7/31/2019 Important Stock Exchange Terms

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IMPORTANT STOCK EXCHANGE TERMS

Tele stock: It is a computerized system for telling stock prices and works on a telephone line. If you wan to know the

price of any share, dial the specified telephone number for tele stock and then dial the code of the desired company to

know the current price of its share. Blue Chip Stocks: Stocks of leading and nationally known companies that offer a

record of continuous dividend payments and other strong investment qualities. Capital Gain or Loss: Profit or loss

resulting from the sale of shares or certain assets classified under the federal income tax legislation as capital assets. This

includes stocks and other investments such as investment property. Brokerage: Commission paid by a company to a

stock broker for securing applications for its shares. Arbitrage: The simultaneous purchase of a security on one stockmarket and the sale of the same security on another stock market at prices which yield a profit. Sub under writing &

over riding commission: The additional commission paid to the first underwriter if he arranges a sub underwriter. The

agreement between the underwriters reduces the burden of first underwriter. Assignment: The notification to the seller

of an option by the clearing corporation that the buyer of the option is enforcing the terms of the option's contract.

Volatility: A statistical measure of changes in price over a period of time. Warrant: A security giving the holder the

right to purchase securities at a stipulated price within a specified time limit. Exercise of the warrant is solely at the

discretion of the holder. Warrants are not exercisable after the expiry date. Writer: The seller of an option. The writer

has an obligation associated with the contract to either purchase or sell a specified number of shares at the strike price on

or before expiry. To write an option is to sell an option. Futures: Contracts to buy or sell securities(commodity of

specified quality and quantity, at a specified price) at a future date. Margin: A frectional amount of full value, or theoutlay (down payment) required for an investment in securities purchased on credit. Margin stock: Any stock listed on

a national securities exchange, any over-the-counter security approved by the SEC for trading in the national market

system, or appearing on the Board's list of over-the-counter margin stock and most mutual funds. Call: An option tha

gives the holder the right to buy the underlying asset. Bear market: Any market in which prices exhibit a declining

trend. For a prolonged period, usually falling by 20% or more. A market in which stock prices are falling. Bid: 1.An

offer by an investor to buy a security. 2. The highest price a potential buyer is willing to pay for a security. See also: Ask

Bid-ask spread. 3 The price that a potential buyer is willing to pay for a security. Bull: An investor who believes that the

market or a security will rise and makes investment decisions accordingly. Bull market: Any market in which prices

are in an upward trend. Contract: A unit of trading for a financial or commodity future. Also, the actual bilatera

agreement between the buyer and seller of a transaction as defined by an exchange. Floor broker: Member of an

exchange who is an employee of a member firm and executes orders, as agent, on the floor of the exchange for clients. Amember of a securities exchange who executes orders on the exchange floor. For example, commission brokers and two

dollar brokers are floor brokers. Floor trader: A stock exchange member who generally trades only for his own accoun

or for an account controlled by him, or who has such a trade made for him. Future: A term used to designate any

contract covering the sale of financial instruments or physical commodities for future delivery on a futures exchange

Alternatively, a future is any forward contract that has been standardized and listed for trading on a futures exchange

Contracts to buy or sell securities at a future date. Hedge: A strategy used to limit investment loss by making a

transaction that offsets an existing position. A transaction that reduces the risk of an investment. Secondary Market

The market for all investors in a security, except for the first ones to whom a new issue of a security is sold. The

secondary market consists of all sellers and buyers, except for the issuer and the first group of investors who bought the

issue. The market in which existing securities are traded among investors through an intermediary. The market in whichsecurities are traded after they are initially offered in the primary market. Par value: Also called the maturity value or

face value; The amount that an issuer agrees to pay at the maturity date. The amount of money stated on a bond or (rarely)

a stock certificate. A security's nominal face value. Principal: 1.The total amount of money being borrowed or lent. 2

The party affected by agent decisions in a principal-agent relationship. 3. The amount that one borrows. Sinking fund

1-A fund to which money is added on a regular basis that is used to ensure investor confidence that promised payments

will be made and that is used to redeem debt securities or preferred stock issues. 2- A fund or account into which a person

or company deposits money on a regular basis in order to repay some debt or other liability that will come due in the

future.

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