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Glossary - C
An option where the buyer gets the right to buy the underlying security at a specified future date.
Total liabilities and equity less non-interest bearing liabilities.
Difference between the price at which a financial ashes is sold and its original cost (assuming the price has gone up).
Payments to mutual fund shareholders of profits from the sale of securities in a fund's portfolio. Capital gains distributions (if any) are usually made annually.
Annual total Revenue as a percentage of total assets.
The value of a company as measured by the market price of its common shares, multiplied by the total number of shares that have been issued.
When costs of items such as buildings, equipment and other items with a useful lifetime exceeding one year are categorized as assets to be depreciated over a number of years, rather than being expensed in the year of purchase.
Settlement where positions are carried forward from one settlement to another settlement.
Cash flow from operating activities divided by average number of shares.
Payment for transactions done in one settlement on the due date.
The change in stock price is recorded in points. The fraction amount depends on the security being traded. The change in stock price is the difference between the opening stock price and the current price the stock is selling at. For example, if stock XYZ opened at 10, and is now selling for 11.50 it would be up +1.50. The +1.50 is the change in stock price.
A mechanism used to restrain the market when it gets overheated. The Exchange may relax the limit after a cooling off period of about half an hour.
A title to an asset proves your legal ownerships of that asset. That asset be mortgaged, sold, rented or otherwise transferred, temporarily or permanently, to another person. This represents an encumbrance on the title. Banks are reluctant to authorize loans against assets which have encumbrances and prefer a clear title.
It is a legal counter party to both legs of every trade. The netted purchase and sale positions of the trading. Members are settled through the clearing house.
The closing price is the last traded price for the stock on a particular day. The previous close is the price a stock closed on the previous day.
Investors of such a fund buy shares from other share holders and sell shares to other investors. Share price is determined by supply and demand for fund shares.
It is used to provide a guarantee for a loan. Can be encased by the bank if you default in any way on repayment of interest or principle of your loan or other obligations. It includes negotiable instruments, shares or goods and titles to immovable assets. If you feel that your bank works at a snail's pace, try defaulting on a loan - the bank will encase your collateral so fast you'll never know what hit you till it is too late.
A fee charged by brokers for their service in facilitating investment has to be handled through brokers registered on that exchange.
Articles of commerce or products that can be used for commerce or used as raw materials in producing other goods. In a narrow sense, products traded on an authorized commodity exchange. Types of commodities include agricultural products, metals, petroleum, foreign currencies, financial instruments and indexes to name a few. No, you cannot trade your boss here.
Equity or ownership in a corporation. Stockholders participate in a company's profits or losses through dividends and changes in the stock's market value.
In some cases, the companies send back the certificates received for transfer citing reasons for their inability to do so. The letter sent by the company is known as Company Objection.
This method is prevalent in the U.S.A. but not (yet) in India . It is the average of analyst's recommendations for single entity. As many brokers have different ratings systems, their recommendations are standardized so that a consensus can be calculated
The I/B/E/S ratings are calculated using a standard set of recommendations, maintained by I/B/E/S, each with an assigned numeric value:
Each recommendation received from the analysts is mapped to one of the I/B/E/S standard ratings. Assigning a numeric value to the broker text enables I/B/E/S to calculate a consensus recommendation. This consensus recommendation appears as the mean (average) of the assigned values.
A technical analysis term meaning a stock price is in trading range, not moving significantly up or down.
A bond that can be exchanged for shares of stock.
Loan convertible into equity as per pre-agreed terms.
A business organization that, for tax, purposes is a legal entity and has continuity of existence and easy stock transfer procedure. A corporation has limited stock liability. The owners are liable only to the extent of their investment, that is, if an organization
Tanks the maximum you can lose is the value of your equity holding. A corporation's owners are the shareholders.
Cost of materials and labour required to produce products or services. Gross profit is sales minus cost of sales.
The interest rate on a bond.
A share is described as cum bonus when the purchaser is entitled for current bonus.
A share is described as cum bonus dividend when the purchaser is entitled for current dividend.
A share is described as cum rights when the purchaser is entitled for current rights.