International Dictionary of the Securities Industry

Frontmatter

A

Abstract

‘AAA’ or ‘Triple A’ rating (US). The highest rating awarded to PREFERRED STOCK by credit rating agencies such as Standard and Poor’s Corporation. Such agencies also tend to rate bonds similarly and to have an additional classification for common stocks (ordinary shares). See also STANDARD AND POOR’S RATINGS; MOODY’S.

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B

Abstract

baby bond (US). A bond with a nominal value lower than the conventional amount of $1000.

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C

Abstract

cabinet bid. A facility in a TRADED OPTIONS market whereby, when no tangible value applies to a deep OUT-OF-THE-MONEY OPTION, the holder may dispose of contracts to a market maker at a nominal price per contract (of 1p in the United Kingdom).

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D

Abstract

Dachgesellschaft (Ger). See HOLDING COMPANY.

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E

Abstract

early deposit (UK). The deposit with the TALISMAN settlement centre of stock by selling brokers in advance of settlement day. The stock is held in trust until delivery on the settlement day.

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F

Abstract

face value. Sometimes referred to as nominal or PAR value, face value is the term used to describe the value of a bond in terms of what the company will repay when the loan matures.

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G

Abstract

gain Increment, as in capital gain, the increase in the capital value of an investment.

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H

Abstract

haircut. The percentage of a securities dealer’s position which must be deducted from current valuations to calculate the net capital position. Thus a well traded equity might have a haircut of (say) 20 percent if it is a well-traded security in a good liquid market, but the haircut may be much higher if the security is in a small and risky company.

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I

Abstract

ICONS. See INDEXED CURRENCY OPTION NOTES.

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J

Abstract

Jahresabschluss (Ger). Annual accounts.

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K

Abstract

Kaffirs. The name given to South African gold mining stocks. At one time the main market in such shares was in London, and although Johannesburg and even New York now trade extensively in them, a major market still exists in London, where a considerable number of these stocks are listed.

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L

Abstract

laggard. A share, the price of which is performing badly against the rest of the market. Compare with LEADER (2).

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M

Abstract

mainstream Corporation Tax (UK). See CORPORATION TAX.

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N

Abstract

Naamloze Vennootschap (NV) (NL). The most common type of organization for a company whose shares are traded on the Amsterdam Stock Exchange. Similar in concept to the British PUBLIC LIMITED COMPANY.

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O

Abstract

obbligazione (It). see DEBT.

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P

Abstract

pacchetto (It). A BLOCK of shares.

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Q

Abstract

qualified accounts. A set of published accounts of a company which have not been given a wholly satisfactory report by the company’s auditors. In the United Kingdom, the normal unqualified wording from the auditors to the shareholders is that the auditors have examined the accounts of the company under the relevant accounting conventions and that they give a ‘true and fair view of the state of affairs of the company’ in accordance with the Companies Acts’ provisions.

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R

Abstract

raccattore (It). To build up a holding of shares bit by bit in order not to influence prices.

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S

Abstract

sacrificare (It). To sell a security just before a sudden and unexpected price rise and therefore obtaining a lower price than could have been achieved with a bit of patience.

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T

Abstract

Tafelgeschäf (Ger). Transactions made at the counter of a bank rather than on a stock market. See OVER-THE-COUNTER MARKET.

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U

Abstract

Übernahmeangebot (Ger). See TAKE-OVER BID. Sometimes also means the price offered by the bidder.

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V

Abstract

valeur (Fr). The literal meaning is ‘value’; the prices or values of securities listed on a stock exchange and, by extension, the securities themselves.

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W

Abstract

Wachstumswerte (Ger). See GROWTH SHARE.

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X

Abstract

XA (UK). Abbreviation for ‘ex all’, meaning that a share deal has been made in which the buyer has bought the share without the right to any of the benefits currently announced, such as a DIVIDEND, RIGHTS ISSUE or SCRIP ISSUE.

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Y

Abstract

Yankee bond (US). A dollar denominated issue made by an overseas issuer to attract American investors.

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Z

Abstract

Z account (UK). A type of account opened by the Bank of England to allow large dealers in the gilt-edged market, such as MARKET MAKERS, insurance companies and a few others, to register transfers of stock quickly. The account is a privilege granted to major dealers in the market in order to assist dealing and liquidity.

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