Functions Of The Stock Exchange
What are Debentures ?
Bonds issued by a company bearing a
fixed rate of interest and repayable on a particular date.
What is Delivery ?
Presentation of certificate of shares
with transfer deeds in fulfillment of a transaction.
What is Discount ?
When a security is quoted at a price
below its nominal or face value, it is said to be a discount.
What is Cumulative Preference Share ?
In such share dividends are accumulated
if not paid and have to be paid out before paying dividend on ordinary share.
What is Dividend ?
An amount paid proportionately to
company share-holders out of earnings.
What is Ex-Dividend ?
A term to indicate that the buyer does
not get the current dividend.
What are Ex-Rights ?
Implies that the shares bought are
without the right to subscribe to the additional share currently offered by the Company.
What is Face Value ?
The value as appears on the face of the
scrip. Same as nominal or pare value.
What is Floor ?
Trading Hall of the Stock Exchange.
What is Gilt-edged Securities ?
Securities issued by the Government
i.e. of maximum securities.
What is Gross ?
When used in connection with dividend
or interest implied amount without any deduction of tax etc.
What is Growth Stock ?
Stock of a Company with prospects for
future growth.
What is Guaranteed Stock ?
Stock which are guaranteed by a party
other than the issuer as to dividend, interest or principal.
What is Inter-alia ?
Among other things.
What is Kerb Trading ?
Unauthorised trading in securities done
outside official hours. Also known as Street Dealings, not permitted under by the Bye-laws
and Regulations.
What is Letter of Renunciation ?
A document which is sent with a letter
of allotment by signing which the allotee can renounce his right to the allotment in
favour of other persons.
What is Letter of Right ?
A document which is sent to a
shareholder offering him the right to subscribe to a specified number of shares.
What is Liquidation ?
The process of converting stocks into
cash. Also means dissolution of a company.
What is Lame Duck ?
A defaulter on a Stock Exchange who is
not able to meet his market commitments and financial obligations of his business.
What is Limit Order ?
An order to buy or sell shares
restricted as to the price as which it may be executed and/or its duration. Both rate of
order and time for execution constitute a limit order.
What is Listing Agreement ?
An agreement which has to be entered
into by companies when they see listing for their shares on a Stock Exchange. Companies
are called upon to keep the Stock Exchange promptly informed of all Corporate Developments
having a bearing on the market price for the shares like dividend, rights and bonus
shares.
What is Making-up Price ?
The price at which shares are closed
for the current settlement and carried over the next settlement day.
What is Margin ?
An advance payment of a portion of the
value of a stock.
What is Market Price ?
The price at which a stock can be
bought in the market, as against its par value.
What is Maturity ?
The date on which a security is paid
off.
What is Net Dividend ?
Dividend after deduction of tax payable
from the gross dividend.
What is New Issue ?
Shares sold by a company for the first
time.
What is Non-Cumulative ?
Implies that arrears of dividends will
not accrue.
What is Official List ?
The list containing names of securities
allowed to be transacted on the Stock Exchange by the Committee.
What is Paper Profit ?
Unrealised profit on a share.
What is Par Value ?
It means the face value of securities.
What is Pari Passu ?
It means in equal proportion. Two
securities are said to rank Pari Passu when there is no difference as to dividend, voting
power and other rights between them.
What is Participating ?
The right to participate further in
profits after a specified dividend is paid.
What is Partly-Paid ?
Shares on which the full nominal value
has not been called up are called "Partly-Paid" up.
What are Preference Shares ?
Shares on which a fixed dividend is
paid prior to that on ordinary shares.
What is Premium ?
Amount above the par value of a stock.
What is Profit-taking ?
Selling to take profit.
What is Permitted Security ?
Permitted Security means shares of
companies in which dealings are permitted though not listed on the particular Exchange but
are listed on some other recognised Stock Exchange in India.
What is Price-Earning Ratio ?
The ratio of the market price of the
share divided by the earnings per share. This is a measure used by investment experts to
compare the relative merits of a number of securities in the same industry.
What is Dividend Cover ?
Denotes the number of times equity
earning per share covers the equity dividend per share.
What is Proxy ?
A person who acts for another in a
companys general meeting. A Proxy has no right to speak at a meeting.
What is Rally ?
A brisk rise following a fall.
What is Record Date ?
The date on which a member must be
registered in the books of the company to be entitled to dividend or other rights.
What is Redemption Price ?
The price at which a bond is redeemed.
What is Registered Bond ?
A bond which is registered in the books
of the company in the name of the owner.
What is Right Shares ?
Additional shares which a company
offers pro-rata to its existing shareholders.
What is Short Covering ?
Buying of stocks by a seller to
complete his previous commitments.
What is Speculation ?
Employment of funds by a person to
assume a relatively large risk in the hope of gain.
What is Solit ?
Sub division of a share of larger
denomination into shares of smaller denominations. Also means sub-division holding.
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