Range The difference between the highest and lowest price of a future
recorded during a given trading session.
Recognized investment exchange (RIE) In the UK an exchange authorized by
the Securities and Investments Board and which conforms to Schedule 4 of the
Financial Services Act (1986).
Record date The date on which a shareholder must be registered as the<
owner of shares in order to be entitled to a dividend.
Redemption date The date on which a security (usually a fixed interest
stock) is due to be repaid by the issuer at its full face value. The year is
included in the title of the security; the actual redemption date being that
on which the last interest is due to be paid.
Reduced Size Market-Maker On the London Stock Exchange, a market-maker
concerned primarily with retail-business who has permission to display
prices in reduced sizes on SEAQ.
Report A premium on carrying over a position on a French equity from one
settlement period to the next.
Reverse crush spread The spread between Soya beans and Soya bean products
created by buying Soya bean oil and Soya bean meal futures and selling Soya
bean futures.
Reverse split The reduction in a corporation's outstanding common stock. This is accomplished by replacing outstanding common stock by fewer shares
and increasing the stated or par value per share. The total number of shares
will have the same market value immediately after the reverse split as
before.
Rights issue An offer of securities to existing shareholders by a company
in proportion to their existing holdings.
Ring An area on a trading floor where futures or equities are traded.
Risk factor The risk factor (delta) indicates the risk of an option
position relative to that of the related futures contract.
Rolling over The substituting of a far option for a near option of the
same underlying stock at the same strike/exercise price.
Round lot 1) For stocks, a unit of trading, usually 100 shares. 2) For
futures, an amount of a commodity equal in size to the futures contract for
that commodity.
Round trip Buying and selling of a futures or options contract.
SAEF The London Stock Exchange SEAQ Automatic Execution Facility. SAEF
enables member Firms to enter orders to trade directly via their terminals.
These orders are then automatically executed by SAEF.
Saitori Saitori members of the Tokyo Stock Exchange function as middlemen
in transactions between Regular members. Saitori members cannot trade for
their own account, nor can they accept orders from members of the public.
Scrip issue See Capitalization issue.
SEAQ Stock Exchange Automated Quotation system, an electronic system for
displaying market-makers' quotations in UK quotations admitted to the London
Stock Exchange. SEAQ forms the interface between the market-makers and their
customers allowing the entry and display of bid and ask prices on the SEAQ
system.
SEAQ International The London Stock Exchange's electronic price quotation
system for non-UK equities, similar to SEAQ.
SEC The Securities and Exchange Commission, established by Congress to
protect investors in securities transactions.
Second Marché Second Market of the Paris Stock Exchange. This market is
chiefly intended for medium-sized firms.
Secondary market Trading in a new issue, either over-the-counter or on an
exchange, immediately following its original issuance.
Security Generic name for a stock or share. Stocks are fixed interest
securities and shares are the rest.
SEDOL Code The SEDOL code is the stock code used to identify all
securities issued in the United Kingdom or Eire. The SEDOL code, which is
the basis of the ISIN code for UK securities, consists of a seven-digit
number allocated by the Master File Service of the London Stock Exchange.
Self-regulatory organization (SRO) In the UK a recognized controlling
body which regulates a specified class of investment business.
Seller/grantor Also known as the option writer. The seller of an option
is subject to a potential obligation if the buyer chooses to exercise the
option.
SEQUAL The London Stock Exchange trade confirmation service.
Settlement date The date by which an executed order must be settled and
funds transferred between buyer and seller for a securities transaction.
Settlement price The official closing price for a future set by the
clearing house at the end of each trading day.
Shares See Security.
Short interest The total number of shares of a security sold short.
Short sale The sale of a security or commodities futures not owned by the
seller at the time of the trade. Short sales are usually made in
anticipation of a decline in the price.
SICOVAM code A five-digit code allocated to French securities.
Size 1) The number of shares or bonds which are available for sale. 2) A
term used when there are a large number of shares for sale.
Société des Bourses Francaises This body applies regulations drawn up by
the Conseil des Bourses de Valeurs to market operations of the French stock
exchanges. Its activities include registering trades and listings and
keeping investors informed of transactions.
Sociétés de Bourse Member firms on the French bourses. Sociétés de
Bourse, previously known as Agents de Change, are empowered to conduct trade
in securities and financial instruments, manage private and institutional
portfolios, and set up and manage investment funds. Member firms are also
entitled to deal as principals.
SOFFEX Swiss Options and Financial Futures Exchange, a fully automated
and integrated trading and clearing system.
Specialist A member of a US stock exchange who holds an exclusive
franchise to trade in one or more securities on the exchange floor. The
specialist in return is obliged to maintain a fair and orderly market in the
stocks in which he or she is registered.
Split The division of the outstanding shares of a corporation into,
usually, a larger number of shares.
Spot commodity The actual physical commodity, as opposed to the futures
contract.
Spot month The contract month closest to delivery or expiry.
Spot price The price at which the spot or cash commodity is currently
trading in the spot market.
Spread 1) The difference between the bid and ask price of a security. 2)
The difference between the prices of two related futures contracts. 3) For
options, transactions involving two or more option series on the same
underlying security.
Stag One who applies for a new issue in the hope of being able to sell
the shares allotted to him/her at a profit as soon as dealing starts.
Stammaktie German for ordinary share.
Stillhalter Option Swiss form of covered warrant.
Strike price Also called exercise price. The price at which an options
holder can buy or sell the underlying instrument.
Subscription warrant A type of security that entitles the holder to
purchase a specified number of shares at a fixed price within a fixed or
perpetual time period. The conversion price per share at which the warrants
are exercised is adjusted in the event of a rights issue or a stock split.
Swiss Certificate (Schweizer Zertifikat) Original share certificate of a
foreign company, mainly originating in the United States, the UK or Canada,
which is quoted on a Swiss stock exchange and is registered in the nominee
name of a specified Swiss nominee endorsed in blank. For dividend payments
or participation in corporate actions it must be stamped by the nominee
company.
Swiss Index The new Swiss index family with two major components, SMI,
the Swiss Market Index which comprises 23 blue chips and SPI, the Swiss
Performance Index which comprises all listed and major over-the-counter
stocks.
Tap Stocks UK Government stocks which the Government Broker will supply
at a given price. The price chosen provides a means of influencing interest
rates in general.
Taurus Taurus is the planned electronic system for UK Equities and
corporate bonds to be introduced in 1993 which will permit securities to be
held without certificates and which with TALISMAN will increase efficiency
and speed of settlement of securities transactions by removing the need for
written transfers.
Tender Offer In an offer by tender, buyers of shares specify the price at
which they are willing to purchase.
Termine Price Italian bond market forward price.
Third market In the USA the trading of exchange-listed securities on the
over-the-counter market by non-exchange member broker/dealers and
institutional investors.
Ticker symbol Characters that identify a financial instrument on an
exchange ticker.
Time value That part of an option premium which reflects the length of
time remaining in the option prior to expiration. The longer the time
remaining until expiration, the higher the time value.
Touch The best buying and selling prices available from a market-maker on
SEAQ and SEAQ International in a given security at any one time.
Trade date The date on which a trade occurs.
Transaction The buying or selling of securities resulting from the
execution of an order.
Treasury bills Short-term obligations of a Government issued for periods
of one year or less. Treasury bills do not carry a rate of interest and are
issued at a discount on the par value. Treasury bills are repaid at par on
the due date.
Treasury bonds Government obligations with maturities of ten years or
more.
Treasury notes Government obligations with maturities greater than one
year but less than ten years.
Treasury stock Previously issued stock that has been repurchased by, or
donated to, or otherwise reacquired by the issuing firm. Treasury stocks pay
no dividends and have no voting privileges.
Turnover The total money value of securities traded as calculated by
multiplying price by the number of securities traded.
Underlying security The instrument upon which traded options are listed.
Underwriting An arrangement under which a company is guaranteed that an
issue of shares will raise a given amount of cash, because the underwriters,
for a commission, undertake to subscribe for any of the issue not taken up
by the public.
Unit More than one class of securities trading together as one. E.g. a
stock and a warrant.
Unit trust A fund which raises money from investors and invests it in a
range of securities.
Unlisted securities Securities that are not listed on an exchange.
Unlisted trading privileges The trading of securities not listed on a US
exchange but traded on that exchange at the request of a member of that
exchange, and not at the request of the issuing corporation.
Up tick A transaction executed at a price greater than the previous
transaction.
Valorennummer The Telekurs securities identification number, consisting
of up to 6 digits. Telekurs plans to adopt the ISIN standard by end 1992.
Variation margin Profits or losses on open positions in futures and
options contracts which are paid or collected daily.
Vorzugsaktie German for preferred share.
Warrant A certificate giving the holder the long-term privilege but not
the obligation of purchasing securities at a specified price.
Wash trade A matched deal which produces neither a gain nor a loss.
Wertpapierkennummer Security code number on German stock exchanges. The
German securities identification number is a 6 digit numeric code. Codes up
to 499,999 are allocated to fixed interest securities; codes from 500,000
are allocated to shares, warrants and unit trusts.
When issued A transaction made conditionally in a security authorized but
not yet issued.
White Knight A company which rescues another which is in financial
difficulty, especially one which saves a company from an unwelcome takeover
bid.
Yield The percentage rate of return paid on a common or preferred stock
in dividends (Dividend/Price).
Zaraba This is a method of trading employed on Japanese exchanges. Under
the zaraba method, transactions are consummated on the principle of auction,
i.e. 1) price priority in that the selling (buying) order with the lowest
(highest) price takes precedence over other orders, and 2) time priority in
that an earlier order takes precedence over other orders at the same price.
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