Stock Exchange Glossary
Automated Trading System
A computer system used by the exchange to facilitate trading.
Large order to buy or sell a security.
Any interest bearing or discounted government or corporate security that obligates the issuer to pay the bondholder a specified sum of money, usually at specific intervals, and to repay the principal amount of the loan at maturity.
(see stock dividend.)
Book Value Per Share
A company's total shareholders' equity divided by the number of its outstanding common shares. Book value per share can be a guide in selecting priced under shares, and is an indication of the ultimate value of securities in liquidation.
An agent, or middle man, who facilitates the buying and selling of securities on behalf of investors on the Exchange.
Central Depository System (CDS)
A computer system that is used by Exchanges and brokerage houses to facilitate the exchange of securities certificates.
The price of the last 'round lot' transaction completed during a day's trading session of a particular security on an organized securities exchange.
A bond issued with detachable coupons that must be presented to a paying agent or the issuer for semi-annual interest payment. These are bearer bonds, so whoever presents the coupon is entitled to the interest.
Coupon Interest Rate
The promise by an issuer to pay to the bond holder until maturity an expressed annual percentage of face value, which is usually paid semi-annually.
A company acting as a principal in a securities transaction. It trades for its own account and risk. The dealer buys for and sells from his inventory, profiting from the difference in the buying and selling prices. Since most brokerage companies operate as brokers and as principals, the term broker/dealer is commonly used.
A negotiable certificate evidencing ownership of shares in a foreign corporation from a country outside the market in which the DR is traded. Each DR denotes depositary shares (DS) which represent a specific number of the underlying shares remaining on deposit in the issuer's home market.
The current annualized cash dividend paid on a share of common stock, expressed as a percentage of the current market price of the company's common stock.
Cash payments made to shareholders by a company, expressed as percentage of par value.
Earning Per Share (EPS)
A company's accounting annual net profits divided by the number of its common shares outstanding.
Ex-Dividend Date (Ex-Stock Dividend Date)
The date on which ownership of shares is determined for purposes of paying dividends (stock dividends.) Investors purchasing shares before the existing date receive the dividend (stock dividend) in question. Investors purchasing shares on or after the ex-dividend date (ex-stock dividend date) are not entitled to the dividend (stock dividend.)
The value of a bond, shares, or other security as given on the certificate or instrument. The face value is the amount on which interest payments or dividend are calculated, and is also referred to as par value or nominal value.
Global Depositary Receipt (GDR)
A global finance vehicle that allows an issuer to raise capital simultaneously in two or more markets through a global offering.
DRs that are offered to investors in two or more markets outside the issuer's home country.
The aggregate market value of a listed security, equal to the market price per unit of the security multiplied by the total number outstanding units of the security.
A dealer who maintains a firm bid and offer in a given security by standing ready to buy or sell at publicly quoted prices.
Market Value Weighted Index
Index whose components are weighted according to the total market value of their outstanding shares. The impact of a component's price change is proportional to the issue's overall market value, which is the share price times the number of shares outstanding.
Net Worth (Shareholders' Equity)
The amount by which assets exceeds liabilities; also known as shareholders' equity or net assets.
Par value of common share is set by the company issuing the share at the time of offering.
Price-Earning Ratio (P/E)
Also known as the multiple, it is a company's current share price divided by its earning per share. It gives investors an idea of how much they are paying for a company's earning power. For instance, the higher the P/E the investors pay, the more earning growth they may expect.
Return On Equity (ROE)
The company's total earnings divided by the total shareholders' equity. It tells common shareholders how effectively their money is being employed.
An instrument that signifies an ownership position in a company (a share), a creditor relationship with a company or government body (a bond), or rights to ownership such as those represented by an OPTION, SUBSCRIPTION RIGHT, and SUBSCRIPTION WARRANT.
Unit of equity ownership in a company. This ownership is represented by a share certificate, which names the company and the shareholder, giving the shareholder the right to claim on the company's earnings and assets.
Payment of a company dividend in the form of share rather than cash. The dividend is usually expressed as a percentage of the shares held by a shareholder.
An agent, appointed by an issuer, to maintain records of shares and bond owners, to cancel and issue certificates, and to resolve problems arising from lost, destroyed, or stolen certificates. A company may also serve as its own transfer agent.
Zero Coupon Rate
A security that makes no periodic interest payments, but instead is sold at a deep discount from its face value. The buyer of such a bond receives the rate of return by the gradual appreciation of the security, which is redeemed at face value on a specified maturity date.
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