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GLOSSARY

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Term Definition
Dealer

An individual or firm in the securities industry who buys and sells securities as a principal rather than as an agent. The dealer's profit or loss is the difference between the price paid and the price received for the same security.

Author: NYSE & Euronext
Hits: 277
Delta

A ratio that measures an option's price movement compared to the underlying interest's price movement. Delta values have a range of 0 to 1. Deep in-the-money options have deltas that approach 1.

Author: TMX Group
Hits: 241
Derivatives

Financial instrument that allow investors to transfer risks by buying, selling or exchanging underlying assets at a an agreed price and future delivery date. The most common derivatives are futures, options, warrants and swaps.

Author: WFE
Hits: 242
Dividend

Financial instrument that allow investors to transfer risks by buying, selling or exchanging underlying assets at a an agreed price and future delivery date. The most common derivatives are futures, options, warrants and swaps.

Author: WFE
Hits: 243
Dividend Yield

The dividend yield expresses the dividend as a percentage of the current market price of the shares. The gross dividend is used in this calculation, i.e. before deduction of any withholding tax.

Author: SIX Swiss Exchange
Hits: 289
Earnings Per Share (EPS)

Ratio calculated by dividing after-tax net income by the total number of shares outstanding. Shows the portion of a company's profit allocated to each outstanding share of common stock.

Author: Amman Stock Exchange
Hits: 283
Equity

See Share.

Hits: 225
Ex Dividend

The holder of shares purchased ex dividend is not entitled to an upcoming already-declared dividend, but is entitled to future dividends.

Author: TMX Group
Hits: 295
Exchange

An exchange is a regulated market in which companies and governments can raise funds by issuing securities and where the supply of securities meets the demand. Derivatives exchanges allow investors to manage risk. Exchanges play an essential and central role in the world's economy. They epitomize transparency in the price-formation process, informing investors and disseminating vital information for the functioning of financial markets, and in doing so they represent an important source of capital for nascent and established companies alike.

Author: WFE
Hits: 239
Exchange Traded Fund (ETF)

ETFs are portfolio investment products that are admitted to listing or trading on a regulated exchange. An ETF provides investors with exposure to a diversified basket of shares or other financial instruments. ETFs aim to replicate the performance of a specific index; this index can be a blue chip, a regional, or a sector index. The index type is not just limited to shares and may include bond indexes and other types of sophisticated index. ETFs are traded in the same way as any other share. These instruments can be used by investors as a hedging tool or as an investment product.

Author: WFE
Hits: 289
Exercise

Notification by the buyer (taker) of an option or warrant of their decision to buy or sell the underlying asset or in the case of cash settled contracts to receive a cash payment.

Author: Australian Securities Exchange
Hits: 251
Exercise price

Price at which the taker (buyer) of an option or warrant may buy/sell the underlying asset. Also known as the strike price.

Author: Australian Securities Exchange
Hits: 312
Face value

This is the value of the bond or security as printed on the document. The face value represents the amount that the issuing company promises to pay at the time of maturity.

Author: London Stock Exchange
Hits: 288
Fill-or-Kill Order

An order that requires execution of the entire quantity immediately. If this order cannot be executed, it is cancelled. Also called Immediate or Cancel (IOC) in some markets.

Author: Amman Stock Exchange
Hits: 294
Free Float

Free float is that portion of a company's overall share capital that is not "locked up" in firm hands (e.g. the founder or his/her family, the company's management, certain institutions, etc.). Free float represents those shares that can be traded on the exchange at any time. Small shareholdings of private investors are also counted as free float, even though those shares are in firm hands.

Author: SIX Swiss Exchange
Hits: 270