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TMX - Investment glossary Category: Business and Law > Investment terms Date & country: 21/02/2017, USA Words: 348

Equities
Common and preferred stocks, which represent a share in the ownership of a company.

Equity Financing
The dollar value of securities issued in accordance with a TSX or TSX Venture Exchange approved transaction. The value equals the number of securities multiplied by the offering price. The various forms of financial instruments may have an effect on determining the price or the number of securities.

Equity Option
An option contract that grants the holder the right to buy or sell a specific number of shares of stock at a specified price during a specific period of time.

Equity Price
The price per share traded.

Equity Value
The total dollar value of volume traded on one side of the transaction for a specified period. It equals price multiplied by volume.

Equity Volume
The total number of shares traded on one side of the transaction.

Escrowed Securities
The outstanding securities of an issuer that are not freely tradable, because they are subject to an escrow agreement that restricts the ability of certain security holders of that issuer from trading or otherwise dealing in those securities until certain conditions are satisfied.

European-Style Option
Options that can be exercised only on their expiration date.

Ex Dividend
The holder of shares purchased ex dividend is not entitled to an upcoming already-declared dividend, but is entitled to future dividends.

Ex Right
The holder of shares purchased ex rights is not entitled to already-declared rights, but is entitled to future rights issues.

Exchange Offering Prospectus
(EOP) A form of prospectus that allows a company to conduct a prospectus offering through the facilities of a stock exchange, rather than issuing them directly to the public. The company then applies to list the securities on the exchange.

Exchangeable Security
A security of an issuer that is exchangeable for securities of another issuer (usually a subsidiary) in accordance with the terms of the exchange feature. The exchange may be at the option of the holder or at the option of the issuer of the securities.

Exchange-Traded Fund
(ETF) A special type of financial trust that allows an investor to buy an entire basket of stocks through a single security, which tracks and matches the returns of a stock market index. ETFs are considered to be a special type of index mutual fund, but they are listed on an exchange and trade like a stock. Also known as an index participation unit (IPU).

Ex-D Date
Ex-dividend/distribution date. The date that the buyer of a stock is not entitled to the upcoming declared dividend/distribution, because the buyer will not be a holder of record. The ex-d date is two clearing days before the record date. The exchange that the issue is listed on sets the ex-d date.

Exempt Issuer
A listed issuer that has satisfied listing requirements as outlined in Section 502 of the Listing Requirements Manual. An exempt issuer is not subject to special reporting rules. This status is generally reserved for senior listed issuers.

Expiration Date
The date at which an option contract expires. This means that the option can't be exercised after that date.

Extra Dividend / Distribution
A dividend/distribution paid in addition to the regularly established dividend/distribution of the issuer. Like all dividends/distributions, it may be paid in securities or cash and the amount, payable date, and record date are established by the issuer. The exchange that the issue is listed on sets the ex-dividend/distribution (ex-d) date for entitlement. Extra dividends/distributions are sometimes referred to as special dividends/distributions.

Face Value
The cash denomination of the individual debt instrument. It is the amount of money that the holder of a debt instrument receives back from the issuer on the debt instrument's maturity date. Face value is also referred to as par value or principal.

Filing Statement
A disclosure document submitted by a listed company to outline material changes in its affairs. Filing statements are not used for the purposes of a financing.

Fill or Kill (FOK) Order
Is eligible to receive a full fill and if not fully filled is cancelled immediately.

Float Quoted Market Value
(QMV) The last price multiplied by the number of outstanding shares. For the S&P/TSX index, the QMV is based on float shares, not on total outstanding shares. Float shares are total outstanding shares less any control block position, as defined by the Standard & Poor's index methodology.

Floating Rate Security
A security whose interest rate or dividend changes with specified market indicators. A floating rate is one that is based on an administered rate, such as a prime rate.

Flow-Through Shares Financing
The dollar value of flow-through shares issued in accordance with a TSX or TSX Venture Exchange approved transaction. The price is determined by the policies of the TSX Company Manual or TSX Venture Corporate Finance Manual; the price is not adjusted for the value of the flow-through tax benefit available to the security holder. It can be an initial public offering (IPO), secondary offering, or private placement.

Freeze
An interruption in trading on a stock, triggered when an order violates parameters set by TSX.

Frequency
Frequency refers to the given time period on an intraday, daily, weekly, monthly, quarterly or yearly perspective. Typically, choosing a weekly or monthly perspective when looking at several years of data makes it easier to identify long-term trends. Daily charts are useful for active traders and short-term time period charts.



Front Month
The closest month to expiration for a futures or option contract.

Futures
Contracts to buy or sell securities at a future date.

GICS
The Global Industry Classification Standard (GICS®) is a consistent set of global economic sector and industry definitions. GICS are used to classify the constituents of many indices worldwide. GICS is a four-level classification system. The four levels are: sector, industry group, industry, and sub-industry. Standard & Poor's and Morgan Stanley Capital International (MSCI), two providers of global indices, jointly launched GICS in 1999.

Good Delivery
The term used to describe a security that is in proper form to transfer title, which means that the registered owner has endorsed it. To settle a sale, the certificate must be surrendered on good delivery by the seller. A certificate that bears a share transfer restriction will not constitute good delivery.

Good-Till-Cancelled (GTC) Order
A GTC order will remain in the system until the date that it is filled or until a maximum of 90 calendar days from date of entry, whichever happens first. This type of order is also referred to as an open order. A Participating Organization can cancel a GTC order at any time.

Good-Till-Date (GTD) Order
A GTD order will remain in the system until it is either filled or until the date specified, at which time it is automatically cancelled by the system. This is another kind of open order. A Participating Organization can cancel a GTD order at any time.

Growth Stock
The shares of companies that have enjoyed better-than-average growth over recent years and are expected to continue their climb.

Guaranteed Investment Certificate
(GIC) A deposit instrument most commonly available from trust companies or banks requiring a minimum investment at a predetermined rate of interest for a stated term, such as one or five years. GICs are generally non-redeemable and non-transferable before maturity.

Halted Issue
A temporary stoppage of trading of the listed securities of an issuer, which may be imposed by the Exchange, its agent (Market Regulation Services Inc. (RS)), or voluntarily requested by the issuer. Usually an issuer's listed securities are halted pending a public announcement of material information about the issuer, but the Exchange or RS may also impose a halt if the issuer is not in compliance with Exchange requirements or if the Exchange determines that it is in the public interest to do so.

Hedge
A strategy used to limit investment loss by making a transaction that offsets an existing position.

HSDF
High Speed Data Feed is a real-time broadcast of market data related to Toronto Stock Exchange and TSX Venture Exchange markets.

Improving the Market
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.

Income Deposit Security
(IDS) An exchange-traded, fixed income-like instrument consisting of a subordinated debt security and a share of common stock packaged together to form a tax-efficient delivery mechanism to distribute an issuer's free cash flow to its investors. Investors are paid dividends from the common share component and interest from the subordinated debt. The structure was created for U.S.-based companies to replicate the economic attributes of the Canadian income trust structure - providing steady, high-yield returns to U.S. and Canadian investors in U.S. companies. IDSs do not use the trust structure. Also known as income participating securities (IPS).

Income Stock
A security with a solid record of dividend payments and which offers a dividend yield higher than the average common stock.

Income Trust
Also called income funds. Income trusts are trusts structured to own debt and equity of an underlying entity, which carries on an active business, or has royalty revenues generated by the assets of an active business. By owning securities or assets of an underlying business, an income trust is structured to distribute cash flows, typically on a monthly basis, from those businesses to unit holders in a tax-efficient manner. The trust structure is typically utilized by mature, stable, sustainable, cash-generating businesses that require a limited amount of maintenance capital expenditures. An income trust is an exchange-traded equity investment that is similar to a common share.



Index
A statistical measure of the state of the stock market, based on the performance of stocks. Examples are the S&P/TSX Composite Index and the S&P/TSX Venture Composite Index.

Index Participation Unit
(IPU) See Exchange-Traded Fund (ETF).

Indicated Annual Dividend/Distribution
For an issue with a committed dividend/distribution policy, the indicated annual dividend/distribution (IAD) equals the most recent dividend/distribution multiplied by the payment frequency. For example, if an issuer pays $0.04 quarterly, then the indicated rate is $0.04 X 4 or $0.16. In the case of issuers with no committed policy, the IAD is obtained by adding the dividend/distribution amounts paid in the last 12-month period. Indicated annual dividend/distribution is also referred to as indicated rate.

Inflation
An overall increase in prices for goods and services, usually measured by the percentage change in the Consumer Price Index.

Initial Public Offering
(IPO) A company's first issue of shares to the general public.

Inside Information
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.

Insider
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.

Insider Trading
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.

Interlisted
For TSX reporting purposes, interlisted is defined as any issue listed on TSX or TSX Venture Exchange and also listed on a U.S. exchange or NASDAQ.

International Securities Identification Number
(ISIN) The international standard that is used to uniquely identify securities. It consists of a two-character alphabetic country code specified in ISO 6166, followed by a nine-character alphanumeric security identifier (assigned by a national security numbering agency), and then an ISIN check-digit.

Intrinsic Value
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.

Investment
The purchase or ownership of a security in order to earn income, capital or both. Investments may also include artwork, antiques and real estate.

Investment Advisor
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.

Investment Capital
Initial investment capital necessary for starting a business. Investment capital usually consists of inventory, equipment, pre-opening expenses and leaseholds.

Investment Counsellor
A specialist in the investment industry paid by fee to provide advice and research to investors with large accounts.

Investment Dealer
Securities firms that employ investment advisors to work with retail and institutional clients. Investment dealers have underwriting, trading and research departments.

Investment Dealers Association of Canada
(IDA) 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.

Investment Fund
A closed-end fund that offers investors the ability to buy a security that represents a portfolio of investments with a specific investment strategy. These products use funds raised through a public offering to invest in a portfolio of securities, which are actively managed to create income streams for investors, typically through a combination of dividends, capital gains, interest payments, and in some cases, income from derivative investment strategies. These funds are not directly related to an operating business. Some examples are: funds of income funds, senior loan funds, mortgage-backed security funds, and commodity funds.

Investor Relations
A corporate function, combining finance, marketing and communications, to provide investors with accurate information about a company's performance and prospects.

Issue
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.

Issued and Outstanding Securities
Commonly refers to the situation where the number of issued securities equals the number of outstanding securities. However, under certain corporate statutes in Canada, an issuer may have issued securities and then repurchased those securities without cancelling them. In that case, the securities are issued but are not outstanding. As a result, the number of issued securities does not equal the number of outstanding securities.

Issuer Status
The trading status of a listed or formerly listed issuer. Issuer status types include: delisted, listed, suspended, and trading.

Jitney Order
The execution and clearing of orders by one member of a stock exchange for the account of another member. For example, investment dealer A is a small firm whose volume of business is not sufficient to maintain a trader on the exchange. Instead, investment dealer A gives its orders to investment dealer B, a larger organization which is a member of the exchange, for execution. Investment dealer A pays a reduced percentage of the normal commission.

Junior Corporation
A young company in the early stages of operations and growth.

Last Sale Price
For a Market On Close (MOC)-eligible security, the last sale price equals the calculated closing price. If the MOC closing price acceptance parameters are exceeded, it equals the last board lot sale price of the security on the exchange in the regular trading session.



Last Trading Day
The last day on which a futures or option contract may be traded.

Liabilities
The debts and obligations of a company or an individual. Current liabilities are debts due and payable within one year. Long-term liabilities are those payable after one year. Liabilities are found on a company's balance sheet or an individual's net worth statement.

Limit Order
An order to buy or sell stock at a specified price. The order can be executed only at the specified price or better. A limit order sets the maximum price the client is willing to pay as a buyer, and the minimum price they are willing to accept as a seller.

Liquidating Order
An order to close out an existing open futures or options contract. A liquidating order involves the sale of a contract that has been purchased or purchase of a contract that has been sold.

Liquidity
This refers to how easily securities can be bought or sold in the market. A security is liquid when there are enough units outstanding for large transactions to occur without a substantial change in price. Liquidity is one of the most important characteristics of a good market. Liquidity also refers to how easily investors can convert their securities into cash and to a corporation's cash position, which is how much the value of the corporation's current assets exceeds current liabilities.

Listed Issuer
An issuer that has at least one class of securities listed on Toronto Stock Exchange or TSX Venture Exchange.

Listed Stock
Shares of an issuer that are traded on a stock exchange. Issuers pay fees to the exchange to be listed and must abide by the rules and regulations set out by the exchange to maintain listing privileges.

Listing Application
The document that an issuer completes and submits to an exchange when it applies to list its shares on the exchange. The issuer must disclose its activities, plans, management and finances in the application.

Long
A term that refers to ownership of securities. For example, if you are long 100 shares of XYZ, this means that you own 100 shares of XYZ company.

Low Price
The lowest price at which a board lot trade was executed during a period of time. See also: Board Lot.

Margin Account
A client account that uses credit from the investment dealer to buy a security. A client needs to deposit a margin amount with the balance advanced by the investment dealer against collateral such as investments. The investment dealer can make a margin call, which means the client must deposit more money or securities if the value of the account falls below a certain level. If the client does not meet the margin call, the dealer can sell the securities in the margin account at a possible loss to cover the balance owed. The investment dealer also charges the client interest on the money borrowed to buy the securities.

Market
The place where buyers and sellers meet to exchange goods and services. It also represents the actual or potential demand for a product or service.

Market Capitalization
The number of issued and outstanding securities listed for trading for an individual issue multiplied by the board lot trading price. Should a trading price not be available, a bid price, a price on another market, or if applicable, the price for an issue of the same issuer which the first issue is convertible into, may be used. Total market capitalization for a market is obtained by adding together all individual issue market capitalizations (warrants and rights excluded). Escrowed shares are excluded from TSX Venture market capitalization.

Market Maker
A trader employed by a securities firm who is required to maintain reasonable liquidity in securities markets by making firm bids or offers for one or more designated securities up to a specified minimum guaranteed fill. Market makers for the stock of issuers listed on Toronto Stock Exchange are referred to as Registered Traders.

Market On Close
(MOC) A TSX electronic call market facility, which establishes the closing price for certain TSX-listed securities. MOC accepts confidential market orders from before the open and throughout the trading session, maintaining them in time priority. Twenty minutes before the close of the trading session, MOC publicly broadcasts an imbalance of buy and sell MOC market orders and asks for limit MOC orders to offset the imbalance. Ten minutes before the close of the trading session, MOC publicly broadcasts an Indicative Calculated Closing Price (ICCP) that provides market participants with an indication of what the calculated closing price would be assuming the regular trading session had ended at that time (see Indicative Calculated Closing Price for more details). At the close, MOC matches orders, from the MOC and continuous market books, at a calculated closing price (which assures the most matches closest to the last sale price), and allocates the fills according to price and time priority.

Market Order
An order to buy or sell stock immediately at the best current price.

Market-by-Price®
A real-time data feed that puts the order book directly on the customer's screen. This information product shows the committed, tradable volume of the top 5 bids and asks for each Toronto Stock Exchange or TSX Venture Exchange-listed stock.

Material Change
A change in an issuer's affairs that could have a significant effect on the market value of its securities, such as a change in the nature of the business or control of the issuer. Under the principle of continuous disclosure, a listed issuer must issue a news release and report to the applicable self-regulatory organization as soon as a material change occurs.

Member
See Participating Organizations (POs) and Members

Minimum Fill Order
A special term order with a minimum fill condition will only begin to trade if its first fill has the required minimum number of shares. For example, an order to buy 5,000 shares with a minimum volume of 2,000 shares can only trade if 2,000 or more shares become available.

Minimum Guaranteed Fill (MGF) Orders
These orders are guaranteed a complete fill upon entry. A Registered Trader will provide the stock should the book be below the required limit. To be eligible for MGF, an order has to be a tradable client order with a volume less than or equal to the MGF size, which varies from stock to stock.

Minimum Price Fluctuation
The minimum price change or tick on a futures contract.

Mixed Lot or Broken Lot
An order with a volume that combines any number of board lots and an odd lot.

Money Market
Part of the capital market established to buy and sell short-term financial obligations. These include federal government treasury bills, short-term Government of Canada bonds, commercial paper, bankers' acceptances and guaranteed investment certificates. Longer-term securities are also traded in the money market when their term shortens to three years.

Multijurisdictional Disclosure System
(MJDS) A disclosure system that facilitates certain Canadian-U.S. cross-border securities offerings, issuer bids and takeover bids. It is intended to reduce costly duplication of disclosure requirements and other filings when issuers from one country register securities offerings in the other. Under the rules, eligible cross-border offerings are governed by the disclosure requirements of the issuer's home country.

Must-Be-Filled (MBF) Order
Orders placed before the market opens to buy or sell shares of stocks when their options expire. These orders are guaranteed a complete fill at the opening price to offset expiring options. They must be ordered between 4:15 p.m. and 5:00 p.m. on the Thursday before the third Friday of each month.

Mutual Fund
A fund managed by an expert who invests in stocks, bonds, options, money market instruments or other securities. Mutual fund units can be purchased through brokers or, in some cases, directly from the mutual fund company.

New Issuer Listing - IPO
(Initial Public Offering) An IPO (initial public offering) is an issuer's first offering of its securities made to the public in accordance with a prospectus. The offering is often made in conjunction with an issuer's initial application for listing on an exchange.

Net Change
The difference between the previous day's closing price and the last traded price.

Net Worth
The difference between a company's or individual's total assets and its total liabilities. Also known as shareholders' equity for a company.

New Issue
A stock or bond issue sold by a company for the first time. Proceeds may be used to retire the company's outstanding securities, or be used for a new plant, equipment or additional working capital. New debt issues are also offered by governments.

New Issuer Listing
Occurs concurrently with the posting of the new issuer's securities for trading. The preconditions for listing include the acceptance by the Exchange that all listing requirements and conditions have been satisfied. The effective listing date is the date when the listed securities open for trading.

New Issuer Listing - Application
An issuer whose application for listing was based on the TSX listing application or the TSX Venture Exchange listing application form. These applications in themselves provide prospectus-level disclosure; however, often the listing application is accompanied by an offering document or a prospectus.

New Issuer Listing - Graduate
An issuer, previously listed on TSX Venture Exchange (including NEX), that applied for and was approved for listing on TSX. The issuer's security would be delisted from TSX Venture Exchange and listed on TSX at the same time, permitting continuous listing of the securities on contiguous exchanges.

New Issuer Listing - Plan of Arrangement
An issuer listing as a result of a plan of arrangement. A plan of arrangement is a form of corporate reorganization that must be approved by a court and by the corporation's shareholders or others affected by the proposed arrangement, all as prescribed by corporate legislation. A plan of arrangement can take various forms, including: