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GLOSSARY

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Term Definition
Market Maker

A legal entity that trades for its own account. A market maker must at all times display bid and ask prices, for which minimum quantities and maximum spreads are defined instrument by instrument. A market maker must also meet minimum volume requirements in the contract(s) in which it makes a market. In return, market makers pay lower transaction fees.

Author: NYSE & Euronext
Hits: 484
Market Order

Order to a broker to buy or sell at the current market price at the time the order is given.

Author: Australian Securities Exchange
Hits: 460
MiFID

MiFID stands for Markets in Financial Instruments Directive; or Directive on Markets in Financial Instruments. MiFID has been in force since 1 November 2007. It was drawn up by the European Union with the aim of improving investor protection, increasing competition and harmonising the European financial market. MiFID applies to the EU/EEA Member States and to the financial services providers registered there.

Author: SIX Swiss Exchange
Hits: 437
Mutual Fund

A portfolio of stocks, bonds, or other securities administered by a team of one or more managers from an investment company who make buy and sell decisions on component securities. Capital is contributed by smaller investors who buy shares in the mutual fund rather than the individual stocks and bonds in its portfolio. The return on the fund's holdings is distributed back to its contributors, or shareholders, minus various fees and commissions. This system allows small investors to participate in the reduced risk of a large and diverse portfolio that they could not otherwise build themselves. They also have the benefit of professional managers overseeing their money who have the time and expertise to analyze and pick securities. There are two types of mutual funds, open and closed-ended. Shares in closed-end funds, are readily transferable in the open market and are bought and sold, like other stock. These funds do not accept new contributions from investors, but only reinvest the return on the existing portfolio. Open-end funds sell their own new shares to investors, stand ready to buy back their old shares, and are not listed on exchanges. Open-end funds are so called because their capitalization is not fixed.

Author: NYSE & Euronext
Hits: 446
Net Asset Value (NAV)
The term used to reflect the total value of an investment fund's assets (usually indicated on a per share/unit basis). In determining the net asset value (NAV), the current value of all assets held by a fund are added up and any expenses deducted. The resulting amount is then divided by the number of the outstanding fund shares/units.
Author: SIX Swiss Exchange
Hits: 460
New issue

A stock or bond issue sold by a company for the first time. Proceeds may be used to retire the company's outstanding securities, or be used for a new plant, equipment or additional working capital. New debt issues are also offered by governments.

Author: TMX Group
Hits: 432
Odd Lots

A number of shares that are less than a board lot, which is the regular trading unit decided upon by the particular stock exchange. An odd lot is also an amount that is less than the par value of one trading unit on the over-the-counter market. For example, if a board lot is 100 shares, an odd lot would be 99 or fewer shares.

Author: TMX Group
Hits: 494
Open Order

An order to buy or sell a security that remains in effect until it is either canceled by the customer or executed.

Author: Nasdaq
Hits: 452
Opening Price
Price used as a reference for every stock at the trading session's opening. It can be the closing price of the last session, the adjusted price (in case of the Company using some corporate or buyer right) or the base price stated for the auction trade mode at the beginning of such auction.
Author: Bolsa Mexicana de Valores
Hits: 474
Option

An option is a standardized tradable contract that gives the owner the right to buy or sell a particular underlying asset at a specified date in the future at a pre-determined price. An American style option gives the buyer the right to exercise the option at any time before its expiry whereas European style options can be exercised only on the expiry date. See also Call Option, Put Option and Option Premium.

Author: WFE
Hits: 340
Option Premium

The option premium represents the money paid by buyers to writers of calls or put options.

Author: WFE
Hits: 480
Order

An offer to buy or sell a tradable instrument with a variety of conditions attached regarding the price of execution (See Market Order, Limit Order, Stop Order), expiration instructions (See Open Order, Day Order, Fill or Kill) or quantity instructions (See All-or-None Order).

Author: London Stock Exchange
Hits: 361
Order book

Order Book is an 'electronic book' that shows the demand for the shares of the company at various prices on a real time basis.

Author: Bursa Malaysia
Hits: 460
Ordinary Stock (Share)

See Common Stock (Share)

Hits: 464
Over The Counter (OTC)

Market where securities or derivatives are bought and sold directly between the purchaser and seller. OTC trades are generally negotiated outside of an organized exchange but in some markets OTC trades can be registered on the Exchange. Statistics on OTC dervatives are published by the Bank for International Settlements (BIS).

Author: WFE
Hits: 453