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The following definitions may help you better understand the capital markets.
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An order that either raises the bid price or lowers the offering price is said to be improving the market. The market improves because the spread between the bid and offer decreases.
A security with a solid record of dividend payments and which offers a dividend yield higher than the average common stock.
A statistical measure of the state of the stock market, based on the performance of stocks. Examples are the S&P/TSX Composite Index, the S&P/TSX Venture Composite Index, and the Dow Jones Industrial Average.
An overall increase in prices for goods and services, usually measured by the percentage change in the Consumer Price Index.
A company's first issue of shares to the general public.
Non-public information pertaining to the business affairs of a corporation that could affect the company's share price should the information be made public.
All directors and senior officers of a company, and those who are presumed to have access to inside information concerning the company. An insider is also anyone owning more than 10% of the voting shares of a company.
There are two types of insider trading. The first type occurs when insiders trade in the stock of their company. Insiders must report these transactions to the appropriate securities commissions. The other type of insider trading is when anyone trades securities based on material information that is not public knowledge. This type of insider trading is illegal.
A stock which is listed on one or more exchanges.
An association of major U.S. stock exchanges, NASD (U.S.) members (the regulatory arm of NASDAQ), TSX Venture Exchange, Toronto Stock Exchange and the Bourse de Montréal, which shares regulatory information relevant to violations of rules in different markets.
The difference between the current market value of the underlying interest and the strike price of an option. In-the-money is a term used when the intrinsic value is positive.
The purchase or ownership of a security in order to earn income, capital or both. Investments may also include artwork, antiques and real estate.
A person employed by an investment dealer who provides investment advice to clients and executes trades on their behalf in securities and other investment products.
Initial investment capital necessary for starting a business. Investment capital usually consists of inventory, equipment, pre-opening expenses and leaseholds.
A specialist in the investment industry paid by fee to provide advice and research to investors with large accounts.
Securities firms that employ investment advisors to work with retail and institutional clients. Investment dealers have underwriting, trading and research departments.
The national self-regulatory organization of the securities industry. The Association's role is to foster efficient capital markets by encouraging participation in the savings and investment process and by ensuring the integrity of the marketplace.
A corporate function, combining finance, marketing and communications, to provide investors with accurate information about a company's performance and prospects.
Any of a company's securities or the act of distributing the securities. Issued shares refer to the portion of a company's shares that have been issued for sale. A company does not have to issue the total number of its authorized shares.
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