Thursday, January 22, 2009

The term of the Capital Market

  1. Agio / disagio: Values obtained from the difference between a public offering at par value.
  2. Annual Report: Annual Report of the activities of the company, which includes balance sheet, income statement, cash flow statement and statement of changes in equity.
  3. Custodian Bank: Parties serving perform physical observations document storage and exchange.
  4. Bond: Bonds, investments in debt.
  5. Bull market: The market in which prices of a large number of stocks have increased or are expected to increase.
  6. Bear Market: The opposite of Bull Market.
  7. Blue Chip: An example of the most classy of shares in the capital market. These shares are generally owned by established companies with a good financial reputation and stable.
  8. Bonus Share: New stocks issued by the issuer to the holders of old shares from the capitalization of paid-in capital.
  9. Stock Exchange: Sources system party or the means to bring together the buy and sell offers another paties effects in order to trade securities among themselves.
  10. Call: Contract option entitles the holder member the option to buy a certain asset at a specified price and time.
  11. Capital Gain: Profit from the sale and purchase of shares in the form of surplus value from the sale and purchase of shares.
  12. Capital Loss: The opposite of Capital Gain.
  13. Close Position: Exit from the position of a stock or securities. Ex: If a broker asks you to close a long position in a stock, then he asks you to immediately sell the shares earlier.
  14. Day Trader: Players who hold shares in a very short period of time (in minutes / hours) and made several trades in one day. This activity can be categorized as an act of speculation.
  15. Derivative: A securities, such as options and futures contracts whose value depends on the performance of the underlying asset (underlying asset)
  16. DPR (Dividend Payout Ratio): A comparison between the DPS with EPS.
  17. DPS (Dividend per Shares): Represents the total of all dividends are distributed compared to the number of shares outstanding. 
  18. Dividend Yield: The annual dividend per share divided by price per share. Dividend Yield plus percentage capital gain equal to the total return of a Due Diligence.
  19. EPS (Earning per Shares): This is the ratio between net profit after tax by the number of shares issued.
  20. Equity: Ordinary Shares referred to, or securities representing the share / part ownership of the company is quite high.
  21. Going Public: The process of selling its shares to the public, known also by the term IPO.
  22. Greenshoe: An option which gives permission to the underwriter of the IPO shares to sell additional shares to the public / community if the demand for shares.
  23. Hedge: Making an investment to reduce / avoid the risk of asset price movements.
  24. Hedging: Protecting a position in any securities, currencies or other assets.
  25. Index: Measurement statistics of the changes in a stock portfolio that describe / represent the overall market. The Standard & Poor's 500 is one of the best known index, measuring changes in the overall value of 500 shares of big companies in the U.S.
  26. Initial Public Offering (IPO): Usually called going public, is selling its shares by a company to the public.
  27. Investment: Putting funds in financial assets that are expected to increase in value in the future.
  28. Liability: legal liability to pay a debt that was recorded on the balance sheet of a company.
  29. Option: This type of option that could be withdrawn at any time until the maturity.
  30. PER (Price Earning Ratio): This is the ratio between the market price of a stock by EPS.
  31. Portfolio: A group of assets such as stocks, bonds, and mutual funds held by an investor.
  32. Preferred Stock: Stock that has the characteristic combination of bonds and common stock.
  33. Profit Taking: Action took profits, usually occurs when traders sell their shares when the price increases.
  34. Prospectus: The official document that explains in detail about the company as do the stock exchange plans stock offering (IPO), issuing new shares, issuance of rights issue, bonds / debt, etc..
  35. Put: An option contract which entitles the holder member to sell a certain number of shares listed on the option price and time. The opposite of Call.
  36. Return: Gains and losses realized on investments in a given period.
  37. Return on Assets (ROA): Calculated by dividing net income by total assets of the company and shown in percentages. ROA is useful to know the level of profits relative to total assets of the company. In other words, the ROA will give an idea how big the revenue generated from the asset.
  38. Rights Offering: Issuance right to shareholders to purchase additional shares to be issued by the company for a price.
  39. Fried Shares: Shares traded companies generally are not based on fundamentals, but are often traded by the Airport shares for a profit. The characteristics include: a small capitalization, so the stock is easily played by the Big Guys, Gains and losses realized usually high enough, given the high risks as well.
  40. Stagflation: The condition of stagnation in the economy coupled with rising prices.
  41. Stock: The product derived from the asset.
  42. Stock / Equity: Ownership in the company, represented by the number of shares.
  43. Short Sale: A transaction in the market in which a person (investor) selling shares to profit from the loan (as anticipated) decrease in stock price.