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Elliott Wave Theory


After-hours Deal: The stock market usually closes at 4:00pm. After this scheduled time, deals can also be made but the transaction is dated the next day, known as an after-hours deal.

Arbitrage: The simultaneous purchase of a security on one stock market and the sale of the same security on another stock market at prices which yield a profit.

Beta: A measurement of the relationship between the price of a stock and the movement of the whole market.

Bargain: Regarding sale or purchase in the stock market, bargain is a common word.

Bearer Stocks: This is the stock that is unregistered with the owner’s name.

Bid Price: This term indicates the sale price of stocks or shares.

Blue Chip: These are shares of big and reputed companies.

Bull: A person who considers the share price of the stock exchange to be on the rise.

Bear: A person who considers the share price of the stock exchange to be on the fall.

Capital: The amount of money used for setting up a new business.

Cum Dividend: These are shares that are sold, allowing the buyer to receive the following dividend.

Call Option: An option which gives the holder the right, but not the obligation, to buy a fixed amount of a certain stock at a specified price within a specified time. Calls are purchased by investors who expect a price increase.

Dealing: This means the purchase and sale of shares.

Debenture: The stock that a company issues which are backed by assets.

Dividend: The part of the company’s profits which is usually distributed to company’s shareholders, normally on regular basis.

Equities: These are the ordinary shares. They are different from debenture and also from loan stock.

Ex-dividend: The share which is bought without any right for receiving the next dividend. This is usually retained by sellers.

Earnings per Share:  The amount of profit each share of a company is entitled to.

Final Dividend: This is the dividend which is declared according to the company’s annual results.

Futures: Contracts that allow any holder the legal right to buy or sell Indexes and Commodities in the future at a price set today.

Gross: The interest paid without deducting of tax.

Going Public:  Slang for when a company is planning an IPO.

Hedge: This means to insure the risk.

IPO: Short for Initial Public Offering. An IPO is when a company sells stock in itself for the first time.

Insider Trading: There are two types of insider trading. The first type occurs when insiders trade in the stock of their company. Insiders must report these transactions to the appropriate securities commissions. The other type of insider trading is when anyone trades securities based on material information that is not public knowledge. This type of insider trading is illegal.

Initial Public Offering: The issue of new shares by a previously private company as it becomes a public company.

Limit Order: This is an order to any stockbroker specifying any fixed price limit.

Limit Order: An order to buy or sell stock at a specified price. The order can be executed only at the specified price or better. A limit order sets the maximum price the client is willing to pay as a buyer, and the minimum price they are willing to accept as a seller.

Margin Account: A client account that uses credit from the investment dealer to buy a security. A client needs to deposit a margin amount with the balance advanced by the investment dealer against collateral such as investments. The investment dealer can make a margin call, which means the client must deposit more money or securities if the value of the account falls below a certain level. If the client does not meet the margin call, the dealer can sell the securities in the margin account at a possible loss to cover the balance owed. The investment dealer also charges the client interest on the money borrowed to buy the securities.

Market: The place where buyers and sellers meet to exchange goods and services. It also represents the actual or potential demand for a product or service.

Market Capitalization: The number of issued and outstanding securities listed for trading for an individual issue multiplied by the board lot trading price. Should a trading price not be available, a bid price, a price on another market, or if applicable, the price for an issue of the same issuer which the first issue is convertible into, may be used. Total market capitalization for a market is obtained by adding together all individual issue market capitalizations (warrants and rights excluded). Escrowed shares are excluded from TSX Venture market capitalization.

Market Maker: A trader employed by a securities firm who is required to maintain reasonable liquidity in securities markets by making firm bids or offers for one or more designated securities up to a specified minimum guaranteed fill. Market makers for the stock of issuers listed on Toronto Stock Exchange are referred to as Registered Traders.

Mutual Fund: A fund managed by an expert who invests in stocks, bonds, options, money market instruments or other securities. Mutual fund units can be purchased through brokers or, in some cases, directly from the mutual fund company.

Market CapThe amount of money you would have to pay if you bought ever share of stock in a company.  [To find out what it is, multiply the number of shares by the price per share.]  Short for Market Capitalization.

Offer Price: Refers to the specific price at which one can buy stocks and shares.

Options: The term means the right to purchase (call option) and sell (put option) a particular share at a particular price within a particular period.

Ordinary Share: This is a share where the dividends usually vary in the amount.

Over the Counter Market (OTC): Refers to a marketplace outside the main stock market.

Portfolio: A selection of shares usually held by a person or fund.

Proxy: Anybody who votes on another person’s behalf if the person is unable to attend a shareholders’ meeting.

Share:  A share represents an investor's ownership in a "share" of the profits, losses, and assets of a company.  It is created when a business carves itself into pieces and sells them to investors in exchange for cash.

Ticker Symbol:  A short group of letters that represents a particular stock [e.g., "Coca Cola" is referred to as "KO"].

Underwriter:  The financial institution or investment bank that is doing all of the paperwork and orchestrating a company's IPO

Yield: The gross dividend presented as the percentage of the share price.


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