Glossary beginning with S

S

Secondary market

When stocks or bonds are traded or resold, they are said to be sold on a secondary market. The majority of all securities transactions take place on a secondary market. See Primary Market

NYSE Euronext

Securities

Transferable certificates of ownership of investment products such as notes, bonds, stocks, futures contracts and options.

TMX Group

Securitized derivative

A securitized derivatives product is a tradable financial instrument designed to meet specific investor needs and to respond to different investment strategies, by incorporating special, non-standard features. These products are in general used for capital protection, hedging against exposure to national or foreign equities, indices variations, commodity and currencies prices, arbitrage strategies, directional trading, etc. Each securitized derivatives product has its own characteristics. They are generally issued by intermediaries different from the issuer of the underlying financial instruments. Securitized derivatives products include different types of instruments such as (but not limited to) covered warrants and certificates.

WFE

Share (Stock)

The authorised share capital of a company is divided into a number of equal parts. Each part is called a share or stock. See Ordinary or Common shares and Preferred shares.

London Stock Exchange

Short

Trader who has sold or who holds a position that will benefit from falling prices.

Australian Securities Exchange

Short Selling

The sale of shares which the seller does not own. This occurs when the seller is anticipating a fall in the stock’s market price at which time he will buy to offset the borrowed shares. He makes a profit on the difference between his short sale and later purchase.

Singapore Exchange

Split

The division of the outstanding shares of a corporation into either a larger or smaller number of shares, without any change in individual shareholder equity. For example, a 2-for-1 split by a company with 1 million shares outstanding and a market price of 100 results in 2 million shares outstanding and a market price is 50. A reverse split would reduce the number of shares outstanding and each share would be worth more.

The Egyptian Exchange

Spread

The difference between the bid and ask prices.

Amman Stock Exchange

Stop Order

Predetermined sell (buy) order at a price below (above) the current price intended to minimise losses in event of further falls (rises).

Australian Securities Exchange

Strike price

See Exercise price.



Swap

Private agreement by which the participants are committed to exchange cash-flows on later dates, specified at the moment of the negotiation. The swap is an instrument used to reduce the financial cost and risk.

Bolsa Mexicana de Valores