a contract which gives the purchaser the right, though not the obligation, to purchase the underlying security at a specific price within a specific time frame.
a charting method, developed in japan, that visually shows the relationship between the opening and the closing share price. the price range between the open and close is plotted as a rectangle. if the close is above the open, the body of the rectangle is white. if the close of the day is below the open, the body of the rectangle is black. the lines from the high and low, to the rectangle, are called ‘shadows’ or ‘tails’.
the amount by which an asset’s sale price exceeds its purchase price. an investment that would result in a profit, if sold, is called an unrealized capital gain.
an increase in the capital or market price of an asset.
the decrease in the value of an investment; the shortfall between the sale price and the purchase price. capital losses may be offset against other taxation liabilities (eg. income tax) in certain circumstances.
a stock index which is computed by adding the capitalization of each individual stock and dividing by a predetermined divisor. the stocks with the largest market values have the greatest impact on the index.
the cost of storage charges, insurance, interest, and other incidental costs incurred when storing physical commodities over a period of time.
the basic maketrade account where all buying transactions are paid for in cash.
the purchase of a physical commodity against the forward sale of that commodity on the futures market.
a measure of a company’s financial health. calculated as net income plus amounts charged off for depreciation, amortization, and extraordinary charges; or cash receipts minus cash payments.
the strategy used by a company or fund to administer and invest its cash.
a transaction in which options and futures contracts that do not require delivery of the underlying security are settled in cash.
assets pledged by a borrower to secure a loan or other credit, which are subject to seizure upon borrower default.
a fee charged by a broker for the service of purchasing or selling securities or property; also called brokerage fee.
a physical item, such as food, metals, and grains that can be traded.
procedures undertaken to ensure internal and external controls and regulations are adhered to.
a process whereby the final value of an investment or series of investments increases exponentially over time due to compound interest, ie. when interest is earned on the interest as well as on the initial principal.
at a minimum, a series of trading days in which there is no or little progress in price.
an index which measures the prices of a selected group of goods and services which are typically bought by households. it is used as a measure of inflation and allows comparisons of the relative cost of living over time.
a liability or obligation which is difficult to quantify or may arise in the event of a certain occurrence, such as the damages which might have to be paid as the result of a successful legal action.
securities which can be exchanged for a specified amount of ordinary shares of a company at a prescribed price or ratio, at the option of the holder.
a price reaction, usually temporary, against the prevailing trend but which does not constitute a trend reversal.
referring to securities that move in the opposite direction of the overall economic cycle. investors would try to anticipate and take advantage of securities that are rising when the economy is weakening and falling when the economy is strengthening.
cum is the latin word for “with”. cum-dividend shares entitle the buyer to the current dividend. the dividend amount is usually reflected in the price of the security in question. the opposite of ex-dividend.
the risk that a business faces in relation to the value of overseas investments, which changes when foreign exchange rates change.
the part of a country’s balance of payments relating to imports and exports of goods and services and the net effect of income received and payments made on the country’s foreign debt and investments. if a negative figure arises from the sum of all these activities, it is a current account deficit.
shares which are sensitive to the business cycle; generally their performance is tied to the overall economy as they will advance on improving business conditions and decline when business slackens.