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Glossary of terms used on this site

  Glossary of terms used on this site
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Glossaries

Term Definition
Pay In/Pay Out

The days on which the members of a Stock Exchange pay or receive the amounts due to them are called pay in or pay out days respectively.

Position limit

The maximum number of listed option contracts on a single security which can be held by an investor or group of investors acting jointly.

Price Band

The range within which the price of a security or the index of a currency is permitted to move within a given period.

Price discovery

A general term for the process by which financial markets attain an equilibrium price, especially in the primary market. Usually refers to the incorporation of information into the price.

Price sensitive information

Any information which relates directly or indirectly to a company and which if published is likely to materially affect the price of securities of the company.

Prospectus

Any document described or issued as a prospectus and includes any notice, circular, advertisement or other document inviting deposits from the public or inviting offers from the public for the subscription or purchase of any shares in, or debentures of, a body corporate.

Proxy

One who votes for and on behalf of a shareholder at a company meeting.

Record Date

A date on which the records of a company are closed for the purpose of determining the stockholders to whom dividends, proxies rights etc., are to be sent.

Rights Issue/ Rights Shares

The issue of new securities to existing shareholders in a fixed ratio to those already held.

Rolling settlement

The practice on many stock markets of settling a transaction a fixed number of days after the trade is agreed.

Screen based trading

Form of trading that uses modern telecommunication and computer technology to combine information transmission with trading in financial markets.

Secondary Market

The market for previously issued securities or financial instruments.

Settlement Date

The date specified for delivery of securities between securities firms.

Short position

In futures, the short has sold the commodity or security for future delivery; in options, the short has sold the call or the put and is obligated to take a futures position if he or she is assigned for exercise.

Stock splits

A distribution of company’s own capital stock to existing stockholders with the purpose of reducing the market price of the stock, which would hopefully increase the demand for the shares.

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