Limit Order
An order that stipulates the price at which a market transaction can be executed. The maximum price is stipulated for a buy order and the minimum for a sell. Limit orders are normally valid for a certain time specified by the client. They can also be Good Till Cancelled (GTC), remaining valid until the limit is reached and the order is executed, or until the order is cancelled
Straddle
An option strategy involving one call and one put with the same strike and same expiry date. The strategy allows the buyer to take advantage of large price movements in either direction, by exercising the call in a rising market and the put in a falling market. The risk is that prices move only slightly and the change is not enough to cover the costs of the two options.
Squeeze
When prices are being forced up or down as investors rush to cut their losses. A short squeeze is when prices rise sharply as investors cover short positions by buying shares. A squeeze is also used to describe when any commodity is in short supply or a period when monetary policy is tight.
Conditionality
Economic conditions imposed on a country when it draws funds from the IMF (International Monetary Fund). The conditions often spell out requirements for economic policy, government spending and taxation and exchange rate policy.
Payout Ratio
The proportion of a company's net profits that is paid out to shareholders in cash dividends. The ratio is calculated by dividing the total cash dividends by the company's earnings in the same period.
Forecast
A projection of current trends using existing data. Forecasts are widely used by business and financial planners, economists and stock market analysts. Analysts' forecasts include price levels, company earnings and economic indicators.
Bed and Breakfast Deal
The sale of a share and its repurchase shortly after the beginning of a new tax year. This allows shareholders to register a capital loss or profit for tax purposes while retaining ownership of the shares.
Firm Order
An order to buy or sell a share that can be executed without further confirmation. It can also mean a commercial order of goods which cannot be cancelled.
Laffer Curve
A description of the theoretical effect of different tax rates on total tax income. Total government income rises as tax rates rise from low levels, but from a certain rate upwards the total income starts to fall because taxpayers do not have an incentive to work hard and increase their incomes. Named after Professor Arthur Laffer, an advisor to President Ronald Reagan in the 1980s, this theory is a building block in supply-side economics
Unlimited Liability
Where no restriction applies to an owner's losses in a business. In contrast with limited liability where the loss to owners, or shareholders, is limited by law to the amount of capital they have invested.
Laffer Curve
A description of the theoretical effect of different tax rates on total tax income. Total government income rises as tax rates rise from low levels, but from a certain rate upwards the total income starts to fall because taxpayers do not have an incentive to work hard and increase their incomes. Named after Professor Arthur Laffer, an advisor to President Ronald Reagan in the 1980s, this theory is a building block in supply-side economics
Takeover Bid
The initial offer by a predator company for another. The bid can be in cash, shares or a combination. Bids usually have a closing date for acceptance. The bid can be hostile (without the acceptance or cooperation of the target company), or friendly (accepted by the target).
Basis
The difference between futures prices and the corresponding underlying cash price. Basis is normally quoted as cash price deducted from futures price of the nearest delivery month. There is a high degree of correlation between cash and futures prices but the basis is not constant. A basis trade exploits the expected movements in basis. Basis is likely to reduce and eventually to shrink to nothing as the futures contract approaches its expiry date.
Secondary Offering
Offering to the public of a large block of privately held shares, often by the institution that sponsored the overall deal into the market.
Specifications
Refers to properties of a given crude oil or refined petroleum product. Properties are specified because they often vary widely, even within the same grade of product. The properties affect the price and end-use of the crude or petroleum product.
Early Exercise
When a security or option is exercised before its due maturity date. American-style options can be exercised at any time, allowing early exercise. European-style options can be exercised only at the maturity date.
FTSE 100
The FTSE 100 is the benchmark index for equity prices on the London Stock Exchange. Known as the 'Footsie' it comprises 100 of the largest UK stocks, by market capitalization, accounting for about 70 percent of stock turnover. The FTSE is a capitalization-weighted index and is the basis for index futures and options contracts traded on LIFFE.
国际互换和衍生产品协会
英文The International Swap and Derivatives Association的缩写，是衍生产品场外交易(OTC)市场的国际性行业组织,为讨论业内问题和促进最佳作业方式的论坛。网址：www.isda.org
ISDA
An international trade organization for the over the counter, or privately negotiated, derivatives markets. It acts as a forum to discuss industry issues and promotes best practice within the derivatives business.
Undercapitalized
Term used when a business is not supplied with enough funds by its owners to support its activities and provide for any needed expansion.
Bushel
A measure of volume. In the UK, it equals 8 imperial gallons or 36.4 litres for corn, fruit, liquids, etc. In the US it equals 35.3 litres. The weight of a bushel varies according to the commodity involved.
Basel Committee
A committee of the Bank for International settlements that formulates broad supervisory standards for best banking practice and supervision, including setting the minimum capital standards for banks.
MIGA
The Multilateral Investment Guarantee Agency. An affiliate of the World Bank, the agency was created in 1988 to offer political risk insurance guarantees in emerging economies in order to help them attract and retain private investment.www.miga.org
Puttable
A bond is described as puttable, or having a put feature, when the holder has the right to sell the bond back to the issuer at a specific date before maturity. The repurchase price, which may be at par, premium or discount, is specified at the time of issue.
