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.
The Alternative Investment Market (AIM) is a sub-market of the London Stock Exchange (LSE). Launched in June 1995 to replace the Unlisted Securities Market, AIM provides a platform for smaller, growing companies to raise capital and have their shares publicly traded without the significant costs and regulatory complexities associated with a full market listing.
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.
A bear raid refers to an illegal attempt by investors to manipulate the price of a stock downward by selling large numbers of shares short. Such practices are prohibited under Securities and Exchange Commission (SEC) rules.
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 bond broker is a financial professional who specializes in buying and selling bonds on behalf of clients. They execute bond trades on the floor of exchanges or trade corporate, U.S. government, or municipal debt issues over the counter, often acting for large institutional accounts.
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.
Brokerage refers to the business or activity of a broker, which involves facilitating transactions between buyers and sellers in exchange for a commission. This term also refers to the commission earned from such transactions.
The world's oldest futures and options exchange, the Chicago Board of Trade (CBOT) was formed in 1848 as a centralized marketplace for the grain trade. Over the years, its product line has expanded to include numerous contracts on agricultural commodities and financial instruments.
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.
Commodities futures are contracts in which sellers promise to deliver a specified commodity by a future date at an agreed-upon price. These contracts are standardized and traded on commodity exchanges.
A commodity contract is a binding agreement involving the receipt or delivery of a commodity at a future date, often used in trading and risk management.
A securities transaction in which the same broker acts as agent on both sides of the trade. The practice, called 'crossing,' is legal only if the broker first offers the securities publicly at a price higher than the bid.
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.
Depth of Market (DOM) refers to the number of buy and sell orders waiting to be executed for a particular asset at varied price levels, indicating the liquidity and stability of that market.
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.
Fixation refers to the process of setting the present or future price of a commodity based on market analyses and assessments of supply and demand.
A futures market is a financial exchange where futures contracts, which are agreements to buy or sell specific commodities or financial instruments at a predetermined future date and price, are traded.
The grey market comprises markets for legal trading of goods that are in short supply or shares that are not yet issued but will be issued shortly, offering price anticipation and the potential for losses if allocations do not match expectations.
The Intercontinental Exchange (ICE) is an American company that owns and operates financial and commodity marketplaces. ICE plays a crucial role in global financial markets, providing trading and clearing services for a wide range of asset classes.
An indicative quote is a price provided to a client as a guide to current market prices. It is not a firm offer to buy or sell at the quoted price.
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.
A liquid instrument refers to a negotiable instrument that the purchaser can sell or trade before its maturity date, offering flexibility and quick access to funds.
An exchange in London where financial futures and options products are traded. Known for its influential role in the global financial markets.
Dealers in the securities exchange who buy and sell securities for their own account to maintain liquidity and an orderly market.
A market order is a buy or sell order to be executed immediately at the current market prices. These orders guarantee execution but do not guarantee a specific price.
Market price refers to the prevailing price of a product, service, security, or raw material in an open and competitive market. This term is crucial in formal markets such as stock exchanges or commodity markets.
Market value is a critical financial metric, reflecting the current price at which an asset or service can be bought or sold in a marketplace. It is widely used in trading and investing to determine the 'fair price' of a property, stock, or currency.
A Minus Tick, also known as a downtick, is a term used in trading and investing to describe a trade of a security that occurs at a price lower than the previous trade.
Net Change refers to the difference between the closing price of a stock, bond, commodity, or mutual fund from one trading day to the next. It is a crucial metric for investors to gauge the daily performance of an asset.
Stock prices that have reached their highest or lowest levels within the past year. This data is often published in newspapers and financial websites to indicate companies experiencing significant price changes.
The Official List refers to two primary components within the London Stock Exchange framework: a comprehensive list of all traded securities and a daily record of transactions, dividends, rights issues, prices, and other relevant data.
Open interest represents the total number of outstanding contracts in a commodity or options market, which have not yet been exercised, closed out, or allowed to expire.
An open order refers to a buy or sell order for securities that has not yet been executed or canceled.
A trading position where a trader holds commodities, securities, or currencies that are bought but unsold or unhedged, exposing them to market fluctuations until the position is closed or hedged.
The OTC Market (Over-the-Counter Market) is a decentralized market where trading of financial instruments such as stocks, bonds, commodities, and derivatives occurs directly between two parties without a central exchange or broker.
The over-the-counter market (OTC market) facilitates the trading of financial instruments that occur directly between two parties, outside of formal exchanges.
A physical commodity refers to an actual, tangible commodity that is delivered to the buyer upon the completion of a commodity contract, whether it be in the spot market or futures market. Examples include agricultural products like corn and soybeans, and natural resources like gold and oil.
A 'Plus Tick' indicates a security transaction executed at a price higher than the preceding transaction. This term is often used in trading and market analysis to denote positive price movements.
A premium rate refers to the price per unit of insurance coverage or, in finance, the premium fee applied to certain stocks when borrowed for trading activities such as short selling.
A profit-taking strategy is a method employed by investors and traders to sell an asset and secure profits after it has achieved a predefined target price.
Reading the tape involves monitoring changes in stock prices as displayed on the ticker tape in an attempt to gauge immediate stock market conditions of a particular stock, industry group, or the market as a whole.
A sale represents an exchange of goods or services for money. The concept and details of a sale vary across fields such as finance, law, marketing, and securities trading.
Securities markets are venues where securities are bought and sold, encompassing both organized exchanges and over-the-counter (OTC) markets. These markets facilitate the flow of capital from investors to companies, enabling economic growth and liquidity.
Settlement day refers to the date on which trades are officially cleared through the delivery of the securities or foreign exchange, finalizing the transaction.
Share splitting involves dividing the share capital of a company into smaller units. This practice usually aims to make shares more affordable and increase their liquidity in the market.
A position held by a dealer in securities, commodities, currencies, etc., where sales exceed holdings because the dealer expects prices to fall, enabling the shorts to be covered at a profit. Contrasts with a long position.
A short squeeze occurs when many traders with short positions are forced to buy stocks or commodities to cover their positions and prevent losses, leading to a sudden surge in buying and even higher prices.
A person who applies for shares in new issues in anticipation of selling them at a higher price once trading begins.
A stop-loss order is a directive given by an investor to a broker to sell a financial instrument, such as a stock, when it reaches a specified price point in order to cap the investor's loss.
The third market involves non-exchange-member broker-dealers and institutional investors trading exchange-listed securities over the counter (OTC).
A ticker symbol is a unique series of letters assigned to a security or company for trading purposes on a stock exchange. Ticker symbols provide a simplified way to quickly identify and interact with company stocks.
A ticker tape traditionally referred to the paper output of a stock ticker machine, which showed stock symbols and prices but now generally refers to the digital displays providing real-time stock prices.
