nominees with the beneficial owner holding the blank transfer.
A blowout refers to the rapid sale of items or securities at very low prices in merchandising and securities markets. In the context of merchandising, it typically involves retail items sold quickly at steep discounts, whereas, in securities, it entails the rapid, complete sale of a new offering of shares.
In the USA, Blue-Sky Laws provide for state regulation and supervision of issuing investment securities within that state. They cover broker licensing and the registration of new issues to protect investors from fraudulent activities.
In finance and accounting, the term 'book' may refer to preliminary indications of interest in underwriting securities, a record maintained by a specialist of buy and sell orders, the action of giving accounting recognition to transactions, or collectively, the journals, ledgers, and other accounting records of a business.
Book-entry refers to the electronic system of recording ownership of securities instead of issuing physical certificates. This system facilitates easier and more secure transactions within financial markets.
The Borrowing Power of Securities refers to the ability of a client to borrow funds from a financial institution, using the purchased securities as collateral for the loan.
The term 'Bottom' refers to a support level for market prices of any type, representing the lowest point in various finance and economic contexts.
An investor who seeks to purchase securities, commodities, or other assets that are at their lowest market prices and are expected to rise in value.
The term 'Bourse' refers to a stock exchange, particularly derived from the French term used for stock markets. It is fundamentally a place where securities, commodities, derivatives, and other financial instruments are traded.
A broker-dealer is an individual or firm that buys and sells securities for its clients and its own account. Broker-dealers play a crucial role in the securities industry, providing liquidity and facilitating the trading of securities.
A bucket shop is a derogatory term for a brokerage firm or similar financial entity known for questionable practices and typically lacking membership in established trade organizations.
Buying on margin involves purchasing securities using credit from a broker, facilitated through a margin account, and is strictly regulated by the Federal Reserve Board (FRB).
A callable security can be redeemed by the issuer before its scheduled maturity date, usually triggering a necessity for extra payment to the holder, identified as a call premium.
In financial and legal contexts, 'cancel' refers to the act of voiding a negotiable instrument by annulling or settling it, prematurely terminating a bond or other contract, or voiding an order to buy or sell securities.
A carrying charge is a fee associated with holding an investment or conducting business that includes costs such as interest, storage, and insurance across various sectors like commodities, real estate, retailing, and securities.
The amount of cash or equivalent instruments held at any point in time. A commodity or securities trader or an investment company needs to monitor its cash position carefully to maintain adequate liquidity.
The Chicago Board Options Exchange (CBOE) is the largest U.S. options exchange and a pioneer in options trading, providing a platform for trading standardized options contracts based on various securities and financial products.
The Chicago Mercantile Exchange (CME) is one of the largest and most diverse financial exchanges in the world, allowing for the trading of futures and options across a wide array of asset classes, including agriculture, energy, metals, and financial instruments.
The term 'class' has versatile meanings across different fields such as education, finance, and law. It commonly refers to a group sharing common characteristics, whether in a school, investment category, or legal context.
In various fields such as Accounting, Finance, International Trade, and Securities, the term 'Clean' refers to different contexts of unstained or debt-free conditions, reflecting a desirable state or favorable judgment.
In various financial contexts, the term 'clear' refers to the process of validating and finalizing transactions, whether in banking, finance, or securities markets. This ensures accurate and timely settlements.
Closet indexing involves structuring a mutual fund or other managed portfolio to nearly replicate an index while avoiding full disclosure and charging active management fees.
The Committee on Uniform Securities Identification Procedures (CUSIP) assigns identifying numbers and codes for all securities. These CUSIP numbers and symbols are used when recording all buy and sell orders.
A competitive bought deal is an underwriting agreement wherein the borrower seeks simultaneous competitive quotations from multiple banks for the purchase of an entire new issue of bonds or similar securities at a fixed price.
Consideration is a fundamental element in a contract representing the exchange of promises or monetary value essential to legal agreements.
The conversion ratio is a relationship that determines how many shares of common stock will be received in exchange for each convertible bond or preferred share when the conversion takes place.
An illegal practice of purchasing a security or commodity in such volume that control over its price is achieved.
A bond issued with detachable coupons that need to be presented to a paying agent or the issuer to receive semiannual interest payments. These are bearer bonds, meaning the interest is payable to whoever holds the coupon.
Coupon stripping is a financial process in which the coupons are stripped off a bearer security and then sold separately as a source of cash, with no capital repayment; the bond, bereft of its coupons, becomes a zero coupon bond and is also sold separately.
Curb Exchange, also known as the American Stock Exchange, refers to an organized market where securities, commodities, currencies, and bonds are traded directly between brokers or via telecommunication systems.
The Committee on Uniform Securities Identification Procedures (CUSIP) system uniquely identifies financial instruments and facilitates transactions and record-keeping in the securities industry.
Daisy chain refers to the buying and selling of the same items multiple times, often to artificially inflate trading activity. Commonly associated with stocks and shares, the term describes a practice where the same items are included in sales figures multiple times.
In finance, a dealer is an individual or entity involved in the buying and selling of financial securities or other commodities, often at their own risk, for personal sales or to customers.
Delisting refers to the removal of a company's stock from trading on an organized stock exchange, such as the New York Stock Exchange. This can occur if the issuer fails to meet specific listing requirements or voluntarily chooses to delist.
In finance, denomination refers to the face value of currency units, coins, and securities. It is an important concept in the fields of accounting, taxation, and investment.
A dip refers to a slight drop in securities prices after a sustained uptrend. It’s often seen as a buying opportunity for investors.
A brokerage house that executes orders to buy and sell securities at rates lower than those charged by a full-service broker. In real estate, provides fewer services at reduced commissions.
Dollar Cost Averaging (DCA) is an investment strategy where an investor consistently buys a fixed dollar amount of an asset, such as mutual funds or securities, at regular intervals. This results in purchasing more units when prices are low, effectively lowering the average cost per share over time.
The Effective Date refers to the specific date on which an agreement, policy, or offering formally goes into effect and becomes enforceable.
Ex-rights refers to the period in which a stock is trading without the value of its newly issued rights attached. This typically happens after the record date for the rights issue, when new shares are offered to existing shareholders.
Exchange-Traded Funds (ETFs) are investment funds traded on stock exchanges, allowing for flexibility and real-time trading. They offer advantages over traditional mutual funds by being priced throughout the trading day.
An exchange-traded note (ETN) is a debt instrument that tracks the performance of a specific index and promises to repay the principal adjusted by applicable fees and index performance. Unlike exchange-traded funds (ETFs), ETNs are backed by the issuer.
The exercise price, also known as the strike price or striking price, is the predetermined price per share at which an option holder can buy (in the case of a call option) or sell (in the case of a put option) the underlying security.
Face value, also known as par value, denotes the nominal or stated value a particular asset maintains, such as stocks, bonds, or other types of securities. It is predominantly utilized in the fields of finance and investment to determine the fixed worth sovereignly ascribed to an instrument.
A Fill or Kill (FOK) order is an order to buy or sell a particular security that, if not executed immediately, is canceled.
A niche segment within the advertising industry, focused on the promotion of financial products and services such as mutual fund shares, limited partnership units, and products offered by banks, brokerage firms, and insurance companies.
Financial assets include stocks, bonds, rights, certificates, bank balances, and other securities, distinguishing themselves from tangible, physical assets like real property.
Enacted on November 12, 1999, the Financial Services Modernization Act, also known as the Gramm-Leach-Bliley Act, repealed parts of the Glass-Steagall Act of 1933 and the Bank Holding Company Act of 1956, thereby eliminating remaining firewalls between banks, securities firms, and insurance companies.
A firm order is an instruction given to a broker to execute a transaction at specific terms that remains valid for a stated period or until cancelled.
A firm quote is a specific type of bid or offer price for a security, typically stated by a market maker, that is binding and not identified as nominal or subject to further negotiation or review.
In accounting and finance, 'float' refers to various concepts including delayed money processing, publicly held stock proportions, contingency fund allocation, and processes related to financial transactions and securities.
Floating an issue refers to the process by which a company issues new securities to the public in order to raise capital. This process involves several steps, including registering the securities with regulatory bodies and underwriting the issue.
A Floating-Rate Note (FRN) is a type of debt instrument with a variable interest rate that adjusts periodically based on a benchmark interest rate, such as the LIBOR or the federal funds rate.
Forward dealing involves transactions in commodities, securities, currencies, freight, etc., for future delivery at a price agreed upon at the time the contract is made. This type of trading enables dealers and manufacturers to hedge future requirements.
A fungible issue refers to a bond or security that can be interchanged with another of the same class, offering benefits such as consistent documentation and an increased market depth.
Interchangeable goods, securities, etc., that allow one to be replaced by another without loss of value. Bearer bonds and banknotes are notable examples. Additionally, perishable goods whose quantity can be estimated by number or weight fall under this category.
Going long refers to the practice of purchasing a stock, bond, or commodity for investment or speculation purposes. The purchased security is held with the expectation that its value will increase over time, thereby providing profits to the investor.
Good delivery is a term used in the securities industry to signify that a certificate has the necessary endorsements and fulfills all specified requirements (including signature guarantees, proper denomination, and other qualifications) so that the title can be transferred by delivery to the buying broker, who is then obligated to accept it.
To pledge something as security without turning over possession of it. Hypothecation creates a right in the creditor to have the pledge sold to satisfy the claim out of the sale proceeds.
An Initial Public Offering (IPO) is a corporation's first sale of stock to the public. This event marks a pivotal moment for a company, transforming it from a private entity to a publicly traded company.
Insider trading refers to the practice of trading a public company's stocks or other securities based on material, non-public information about the company. This can provide insiders with an unfair advantage and is illegal.
An institutional lender is a financial intermediary who invests in loans and other securities on behalf of depositors or customers. These institutions are heavily regulated to mitigate risks and play a crucial role in both the primary and secondary markets for loans and securities.
A method of issuing new securities in which a broker or issuing house takes small quantities of a company's shares and issues them to clients at opportune moments. This method is also used by existing public companies that wish to issue additional shares.
An investment analyst helps in making informed decisions about investments in securities, commodities, and more, typically employed by financial institutions.
Investment banks play a pivotal role in the financial markets by advising on mergers and acquisitions, underwriting new securities, and often trading securities for their own accounts. They differ from commercial banks, focusing on capital creation for corporations and other entities.
An investment banker is a firm acting as an underwriter or agent that serves as an intermediary between an issuer of securities and the investing public.
An investment company is a financial institution engaged in holding securities and assets for investment purposes. They pool funds from individual investors and invest them in diversified portfolios of securities, offering professional management and diversification benefits.
Investment software is a computer program designed to track and manage investments in shares, cost, and revenue. These programs often include price and dividend histories of securities, enabling users to make comparisons with major market indicators and analyze tax ramifications of investment decisions.
An issue can refer to securities sold by a corporation, the process of selling new securities, descendants in estate planning, or a point of dispute in legal practice.
The issue price, also known as the offering price, is the price at which a new issue of shares is sold to the public. The market price of the securities may vary post-issuance, trading at a premium or a discount to the issue price.
A legal entity that has the power to issue and distribute securities. Issuers include corporations, municipalities, foreign and domestic governments and their agencies, and investment trusts. They are responsible for corporate reporting, paying dividends, and servicing debt.
The last sale refers to the most recent trade in a particular security, and it is not to be confused with the final transaction in a trading session, which is known as the closing sale.
LCH.Clearnet, now known simply as LCH, is a leading global clearing house that provides clearing and risk management services for various asset classes including equities, bonds, exchange-traded derivatives, commodities, and over-the-counter (OTC) derivatives.
A list of high-quality securities approved by a state agency for permissible holdings by fiduciary institutions.
A listed company is one that has a formal listing agreement with a major stock exchange, ensuring that its shares are publicly quoted and traded on that exchange. In the UK, these companies were once referred to as quoted companies.
The act of placing real estate for sale with a broker or entering a security to be traded on a stock exchange.
A long position is a financial strategy where an investor purchases a security or a derivative expecting that its price will rise over time, allowing for a profitable sale in the future.
In financial markets, a long position refers to the purchase of a security, commodity, or currency with the expectation that its value will increase over time. This term is often used in the context of stock trading, futures contracts, and foreign exchange markets.
Long-Term Capital Gain (Loss) refers to the profit or loss earned from the sale of securities or capital assets held for more than 12 months. This gain or loss has special tax implications for individual and corporate taxpayers.
The premier market for the trading of equities on the London Stock Exchange, featuring stringent listing requirements and greater liquidity compared to the Alternative Investment Market.
