Annual Report : Formal financial statements, the Auditors’ Report, together with the
Directors’ Report issued by a company. These financial statements are
usually prepared at the close of the company’s financial year.
Arbitrage : The simultanceous purchase and sale of the same security on different
stock exchanges at prices which yield a profit.
Assets : What the company owns and various debts owing to it.
Balance Sheet : The Balance Sheet is a statement of the Company’s financial position
at a specific date.
Bear : An investor who anticipates for a decline in stock prices.
Bear Market : A market in which stock prices are declinig in general. A serious
decline is called a depression. A short decline in a generally rising
market is looked upon as a technical correction.
Capital gain or
Capital loss : Prifit or loss from the sale of a capital asset, including securities.
Capital Gain Tax : Tax payable on profit arising fromappreciation in value of investment,
realized at the time of selling or maturity of investment.
Carry-over : Equity repurchase transactions, better known, as “Badla”; are an
Trades established formof transactions used in the stock market for temporary
financing of trades by speculators and jobbers.
Clearing : Settlement or cl earance of accounts in stock exchanges.
Collateral : Securities or other properties pledged by a borrower to secure the
repayment of a loan.
Commission : The fees payable by a client to the sharebroker for buying or selling
securities on his behalf.
Contract : A statement sent to a client by the stockbroker, giving details of
securities purchased or sold.
Convertible : A bond, debenture, or preferred share that may be exchanged by the
owner for common stock or other security, usually of the same company,
in accordance with the terms of the issue.
Corner : To have control of supply of a security by buying on such large scale
that the entire market is affected. It strongly influences the market
prices in a way that the person with the corner may make undue profit
or forces other with a short position to cover at a loss.
Cum-dividend : The term implies that the buyer is entitled to the dividend currently
declared.
Cum-right : Shares having the right to receive the upcoming rights issues offered
by the company.
Dividend : That part of a company’s profits which is distributed among shareholders,
usually expressed in rupee per share or percentage to paid up capital.
It could be in the form of cash or stock (Bonus Share).
Earnings per : Aprofitability indicator calculated by dividing the net after tax earnings
share (EPS) available to common stockholders during a period by the average
number of shares outstanding at the end of that period.
Equity : The owners’ interest in a company’s capital, usually referred to as
ordinary shares.
Ex-dividend : A synonym for without dividend. The buyer of a stock selling exdivident
does not receive the recently declared dividend.
Face value : The value of a security that appears on the face of the certificate unless
the value is otherwise specified by the issuing company. It is also termed
as par value.
Floatation : The occasion when a company’s shares are offered on the stockmarket
for the first time.
Fund managers : A company, which invests and manages investors’ money, with the
aim of maximizing capital growth.
Gamble : To bet on uncertain outcome.
Initial Public : The offering of equity shares of a company to the general public for
Offering (IPO) the first time.
Insider Trading : Insider trading normally occurs when an insider, that is, a director, an
officer, a banker or a favored customer, due to his access to special
information about the company’s affairs, which has not been made
available to the market influence the value of shares to his advantage.
Investment : To commit (money) in order to earn a financial return.
Investment : A company, which issues shares and uses its capital to buy securities
company and shares in other companies.
Investor : An individual whose principal objective in the purchase of a security
is regular dividend income, safety of the original investment and, if
possible, capital appreciation.
Letter of : Usually sent with the letter of right. A shareholder may renounce the
Renunciation shares offered in favour of some other individuals. The shareholder
transfers the right to take up the shares offered to him.
Letter of Right : A letter sent by a company to shareholders offering them the right to
subscribe in a specified number of shares.
Liabilities : What the company owes to its shareholders and creditors.
Listed company : A company whose securities are admitted for listing on a stock exchange.
Market : The total value of a company’s equity capital at the current market
capitalization price.
Market maker : A person who commits itself to always being ready to deal in a range
of securities for his own account taking temporary position.
Market price : In case of a security, market price is usually considered the last reported
price at which the security is sold.
Net change : The change in the price of a security between the closing price on one
day and the closing price on the following day on which the stock is
traded. In case of a stock that is entitled to dividend one day but is
traded ex-dividend the next, the dividend is considered in computing
the change.
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