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The following definitions may help you better understand the capital markets.
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One-hundredth of a percentage point. For example, the difference between 5.25% and 5.50% is 25 basis points.
A market in which stock prices are falling.
A type of underwriting where the investment firm acts as an agent. The firm agrees to use its best efforts to sell the new issue of securities, but does not guarantee the issuing company that the securities to be issued will be sold.
A measurement of the relationship between the price of a stock and the movement of the whole market.
An order with a limit price better than the best price on the opposite side of the market. A better-priced buy order has a limit price higher than the best offering. A better-priced sell order has a limit price lower than the best bid. These are available only at the opening.
The highest price a buyer is willing to pay for a stock. When combined with the ask price information, it forms the basis of a stock quote.
A mathematical model used to calculate the theoretical price of an option.
Any trade for 10,000 shares or more, which has a value of at least $100,000.
Stocks of leading and nationally known companies that offer a record of continuous dividend payments and other strong investment qualities.
A regular trading unit. The board lot size of a stock on Toronto Stock Exchange or TSX Venture Exchange can be 1000, 500, or 100 shares depending on the price of the stock. An investor buying or selling a board lot usually pays less commission than an investor buying or selling an odd lot.
| Security selling price |
Board lot size |
| $0.005 to $0.095 |
1,000 shares |
| $0.10 to $0.995 |
500 shares |
| more than $1.00 |
100 shares |
An electronic record of all pending buy and sell orders for a particular stock.
Orders that do not trade immediately upon entry. These orders are also known as outstanding orders.
Promissory notes issued by a corporation or government to its lenders, usually with a specified amount of interest for a specified length of time.
A type of underwriting where the brokerage firm acts as principal. The brokerage firm risks its own capital to purchase all of the securities to be issued. If the price of the securities decreases before the brokerage firm has had a chance to resell the securities to its clients, the firm absorbs the loss.
An arbitration centre established to resolve business disputes that have not been resolved through normal channels. As part of its services, the centre will accept claims up to $50,000 from clients of participating member firms of the Investment Dealers Association of Canada (Pacific Division) and TSX Venture Exchange.
The provincial government agency responsible for administering and enforcing the Securities Act and the Commodity Contract Act of British Columbia.
A securities firm or a registered investment advisor affiliated with a firm. Brokers are the link between investors and the stock market. When acting as a broker for the purchase or sale of listed stock, the investment advisor does not own the securities but acts as an agent for the buyer and seller and charges a commission for these services.
A market in which stock prices are rising.
If a broker fails to deliver securities sold to another broker on the settlement date, the receiving broker may buy the securities at the current market price of the stock and charge the delivering broker the cost difference of such a purchase.
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