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Glossary

A
Glossary Items beginning with A
A designation is a short identifier, usually a few letters long, such as a child's initials for example, that marks the shares on the Registrar's records as a separate account.
Ad-Server
Ads that are shown on a web site are placed on a server. Ad-server guarantees an independent measurement of a web site's achievement.
AGM
Annual General Meeting. The annual meeting where shareholders formally approve the director's actions on their behalf during the past financial year and adopt the Annual Report and Accounts. It is also the meeting at which directors may retire and are formally appointed.
AIM
Launched in June 1995 the Alternative Investment Market (AIM) allows companies that cannot or do not wish to meet the full listing requirements to go public. There are more than 1900 companies quoted on AIM. The companies are required to supply less information than is necessary for the full listing and the number of shares available for trading may be fewer.
Alternative Investment Market
See AIM
Annual General Meeting
See AGM
B
Glossary Items beginning with B
Banner
Short for 'banner advertisement'. A graphic or image used for advertising on the Internet.
Bear
A person who expects prices of shares, and consequently the value of the Stock Market itself, to fall.
Bid Price
The price in the market which a prospective buyer is prepared to pay (BID) to acquire the share. The lower value of the prices in the Bid to Offer spread. The price received when the shares are sold.
Blue Chip
The largest companies traded on the Stock Exchange. The constituents of the FTSE 100 Index of largest companies. The most highly valued and reputable companies on the Stock Exchange.
Bonds
Bonds & Fixed Interest Bonds are effectively loans made by the government or corporations to fund spending or raise capital. They are issued for a specified redemption value at a fixed date in the future and provide the holder with regular interest payments until that time. The value of a bond will generally depend upon the outlook for inflation and interest rates, as well as the underlying security of the issuer. Bonds issued by the UK Government (gilts) are generally regarded as very low risk and are sometimes referred to as ‘gilt edged securities’. Bonds issued by corporations may be less secure and so the issuer may have to pay a higher rate of interest to attract Investor’s capital.
Bonus Issue
The issue of new shares to an existing shareholder, but at no extra cost. A means for the company to distribute historic retained profits to shareholders.
Brokers' Forecast
Brokers estimate the future performance of a company usually based on key indicators: Pre-tax profit, EPS and DPS. Two future year estimates are shown for each company (the current and next financial period). These figures are used to calculate the forecast consensus of all brokers for an individual company.
Broker's Note
The document recording the details of an investor's dealing transaction.
Browser
Browsers are software programs, installed on your machine that enable you to view web pages and help you to move through the web. Netscape® Navigator and Microsoft® Internet Explorer are the main browsers, and are considered the industry standards.
Bull
A person who expects the price of shares, and consequently the value of the Stock Market itself, to rise.
C
Glossary Items beginning with C
Capital Growth
Where the price of your shares rise in value. Put simply, selling them would result in you having more capital than you had when you originally purchased them.
Clickthrough
When a visitor clicks on a banner and is led through to an advertiser's web site
Close Period
The period, generally of two months, prior to the company's release of its Interim or Preliminary results, when the directors are not permitted to trade in the shares of the company.
Company
The separate legal entity in which an investor is able to acquire a share stake, representing his part ownership of a business.
Contract Note
See Broker's Note
Cookies
Small files that are downloaded on a computer from a web site to a visitor's PC. Cookies hold information that can be retrieved by other web pages on the site.
Covered Warrant
A covered warrant is a derivative issued by a financial institution. It gives the holder the right, but not the obligation, to buy (call) or sell (put) an underlying asset which could be a share or bond or index at a specified strike price during or at the end of a specified time period.
CPM
Cost per mille, or costs per thousand impressions. A way to price banner adverts.
CUM
The normal status for buying the company's shares with all normal rights to future dividends and share issues. Also see EX.
D
Glossary Items beginning with D
Dividend
A company that is making a profit often keeps a portion of its earnings to reinvest in the future of its business. The remaining profits will normally be given back to the owners fo the company, its shareholders, as a dividend payment. The dividend is often paid in two or more instalments over the year. The initial payments are called ‘interim dividends’ and the remainder, paid as the ‘final’ dividend.
DPS
Dividend per share.
E
Glossary Items beginning with E
Earnings
The profit earned by the company during the financial period, which is available to pay dividends. Usually expressed on a per share basis as Earnings per Share (or EPS) and used as the key element of the Price Earnings Ratio (or PER or P/E Ratio) in judging comparative values.
EGM
Extraordinary General Meeting. A meeting of shareholders to discuss and approve special matters proposed by the directors, such as approval of a take-over, or major acquisition.
Employee Stock Ownership Plan (ESOP)
A trust established by a company for the allocation of some of its shares to its employees over time, intended to motivate employees, and often providing tax benefits to the company. Also called stock option plan or stock purchase plan.
Encryption
Information is 'scrambled', therefore making it unreadable, which means it can be sent confidentially over the internet. Decryption is the reverse of encryption - i.e. turning 'scrambled' information into a readable form.
EPS
Earnings per share.
Equity
The voting capital in the company, represented by the ordinary shares.
EX
Used to indicate that the share is currently available in the market with a lack of certain specific rights and conditions. This might be ex dividend (or XD) where a purchaser is not entitled to the next declared dividend, or ex rights (or XR) where the holder is not able to participate in a proposed new share issue by the company to existing holders on preferential terms. Also see CUM
Exercise
To implement the rights of an option, by buying (in the case of call options) or selling (in the case of put options) the underlying asset.
Extraordinary General Meeting
see EGM
F
Glossary Items beginning with F
Final Results
The announcement and publication of the company's financial results for its latest business period, or financial year, in the form of the Annual Report and Accounts. See also Prelims.
Flipping
The practice by some institutional investors of buying initial public offerings at the offering price and then reselling them to retail investors once trading has begun, usually for a substantial profit.
Fixed Interest Securities
Securities issued by a company, government (known as Gilts in the UK) or local authority, where the amount of interest to be paid each year is set on issue.
FSA
(Financial Services Authority) An independent non-governmental body, which exercises statutory powers under the Financial Services and Markets Act 2000.
FTSE 100
100 most highly capitalised blue chip companies, representing approximately 80% of the UK market.
FTSE All Share
Representing 98-99% of the UK market capitalisation, FTSE All-Share is the aggregation of the FTSE 100, FTSE 250 and FTSE Small Cap Indices.
FTSE Eurotop 100
100 most highly capitalised blue chip companies in Europe.
FTSE 250
Comprised of mid-capitalised companies, not covered by the FTSE 100, representing approximately 14% of UK market capitalisation.
Fund Manager
A professional investor, typically in an insurance company, pension fund, investment and unit trust.
G
Glossary Items beginning with G
Gilts
Gilts or gilt-edged securities are loan stock issued by the UK Government, a bond is a fixed interest security issued as a debt to be repaid at a future date.
I
Glossary Items beginning with I
In the Money
Situation in which an option's strike price is below the current market price of the underlier (for a call option) or above the current market price of the underlier (for a put option). Such an option has intrinsic value.
Initial Public Offering
(IPO) The first time a company sells stock to the public. An Initial Public Offering is a type of a primary offering, which occurs whenever a company sells new stock, and differs from a secondary offering, which is the public sale of previously issued securities, usually held by insiders.
Institutional Investor
Entity with large amounts to invest, such as Investment and Unit Trusts, Insurance companies, Pension Funds, Investment Banks and Endowment Funds. Institutional investors are covered by fewer protective regulations because it is assumed that they are more knowledgeable and better able to protect themselves. They account for a majority of overall volume traded and the value of shares held. Also see Fund Manager.
Interim
The results covering part of the company's financial year, usually the first six months, and the dividend paid to shareholders for that period.
Internet User
Someone who has used an online Internet function.
Investment Manager
See Fund Manager
Investment Trusts (ITs)
A closed-end fund. These funds have a fixed number of shares that are traded on the secondary markets. The market price may exceed the asset value per share, in which case shares are selling at a premium. When the market price falls below the Net Asset Value, shares are selling at a discount. Many closed-end funds are of a specialised nature, the portfolio represents a particular industry or country.
Investor Relations
A department within a public company that distributes information about the company and its financial performance to existing and potential shareholders.
IP Address
A unique address given to every computer to determine its location.
IPO
See Initial Public Offering
IR
see See Investor Relations
L
Glossary Items beginning with L
Limit order
An order to buy shares up to a maximum price or sell shares subject to a minimum price.
Lock In Period
The time period after an IPO when insiders at the newly public company are restricted by the lead underwriter from selling their shares. Usually lasts 180 days.
M
Glossary Items beginning with M
Market Capital
The total Stock Market value of the company's shares, being the total number of shares issued to shareholders multiplied by the current share price.
Market Maker
The Stock Exchange firms that a stockbroker deals with in completing a transaction. The market middleman from whom you buy, or to whom you sell, the shares in the company.
Market Price
The price at which the share can currently be traded in the market.
Market Value
See Market Capital
Merger
The arrangement by which two companies unite without one attaining direct control over the other.
Mid Price
The normal price quoted in the press for the company's shares, being the mid point in the Bid and Offer spread.
N
Glossary Items beginning with M
New Issue
Same as an IPO or placing.
Nominee
A person, or company, in whose name the shares are held, but who holds them on behalf of the actual shareholder. A means of preserving anonymity of the actual shareholder and for institutional investors to centralise the administration or individual holdings of their clients
NPV
No Par Value, being a class of share that does not have a designated face value. See also Par Value.
O
Glossary Items beginning with O
Offer Price
The price in the market which a prospective seller is prepared to accept to sell the shares. The higher of the prices in the Bid to Offer spread. The price paid when you buy the shares and the existing shareholder accepts the OFFER to buy them.
Option
The right, but not the obligation, to buy (for a call option) or sell (for a put option) a specific amount of a given stock, commodity, currency, index, or debt, at a specified price (the strike price) during a specified period of time. For stock options, the amount is usually 100 shares. Also called option contract.
Ordinary Share
The main class of share capital representing the owner's interest in the company.
Oversubscribed
Defines a deal in which investors apply for more shares than are available. Usually a sign that an IPO is a hot deal and will open at a substantial premium.
P
Glossary Items beginning with P
Page
Multimedia document, consisting of files delivered by one or more servers, and presented in the user's browser window. Files are presented in one or more frames.
Page Impression
User's action to call a page. It should be differentiated from a 'request', which is a request to a search engine or a directory.
Pageviews
A measure of how many times a complete page is displayed.
Par Value
The original face value of the company's shares. It has no relevance to either the current share price market value or the asset value.
PER
This expresses the current share price (P) as a multiple of the earnings per share (E). The P/E ratio is used as a measure of how much the investor is being asked to pay for the investment. It is a means of assessing both the value of the company and also its comparative value and attraction compared to other companies.
P/E Ratio
See PER
Placing
A means of raising new capital by entering into an arrangement with major investors who agree to acquire a specified number of new shares.
Portfolio Manager
See Fund Manager
Preference Shares
Similar to ordinary shares but preference shares normally pay a fixed dividend and rank ahead of ordinary shares for dividend and in a company liquidation.
Prelims
The Preliminary Announcement, being the initial report to the Stock Exchange of the company's financial results for the year.
Premium
The difference between the offer price and opening or current price during a new issue of shares through an IPO or rights issue.
Price Earnings Ration
See PER
Private Company
A company whose shares are not traded on the open market. Opposite of public company.
Private Investor
An individual who purchases securities for him/herself, as opposed to an institutional investor. Also called individual, small investor or retail investor.
Prospectus
The document, issued at the time of the initial issue of shares to the public, which explains all aspects of a company's business, including financial results, growth strategy, and risk factors.
Public Company
A company which has shares that investors are able to acquire in the open market.
R
Glossary Items beginning with R
Request
Finding a page or site through the use of a search engine or a directory.
Retail Investor
See Private Investor
Reverse Acquisition
A technique used by a private company to go public without jumping through all the regulatory hoops that going public usually requires. The private company acquires majority ownership in a publicly listed company that has no assets or liabilities (called a shell), changes the company's name, and installs its management and board of directors.
Reverse Takeover
See Reverse Acquisition
Rights Issue
A means of raising new capital whereby existing shareholders agree to buy new shares at an agreed price, which will normally be at a discount to the current market price.
Road Show
A tour taken by a company preparing for an IPO in order to attract interest in the deal. Attended by institutional investors, analysts, and money managers by invitation only. Members of the media are forbidden.
S
Glossary Items beginning with S
Script Issue
See Bonus Issue
Search Engine
Facility to enable internet users to search the world wide web to find specific pages or sites.
Securities
The term used for any financial instrument issued by the company and traded on the Stock Exchange.
Share
Representing one unit of ownership in a company.
Share Certificate
The document that records the shareholder's stake in the company. An indication of ownership to be returned on the sale of the holding.
Share Option
See Option
Shareholder
A person, institution or company who owns shares in a company or mutual fund. For company shareholders along with the ownership come a right to dividends and the right to vote on certain company matters, including the board of directors. Also called stockholder.
Shell
A company with no real assets or operations.
Site
A specific group of pages.
Spread
The difference between the Bid and Offer prices.
SSL
SSL is short for Secure Sockets Layer and is a security protocol (a set of detailed rules, sequences, message formats and procedures that computer systems use and understand when exchanging data with each other).
Stock
An instrument that signifies an ownership position, or equity, in a corporation, and represents a claim on its proportionate share in the corporation's assets and profits. Also called equities or equity securities or corporate stock. See also share.
Stock Exchange
A Market on which shares or other securities are bought and sold. Examples include the London Stock Exchange (or LSE) and AIM.
Stockholder
Taking the traditional definition, stockholders are lenders and are accounted among the company's creditors. Interest on stocks must be paid ahead of any dividend to shareholders. Share or equity capital is money permanently supplied in exchange for a stake in the ownership of the business. See also shareholder.
Stop loss
A stop loss is a simple concept designed to limit losses on shares. The investor simply gives specific instructions
T
Glossary Items beginning with T
Takeover
When one company approaches another company, making an offer to the latter's shareholders, seeking to acquire their shares in sufficient quantities to take control. If the company that is being taken over is listed on the Stock Exchange, a strict protocol of rules and regulations exist to protect the interests of shareholders. A time limit is set for acceptance of the offer. If the company making the offer gains control of 90% or more of the shares, it has a legal right to acquire the remaining 10% of the shares at the offer price. A take-over bid may be friendly, recommended by the board of the company being taken over, or it may be hostile, rejected by the board with the company making the offer going direct to shareholders.
U
Glossary Items beginning with U
Unique Visitors
Same as visitors. This indicator has been used to indicate that the site is endeavouring to recognise visitors from one visit to the next and to differentiate this from visits.
Unit Trusts
Open ended investment funds where the money is invested in a greater variety of stocks. Each investor owns a number of units the value of the Fund depends on the value of the assets owned by the trust. Any new investor will be issued newly created units in the trust.
V
Glossary Items beginning with V
Vesting Period
The period of time before shares are owned unconditionally by an employee in an employee stock option plan. If his/her employment terminates before this period ends, the company can buy back the shares at their original price.
Visit
User's interaction with a site within a specified time period. All the pages seen on the same site, during one session. The number of visits cannot be taken as the number of visitors.
Visitors
Individuals consulting the same internet site. The total number of visitors takes account of visit duplication.
W
Glossary Items beginning with W
Warrants
A security that is tradable, and allows the holder the right to subscribe for shares. Client must sign a warrants risk notice before trading. It explains the potential risks of trading in warrants.
Web User
Someone who has visited sites on the world wide web.
Z
Glossary Items beginning with Z
Zero Dividend Preference Shares
Zero dividend preference shares, often called zeros, are simply preference shares that do not pay an annual dividend. They instead simply redeemed for a lump sum at a fixed date. The payout will depend on how the ordinary shares have performed.