Copy of `Joslin Rowe - Trading and investment glossary`

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Joslin Rowe - Trading and investment glossary Category: Economy and Finance > Trading and investment Date & country: 28/01/2011, UK Words: 38

aim
The `Alternative Investment Market` – a stock market in London for small, new companies.

analyst
Often an entry position for graduates in investment banks. This involves the study of companies and markets and making recommendations.

back office
Where the accounting is done and the settlements made for stock trading firms.

big bang
The name given to the de-regulation of the UK Stock Exchange in October 1986.

bond
A certificate issued by a borrower as a receipt for a loan longer than 12 months, indicating rate of interest and repayment date.

broker
An intermediary who buys or sells securities, foreign exchange or other financial instruments.

capital markets
The markets for long and medium term securities.

chaps
The UK institution for the settlement of GB£ payments.

clearing house
A 'central' body guaranteeing contracts in options and futures on behalf of its members.

commodities
Goods such as oil, petrol and metal traded on commodity markets.

corporate finance
The department of an Investment Bank that deals with take-overs, mergers and specialist advice to clients.

crest co.
The paperless London Stock Exchange settlement system introduced in July 1996.

derivatives
Financial products whose price is derived from another product.

discounting
The process of buying or selling a security at less than its face value.

equity
The generic word used for stocks and shares. Can also be used as a substitute word for 'total shareholders funds'.

fixed income
Securities that will only pay a fixed rate of interest. Due to the element of certainty, they will never yield the high returns of shares that do well.

front office
The 'dealing' room system involved in buying/selling of securities.

fsa financial services authority.
The regulatory body in the UK will eventually assume responsibility for control of all markets in the UK - FX, MM, insurance etc.

fund management
Advising on investments and managing money for corporate and private clients.

futures
The contract which fixes a price and date in the future for two parties to buy/sell a commodity or security.

hedge fund
A high risk investment managed to obtain maximum returns.

investment banking
The term used to describe a range of activities including trading, corporate finance, fund management, private equity and mergers & acquisitions.

investment trust
A company whose core business is investing in equities. Known as a 'closed' fund.

merchant banks
The UK term for Investment banks. MLR Minimum Lending Rate. Rate of interest that the Bank of England will lend to discount houses.

mutual funds
The generic term for 'pooled' investment institutions such as unit trust funds. Unit trust funds are known in the USA as mutual funds.

nasdaq
North American Securities Dealers Automated Quotations. A highly computerised dealing system for US technology stocks outside the recognised exchanges.

options
The right but not the obligation to sell or buy equities, bonds, foreign exchange or interest rate contracts at a future date but at a price to be agreed now.

primary market
The market where securities are first issued.

private equity
Investment in shares in new companies. This is high risk yet can offer high returns.

risk management
The analysis of factors that could cause loss to a company and how to avoid or minimise them.

secondary markets
Buying and selling of securities after their first issue.

securities
A generic term for equities, bonds and gilts.

stock
A fixed interest security traded on the Stock Exchange.

tradepoint
UK based computerised stock trading system started in September 1996.

trader
Buys and sells bonds, shares and other financial products.

trax
The system into which all bond transactions have to be entered within 30 minutes of execution to allow confirmation to take place.

underwrite
Where a financial institution(s) agrees to purchase any unsold shares which have not been purchased in a new issue situation. This ensures that the issue is fully subscribed.

venture capital
Funding that is provided for high risk activities where conventional loans may not be available