Day Minimum Maximum range

All ôr None [AONs] Order An order wîth thîs condition should bé matched either wîth thé entire order quantity ôr none àt all. Arbitrage The business ôf taking advantage ôf difference în price ôf security traded ôn two ôr more stock exchanges, ßy buying în ôné & selling în thé ôthér [or vice versas]. Quite simply ît means yôù try tô buy something cheap în ôné place, tô make à profit selling ît somewhere else.Given thé speed àt whîch thé financial markets nôw operate, în practice thé simultaneous purchase ôf foreign exchange, securities, commodities ôr àny ôthér financial instrument în ôné market & thé sale în another àt à higher price. American Depository Receipt [ADRs] A stock representing à specified number ôf shares în à foreign corporation. ADR's àré bought & sold în thé American markets just like regular stocks. An ADR îs issued ßy à U.S. Bank, consisting ôf bundle ôf shares ôf foreign corporation thàt àré being held în custody overseas. The foreign entity must provide financial information tô thé sponsor bank. ADR's àré listed ôn either thé NYSE, AMEX, ôr NASDAQ. American Depository Share [ADSs] A share issued under deposit agreement thàt represents àn underlying security în thé issuer's home country. The term ADR & ADS àré thought tô bé thé same, théy sort ôf are. ADS îs thé actual share trading while ADR represents à bundle ôf ADSs. At best An instruction frôm thé client tô thé broker authorising him tô ùsé hîs discretion & try tô execute àn order àt thé best possible price. An 'at best' order îs valid only fôr day ît îs placed. Averaging The process ôf gradually buying more & more securities în à declining market [or selling în à rising markets] în order tô level ôùt thé purchase [or sales] price Arbitration Settlement ôf claims differences ôr disputes between ôné member & another & between à member & hîs clients, authorised clerks, sub-brokers etc., through appointed arbitrators. Bearer Security This îs à bond ôr à share fôr whîch théré îs no ôthér proof ôf ownership thàn thé physical possession ôf security. No official record ôr register ôf ownership îs kept, thé owner îs thé "bearer" ôf share ôr bond certificate. This means thàt thésé certificates àré easily traded without formality. If yôù own bearer securities, look after them! No dividend îs paid tô such shares & no interest paid tô such bonds. Instead thé certificate will hàvé several coupons attached. These must bé physically removed frôm thé certificate & presented tô thé originating Comp. fôr payment ôf àny dividend ôr interest tô bé made. Bears These stockmarket animals àré pessimists, théy expect share prices ôr àny ôthér type ôf investment tô fall. In à 'bear market' thé general sentiment îs thàt prices àré going tô go lower & majority ôf dealers will sell às quickly às possible fôr fear ôf holding shares whîch diminish în value.Bears, like 'bulls' drive thé market. Basis Point [BPs] The smallest measure used în quoting yields ôn fixed income securities. One basis point îs ôné percent ôf ôné percent, ôr 0.01%. Bear Market A prolonged period ôf falling securities prices în à stock market. Bond A debt security, ôr àn IOU, issued ßy à Comp. ôr government agency îs called à bond. A bond investor lends money tô thé issuer and, în exchange, thé issuer promises tô repay thé loan amount ôn à specified maturity date; thé issuer usually pays thé bondholder periodic interest payments over thé period ôf loan. Badla Carrying forward ôf transaction form ôné settlement period tô thé next without effecting delivery ôr payment. Badla involves carrying forward ôf transaction frôm ôné settlement period tô thé next. The carry-forward îs done àt thé making up price, whîch îs usually thé closing price ôf last day ôf settlement. A badla transaction attracts thé following payments / charges : [as] ‘margin money’ specified ßy stock exchange board; and [bs] contango ôr badla charges [interest chargess] determined ôn thé basis ôf demand & supply forces. Bargain Transaction between two members ôf exchange. The terms "dealings" & "contracts" also hàvé identical meanings. Blue Chips Blue Chips àré shares ôf large, well established & financially sound companies wîth àn impressive records ôf earnings & dividends. Generally, Blue Chip shares provide low tô moderate current yield & moderate tô high capital gains yield. The price volatility ôf such shares îs moderate. Bonus A free allotment ôf shares made în proportion tô existing shares ôùt ôf accumulated reserves. A bonus share doesn't constitute additional wealth tô shareholders. It merely signifies recapitalization ôf reserves into equity capital. However, thé expectation ôf bonus shares hàs à bullish impact ôn market sentiment & causes share prices tô go up. Book Closure Dates between whîch à Comp. keeps its register ôf members closed fôr updating prior tô payment ôf dividends ôr issue ôf new shares ôr debentures. Bull A bull îs ôné whô expects à rise în price sô thàt hé càn later sell àt à higher price. Bull Market A rising market wîth abundance ôf buyers & few sellers. Base Price This îs thé price ôf security àt thé beginning ôf trading day whîch îs used tô determine thé Day Minimum/Maximum & thé Operational ranges fôr thàt day. Buyer The trading member whô hàs placed thé order fôr purchase ôf securities Bid & offer Bid îs thé price àt whîch thé market maker buys frôm thé investor & offer îs thé price àt whîch hé offers tô sell thé stock tô thé investor. The offer îs higher thàn thé bid. Brokerage Brokerage îs thé commission charged ßy broker. The maximum brokerage chargeable îs determined ßy SEBI. Basket Trading Basket trading îs à facility ßy whîch investors àré în à position tô buy/sell àll 30 scrips ôf Sensex în thé proportion ôf current weights în thé Sensex, în ôné go. Beta It îs à standard measure ôf risk fôr àn individual stock. It îs thé sensitivity ôf movement ôf past share price ôf stock tô thé movement ôf market às à whole. The beta ôf market îs taken às 1. A benchmark index [the Sensex, fôr instances] îs taken às thé proxy fôr market. Stocks wîth betas greater thàn 1 tend tô amplify thé movement ôf market. If à stock hàs à beta ôf 1.20, ît means thàt îf thé market hàs moved ßy 1%, thé stock price wôùld hàvé moved ßy àn extra 1.2%. Bid This îs thé highest price àt whîch àn investor îs willing tô buy à stock . Practically speaking, thîs îs thé available price àt whîch àn investor càn sell shares. Bad delivery When physical share certificates along wîth transfer deeds àré delivered în thé market théré àré certain details tô bé filled în thé transfer deed. Any improper execution ôf thésé details result în à bad delivery. A bad delivery may pertain tô thé transfer deed ôr thé share certificate, & maybe because ôf transfer deed being torn, mutilated, overwritten, defaced etc. Buy limit order An order ôf buying à security wîth à condition thàt order won't bé executed above thé specific mentioned price. Buy ôn close An order ôf buying à stock, bùt only àt thé end ôf trading day. Security will bé bought în thé closing price range. Breakout When thé price ôf stock surpasses its initial high [resistance levels] ôr falls below thé initial low [support levels], ît îs termed às break ôùt în technical analysis. Book runner Institution thàt arranges & manages thé book building process fôr new public issue. Beneficial owner The actual owner ôf security, irrespective ôf whô îs holding thé security. Best ask The lowest price àt whîch à stock îs quoted tô bé sold. Best bid The highest price quoted fôr à particular stock tô bé bought. Bid/Ask spread The difference between thé ask price & bid price. Bourse The floor ôf Stock Exchange. Cash Settlement Payment fôr transactions ôn thé due date às distinct frôm carry forward [Badlas] frôm ôné settlement period tô thé next. Clearing Days ôr Settlement Days Dates fixed în advance ßy exchange fôr first & last business days ôf éàch clearance. The intervening period îs called settlement period. Clearing House Each Exchange maintains à clearing house tô act às thé central agency fôr effecting delivery & settlement ôf contracts between àll members. The days ôn whîch members pay ôr receive thé amounts due tô thém àré called pay-in ôr pay-out days respectively. Corner A situation where ßy àn individual ôr à group acquires such control ôn à security thàt ît can't bé obtained ôr delivered fôr performance ôf existing contracts except àt exorbitant prices. In such situations, thé Governing Board may intervene tô regulate ôr even prohibit further dealings în thàt security. Correction Temporary reversal ôf trend în share prices. This could bé à reaction [a decrease following à consistent rise în pricess] ôr à rally [an increase following à consistent fall în pricess]. Crisis Reckless heavy short-sales leading tô unduly depressed prices. In such à situation, thé Governing Board may prohibit short sales, fix minimum prices below whîch sells ôr purchases àré not permitted & limit further dealings only tô closing ôùt ôf existing contracts. Cum Means "with". A cum price includes thé right tô àny recently declared dividend [CDs] ôr right share [CRs] ôr bonus share [CBs]. Closing Price The trade price ôf security àt thé end ôf trading day. Based ôn thé closing price ôf security, thé base price àt thé beginning ôf next trading day îs calculated. Counterparty When à trading member enters àn order, àny ôthér trading member wîth àn order ôn thé opposite side îs referred tô às thé counterparty. Carry forward trading Trading where thé settlement ôf trades îs postponed ôn thé stock exchange until à future settlement period involving payment ôf interest ôn thé account. It refers tô thé trading în whîch thé settlement îs postponed tô thé next Acc. period ôn payment ôf contango charges [known às ‘vyaj badla’s] în whîch thé buyer pays interest ôn borrowed funds ôr thé backwardation charges [a.k.a ‘unda badla’s] în whîch thé short seller pays à charge fôr borrowing securities. Clearing Clearing refers tô thé process ßy whîch mutual indebtedness among members îs settled. The clearing corporation matches thé final buyers & sellers through multilateral netting. The members ôf clearing corporation also known às clearing members settle théîr dues wîth thé clearing house thàt îs operated ßy clearing corporation. The clearing corporation îs thé legal counter-party tô both legs ôf every trade. Company objection An investor sends thé certificate along wîth thé transfer deed tô thé Comp. fôr transfer. In certain cases thé registration îs rejected îf thé shares àré fake, forged ôr stolen ôr îf théré îs à signature difference etc;. In such cases thé Comp. returns thé shares along wîth à letter whîch îs termed às à Comp. objection. Call Option This îs thé right, bùt not thé obligation, tô purchase shares àt à specified price àt à specified date în thé future. See Options.For thîs privilege, thé buyer pays à premium whîch wôùld bé à fraction ôf price ôf underlying security. You àré gambling thàt thé share price will rise above thé option price. If thîs happens yôù càn buy thé shares & sell thém immediately fôr à profit.If thé share price doesn't rise above yôùr option price, yôù dô not exercise thé option & ît expires - àll yôù hàvé lost îs thé initial payment made tô purchase thé option. Call The demand ßy à Comp. ôr àny ôthér issuer ôf shares fôr payment. It may bé thé demand fôr full payment ôn thé due date, such as, fôr example, wîth à rights issue. It may, alternatively, bé thé demand fôr à further payment whén thé total amount îs payable ßy instalments.The calls àré usually made several months apart ßy call letter & thé shares àré sàîd tô bé paid-up whén thé final call hàs been paid. A call ßy à Comp. shouldn't bé confused wîth à call option. Capital Adequacy The test ôf securities business's ability tô meet its financial obligation.Capital adequacy rules mean thàt à bank/financial institution hàs tô hàvé enough money tô conduct its business Capitalization The total value ôf Comp. în thé stockmarket.This value îs arrived àt ßy multiplying thé number ôf shares în issue ßy company's share price. This market capitalization obviously fluctuates às thé share price moves up & down.It's àn important figure - îf yôùr Comp. îs worth £2 billion, you'll hàvé more credibility wîth bankers & ôthér companies yôù want tô take over thàn îf you're à little minnow wîth hardly àny value. Capitalization Issue Money frôm à company's reserves îs converted into issued capital, whîch îs thén distributed tô shareholders în place ôf cash dividend. This îs also known às à Scrip Issue. Call Risk The risk thàt bonds will bé redeemed [or "called"s] before maturity. This possibility increases during periods ôf falling interest rates. Capital Appreciation An increase în thé value ôf àn investment, measured ßy increase în à fund unit's value frôm thé time ôf purchase tô thé time ôf redemption. Capital Gain The amount ßy whîch àn investment's selling price exceeds its purchase price. Capital Market A market where debt ôr equity securities àré traded. Commercial Paper Debt instruments issued ßy corporations tô meet théîr short-term financing needs. Such instruments àré unsecured & hàvé maturities ranging frôm 15 tô 365 days. Commission A fee charged ßy à broker ôr distributor fôr his/her service în facilitating à transaction. Coupon Interest rate ôn à debt security thàt thé issuer promises tô pay tô thé holder until maturity. Usually expressed às à percentage ôf face value Consideration Consideration îs thé total purchase ôr sale amount associated wîth à transaction. The amount yôù 'pay' ôr 'receive'. It may also bé thé basis fôr working ôùt thé commission, taxes & àny ôthér charges yôù àré asked tô pay. Contract On àny securities market thîs îs thé agreement between à buyer & à seller buy ôr sell securities. The written agreement between thé seller & thé buyer tô transfer ownership ôf property frôm thé former tô thé latter.It îs à legally binding agreement fôr sale.In two identical parts, ôné signed ßy seller & ôné ßy purchaser. When thé two parts àré exchanged [exchange ôf contractss] both parties àré committed tô thé transaction. Convertible Any security îs described às convertible whén ît carries thé right ôr option fôr holder tô àt sômé stage convert ît în fôr another form ôf security àt à fixed price. Convertibles àré often bonds ôr loan stock [but sometimes preference sharess] whîch carry thé right tô bé converted into ordinary shares àt sômé date în thé future àt à previously specified price. Corporate Bonds A corporate bond îs àn IOU issued ßy à public company, such às HLL,ITC, TELCO etc. When yôù invest în à corporate bond, yôù àré lending money tô thé company. In return yôù will receive interest àt à fixed rate & thé promise thàt yôùr capital will bé repaid àt à certain date în thé future. The guarantee thàt our capital will bé returned îs only às good às thé Comp. yôù àré lending money to. While HLL, ITC, TELCO àré considered 'good risks' ßy investment pundits because théy àré blue chip companies, ôthér smaller companies àré likely tô bé à less good risk. Correction A correction îs à term tô describe à downward movement în share prices. In ôthér words, à shake ôùt ôr even à crash ôr mini-cash. Stockbrokers & fund managers like thé term correction, perhaps because they believe îf théy ùsé thé term crash ôr 'heavy fall', it'll cause panic. Whatever yôù decide tô call à downward jolt în share prices, îf yôù lose money, ît may bé described às à correction, bùt you'll feel pretty sick àll thé same! Clearing Clearing refers tô thé process ßy whîch àll transactions between members îs settled through multilateral netting. Cum-bonus The share îs described às cum-bonus whén à potential purchaser îs entitled tô receive thé current bonus. Cum-rights The share îs described às cum-rights whén à potential purchaser îs entitled tô receive thé current rights. Carry Over Margin The amount tô bé paid ßy operators tô thé stock exchange tô carry over théîr transactions frôm ôné settlement period tô another. Cash Settlement Payment fôr transactions ôn thé due date às distinct frôm carry-forward [badlas] frôm ôné settlement period tô thé next Capital loss The negative difference between thé selling price ôf stock & purchase price ôf stock. Cash markets The markets where securities [assetss] hàvé tô bé delivered immediately. Capital Asset Pricing Model [CAPMs] A model describing thé relationship between risk & expected return, & serves às à model fôr pricing ôf risky securities. CAPM says thàt thé expected return ôf security ôr à portfolio equals thé rate ôn à risk-free security plus à risk premium. If thîs expected return doesn't meet ôr beat required return thén thé investment shouldn't bé undertaken. Circuit breaker When à stock price increases ôr decreases ßy à certain percentage în à single day ît hits thé circuit breaker. Once thé stock hits thé circuit breaker, trading în thé stock above [or belows] thàt price îs not allowed fôr thàt particular day. Custodial fees The fees charged ßy custodian fôr keeping thé securities. Cumulative preference share Preference shares whose dividends will gét accumulated, îf thé issuer doesn't make timely dividend payments. Convertible preference shares Preference shares thàt càn bé converted into equity shares àt thé option ôf holder. Commercial Paper [CPs] CPs àré negotiable, short-term, unsecured, promissory notes wîth fixed maturities, issued ßy well rated companies generally sold ôn discount basis. Counter-party risk It îs thé risk thàt thé ôthér party tô à contract may not fulfill thé terms ôf contract. Deep Discount Bond It îs loan instrument different frôm àn ordinary debenture whîch îs usually offered àt its face value & earns periodic interest till redemption & îs redeemed wîth ôr without premium. Deep discount bond îs offered àt à discount & fetches no periodic interest & îs redeemed àt thé face value Dividend This îs thé income yôù receive às à shareholder frôm à company. When yôù buy àn ordinary share în à company, yôù become à shareholder [an owner ôf businesss] & tô thàt extent yôù will hàvé certain entitlements including thé right tô receive dividend payments às set ßy board ôf directors & approved ßy shareholders [sometimes called members.s]A dividend îs à cut ôf profits earned ßy business fôr year. This pay-out îs not guaranteed & where ît exists àt all, thé amount you'll receive will vary frôm Comp. tô Comp. & year tô year. Day Trading Day trading îs thé buying & selling ôf stocks during thé trading day ßy individuals known às day traders ôn théîr own account. The aim îs tô make à profit ôn thé day & hàvé no open positions àt thé close ôf trading session, thé day. Debenture A loan raised ßy à company, paying à fixed rate ôf interest & whîch îs secured ôn thé assets ôf company. Debentures àré fixed interest securities în return fôr long-term loans, théy tend tô bé dated fôr redemption between ten & forty years ahead ôf date ôf issue. They may bé secured ßy à floating charge ôn thé company's assets ôr théy may bé tied tô specific, named assets.Debenture interest hàs tô bé paid ßy à Comp. whether ît makes à profit ôr not - îf thé debenture holders dô not gét paid théy càn legally force thé Comp. into liquidation tô realise théîr claims ôn thé company's assets. Derivatives Instruments derived frôm securities ôr physical markets. The most common types ôf derivatives thàt ordinary investors àré likely tô come across àré futures , options , warrants & convertible bonds. Beyond this, thé range ôf derivatives possible îs only limited ßy imagination ôf investment banks. In ôthér words, new derivatives àré being created àll thé time. It îs likely nowadays thàt àny person whô hàs funds invested will unwittingly perhaps bé indirectly exposed tô derivatives. Delivery A transaction may bé fôr "spot delivery" [delivery & payment ôn thé same ôr next days] "hand-delivery" [delivery & payment ôn thé date stipulated ßy exchange, normally within two weeks ôf contract dates], special delivery [delivery & payment beyond fourteen days limit subject tô thé exact date being specified àt thé time ôf contract & authorized ßy exchanges] ôr "clearing" [clearance & settlement through thé clearing houses]. Day Minimum/Maximum range The minimum/maximum price range fôr à security ôn à trading day. Buy orders outside thé Maximum ôf range & sell orders outside thé Minimum ôf range àré not allowed tô bé entered into thé system. It îs calculated às à percentage ôf Base price.