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The following definitions may help you better understand the capital markets.
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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.
The designated central clearing corporation for all equity trades in Canada.
The designated central clearing corporation for options and futures trading on the Bourse de Montreal. Previously known as Trans Canada Options Inc. (TCO).
A fund established to protect customers in the event of insolvency of a member of any of the following sponsoring self-regulatory organizations: the Bourse de Montréal, Toronto Stock Exchange, TSX Venture Exchange and the Investment Dealers Association of Canada.
The national educational organization of the securities industry sponsored by the Investment Dealers Association of Canada, Toronto Stock Exchange, TSX Venture Exchange and the Bourse de Montréal.
To an economist, capital means machinery, factories and inventory required to produce other products. To investors, capital means their cash plus the financial assets they have invested in securities, their home and other fixed assets.
Profit or loss resulting from the sale of certain assets classified under the federal income tax legislation as capital assets. This includes stocks and other investments such as investment property.
The TSX Venture Exchange Capital Pool Company (CPC) program offers a unique listing opportunity that brings experienced management teams with proven public financing ability together with development-stage companies in need of capital and management expertise. Unlike traditional public companies, capital pools list and begin trading without an operating business. The nature of their business is to find and acquire a promising early-stage venture, and their treasuries are funded expressly for the search and due diligence process.
All shares representing ownership of a company, including preferred and common shares.
Total dollar amount of all money invested in a company, such as debt, preferred and common stock, contributed surplus and retained earnings of a company.
A special term attached to an equity order that requires the trade to be settled either the same day or the following business day for cash.
Settlement of an option contract not by delivery of the underlying shares, but by a cash payment of the difference between the strike or exercise price and the underlying settlement price.
The physical document that shows ownership of a bond, stock or other security.
An order from a retail customer of an investment dealer.
An order to close out an existing open futures or options contract.
The fee charged by an investment advisor for buying or selling securities as an agent on behalf of a client.
CUSIP is a standard system of securities identification and securities description that is used in electronically processing and recording securities transactions in North America.
Products used for commerce that are traded on a separate, authorized commodities exchange. Commodities include agricultural products and natural resources such as timber, oil and metals. Commodities are the basis for futures contracts traded on these exchanges.
Securities that represent part ownership in a company and generally carry voting privileges. Common shareholders may be paid dividends, but only after preferred shareholders are paid. Common shareholders are last in line after creditors, debt holders and preferred shareholders to claim any of a company's assets in the event of liquidation.
When an order trades all of its specified volume.
A company's ongoing obligation to inform the public of significant corporate events, both favourable and unfavourable.
A feature of certain bonds, debentures and preferred shares. They may be exchanged by the holder usually for the common stock of the same company, in accordance with the terms of the conversion privilege.
A form of business organization created under provincial or federal laws that has a legal identity separate from its owners. The shareholders are the corporation's owners and are liable for the debts of the corporation only up to the amount of their investment. This is known as limited liability.
A trade that occurs when two accounts within brokerage firms wish to buy and sell the same stock at an agreed price and volume. A cross can only occur at or between the current bid and ask for the stock.
After the close of the regular trading day, crosses can be executed between 4:05 p.m. and 5:00 p.m. ET at the last sale price of the stock.
With dividend. The owner of shares purchased cum dividend is entitled to an upcoming already-declared dividend. The opposite of this is ex dividend.
With rights. The owner of shares purchased cum rights is entitled to forthcoming, already-declared rights. The opposite of this is ex rights.
A stock purchased from a company in an industry sector that is particularly sensitive to swings in economic conditions.
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