Copy of `TMX - Investment glossary`

The wordlist doesn't exist anymore, or, the website doesn't exist anymore. On this page you can find a copy of the original information. The information may have been taken offline because it is outdated.

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

New Issuer Listing - Spin-Off
A reorganization that usually results in a newly listed issuer acquiring a business division or assets as its principal operating asset from another issuer (the reorganized issuer), with security holders of the reorganized issuer holding securities in both issuers, following completion of the reorganization.

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

New Listing
A security issue that is newly added to the list of tradable security issues of an exchange. It is accompanied with a new listing date.

Non-Certificated Issues
An issue that is recorded on the transfer agent's electronic book rather than being held as a physical note.

Non-Exempt Issuer
A listed issuer that is subject to special reporting rules.

Non-Net Order
A special-term order when there is a clear understanding between the buying and selling parties that they will settle the trade directly with each other.

Non-Resident Order
A special term order when one or more participants in the trade is not a Canadian resident.

North American Industry Classification System
(NAICS) A system for classifying business establishments. It was developed by the Economic Classification Policy Committee (ECPC) on behalf of the U.S. Office of Management and Budget (OMB), in cooperation with Statistics Canada and Mexico's Instituto Nacional de Estadistica, Geografia e Informatica (INEGI) to provide comparable statistics across the three countries. Launched in 1997, it is the replacement for the 1987 Standard Industrial Classification (SIC) codes.

Odd Lot
A number of shares that are less than a board lot, which is the regular trading unit decided upon by the particular stock exchange. An odd lot is also an amount that is less than the par value of one trading unit on the over-the-counter market. For example, if a board lot is 100 shares, an odd lot would be 99 or fewer shares.

Offer
See Ask.

Offset
To liquidate or close out an open futures or option contract.

One-Sided Market
A market that has only buy orders or only sell orders booked for a particular security.

On-Stop (O/S) Order
A special-term order placed with the intention of trading at a later date when the price of the stock reaches the specified stop price. An on-stop order becomes a limit order once a trade at the trigger price has occurred.

Ontario Securities Commission
The government agency that administers the Securities Act (Ontario) and the Commodity Futures Act (Ontario) and regulates securities and listed futures contract transactions in Ontario.

Open Interest
The net open positions of a futures or option contract.

Open Order
An order that remains in the system for more than a day. See Good-Till-Cancelled or Good-Till-Date.

Open-End Investment Fund
An investment fund that continuously offers its securities to investors and stands ready to redeem its securities at all times. Transactions in shares/units of mutual funds are based on their net asset value (NAV), determined at the close of each business day. Examples of an open-end fund are traditional mutual funds and exchange-traded funds (ETFs).

Opening
The market opens at 9:30 a.m. ET each business day.

Option
The right, but not the obligation, to buy or sell certain securities at a specified price within a specified time. A put option gives the holder the right to sell the security, and a call option gives the holder the right to buy the security.

Option Class
All options of the same type, either calls or puts, that have the same underlying security.

Option Cycle
A set pattern of months when a class of options expires.

Option Holder
The buyer of an option contract who has the right to exercise the option during its lifetime.

Option Series
An individual option contract for a given security.

Option Type
A call or put contract.

Option Writer
The seller of an option contract who may be required to deliver (call option) or to purchase (put option) the underlying interest covered by the option, before the contract expires.

Order Number
An eight or nine-digit number assigned to every order entered into the system.

Original Listing/Initial Listing
A listing is designated as an original listing on TSX or initial listing on TSX Venture Exchange, if it satisfies the following three conditions:

OTC Foreign Trading
OTC (over-the-counter) foreign trading refers to UMIR Rule 6.4 (e), which permits a trade to be executed off the Exchange, if one or both Participating Organization/Member client accounts are outside of Canada, provided such trades are reported within a specific time frame to the Exchange for public dissemination of the transaction.

Over-The-Counter (OTC) Market
The market maintained by securities dealers for issues not listed on a stock exchange. Almost all bonds and debentures, as well as some stocks, are traded over-the-counter in Canada. An OTC market is also known as an unlisted market.

Par Value
A security's nominal face value.

Partial Fill
An order receives a partial fill when it trades only part of its total committed volume.

Participating Organizations (POs) and Members of TSX
Firms that are entitled to trade through the facilities of TSX. However, only POs are also involved in all aspects of the securities business, including underwriting new issues and other financings, and assisting companies in the initial public offering (IPO) process.

Participating Organizations (POs) and Members of TSX Venture Exchange
Firms entitled to trade through the facilities of TSX Venture Exchange. However, only POs of TSX and Members of TSX Venture Exchange are permitted to act as sponsors for listed issuers or issuers proposing to be listed on TSX Venture Exchange.

Penny Stock
Low-priced speculative issues of stock selling at less than $1.00 a share.

Portfolio
Holdings of securities by an individual or institution. A portfolio may include various types of securities representing different companies and industry sectors.

Position Limit
The maximum number of futures or options contracts any individual or group of people acting together may hold at one time.

Power, Pipeline & Utility Trusts
A type of income trust. They are investment vehicles that have underlying businesses that are utilities, power generation companies, or pipeline companies.

Preferred Share
A class of share capital that entitles the owner to a fixed dividend ahead of the issuer's common shares and to a stated dollar value per share in the event of liquidation. It usually does not have voting rights, unless a stated number of dividends have been omitted.

Premium
An option contract's price.

Pre-Opening Session
A session from 7:00 a.m. to 9:30 a.m. (ET) when orders can be entered into the Toronto Stock Exchange's systems. Tradable orders will be queued until after 9:30 a.m. when the market opens.

Price-Earnings (P/E) Ratio
A common stock's last closing market price per share divided by the latest reported 12-month earnings per share. This ratio shows you how many times the actual or anticipated annual earnings a stock is trading at.

Principal Trade
A trade when a Participating Organization is either buying from, or selling to its client.

Priority
If there are several orders competing for a stock at the same price, a priority determines when one of these orders will be filled before any other at this price. Priority is based on the time at which the order is received into the system.

Private Placement
The private offering of a security to a small group of buyers. Resale of the security is limited. See Best Efforts and Bought Deal Underwriting.

Private Placement Financing
The dollar value of privately placed securities issued in accordance with a TSX or TSX Venture Exchange approved transaction. The price is determined in accordance with the policies of the TSX Company Manual or TSX Venture Corporate Finance Manual. The number of securities is the actual number issued. The composition of the financing could take the form of units comprised of multiple securities.

Professional and Equivalent Real-Time Data Subscriptions
The total number of professional accesses to real-time products of TSX and TSX Venture Exchange, as well as non-professional accesses that are priced the same or at a minimal discount to the professional access rate for the same product.

Profit
What is left over for the owners of a business after all expenses have been deducted from revenues. Gross profit is the profit before corporate income taxes. Net profit is the final profit of the business after taxes have been paid.

Prospectus
A legal document describing securities being offered for sale to the public. It must be prepared in accordance with provincial securities commission regulations. Prospectus documents usually disclose pertinent information concerning the company's operations, securities, management and purpose of the offering.

Push-Out
A push-out occurs during a stock split when new shares are forwarded to the registered holders of old share certificates, without the holders having to surrender the old shares. Both the old and new shares have equal value.

Put Option
A put option is a contract that gives the holder the right to sell a specified number of shares at a stated price within a fixed time period. Put options are purchased by those who think a stock may decline in price.

Quoted Market Value
(QMV) See Market Capitalization.

Rally
A brisk rise in the general price level of the market or price of a stock.

Real Estate Investment Trust
(REIT) Typically, a closed-end investment fund that trades on an exchange and uses the pooled capital of many investors to purchase and manage income properties. Equity REITs primarily own commercial real estate, such as shopping centres, apartments, and industrial buildings. By taking advantage of the trust structure, REITs offer tax advantages (beyond traditional common equity investments) to investors and provide a liquid way to invest in real estate, which otherwise is an illiquid market.

Record Date
See Dividend/Distribution Record Date.

Redeemable Security
A security that carries a condition giving the issuer a right to call in and retire that security at a certain price and for a certain period of time.

Registered Traders
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.

Relative Position Report
A TSX report that ranks each Participating Organization's/Member's trading activity relative to the total market and the other POs/Members. It is produced monthly for each TSX Group PO/Member.

Responsible Registered Trader
The Registered Trader assigned by the Selection Committee to act as market maker in a security. Their duties include providing a minimum guaranteed fill, maintaining minimum spread and ensuring orderly trading.

Retractable Security
A security that features an option for the holder to require the issuer to redeem it, subject to specified terms and conditions.

Revenue
The total amount of funds generated by a business.

Reverse Takeover (RTO)/Backdoor Listing
A transaction or series of transactions that includes a securities issuance made by a listed issuer to parties vending securities or other assets into the listed issuer (the new security's holders), such that after completion of the transaction(s), the new security's holders will own more than 50% of the outstanding voting securities of the listed issuer, with an accompanying change of control of the listed issuer. A reverse takeover (RTO)/backdoor listing can be completed through various transactions, including a business or asset acquisition, an amalgamation, a plan of arrangement, or other form of reorganization. The listing of securities of an issuer formed in accordance with an RTO/backdoor listing is treated as a new listing.

Rights
A temporary privilege that lets shareholders purchase additional shares directly from the issuer at a stated price. The price is usually less than the market price of the common shares on the day the rights are issued. The rights are only valid within a given time period.

Risk
The future chance or probability of loss.

Seat
The traditional term for membership on a stock exchange. An investment dealer or brokerage buys a seat on the exchange and one employee is designated as the seat holder. As Toronto Stock Exchange is now demutualized, there are no longer seats on the exchange.

Securities
Transferable certificates of ownership of investment products such as notes, bonds, stocks, futures contracts and options.

Securities and Exchange Commission
(SEC) The federal regulatory body for interstate securities transactions in the United States.

Securities Commission
Each province has a securities commission or administrator that oversees the provincial securities act. This act is a set of laws and regulations that set down the rules under which securities may be issued or traded in that province.

Securities Industry Association
(SIA) The trade association representing more than 600 securities firms throughout Canada and the United States. Members include banks, brokers, dealers and mutual fund companies.

SEDAR*
The System for Electronic Document Analysis and Retrieval. SEDAR is an electronic filing system that allows listed companies to file prospectuses and continuous disclosure documents. The Canadian Securities Administrators, Canadian Depository for Securities Limited and the filing community developed it, with co-operation from legal firms and stock exchanges.

Seed Stock
The shares or stock sold by a company to provide start-up capital before carrying out an initial public offering (IPO).

Self-Regulatory Organization
An organization recognized by securities administrators as having powers to establish and enforce industry regulations to protect investors and to maintain fair, equitable and ethical practices in the securities industry. Examples include Toronto Stock Exchange and the Investment Dealers Association.

Settlement
The process that follows a transaction when the seller delivers the security to the buyer and the buyer pays the seller for the security.

Settlement Date
The date when a securities buyer must pay for a purchase or a seller must deliver the securities sold. Settlement must be made on or before the third business day following the transaction date in most cases.

Settlement Price
The price used to determine the daily net gains or losses in the value of an open futures or options contract.

Share Certificate
A paper certificate that represents the number of shares an investor owns.

Short Selling
The selling of a security that the seller does not own (naked or uncovered short) or has borrowed (covered short). Short selling is a trading strategy. Short sellers assume the risk that they will be able to buy the stock at a lower price, cover the outstanding short, and realize a profit from the difference.

Special Terms
Orders which must trade under special conditions. For example, a cash order will be settled sooner than the usual three-day settlement period.

Special Trading Session
A session during which trading in a listed security is limited to the execution of transactions at a single price.

Speculator
Someone prepared to accept calculated risks in the marketplace for attractive potential returns.

Sponsor, TSX Venture Issuers
A Participating Organization of TSX or a Member of TSX Venture Exchange that is qualified to carry out a due-diligence review of an issuer and prepare a sponsor report, which provides an opinion on the suitability of that issuer for listing or continued listing on TSX Venture Exchange.

Spread
The difference between the bid and the ask prices of a stock.

Stock Symbol
A one-character to three-character, alphabetic root symbol, which represents an issuer listed on Toronto Stock Exchange or TSX Venture Exchange.

Standing Committees
Committees formed for the purpose of assisting in decision-making on an ongoing basis.

Stock Dividend/Distribution
A dividend/distribution paid in securities of the same issue or a different issue of the same issuer or another issuer. A stock dividend/distribution can be used as a means to list a new issuer. The issuer or its representative provides the amount, payable date, and record date. The exchange that the issue is listed on sets the ex-dividend/distribution (ex-d) date for entitlement.

Stock Index Futures
Futures contracts which have a stock index as the underlying interest.

Stock List Deletion
A security issue that is removed or delisted from the list of tradable security issues of an exchange. It is usually accompanied with a reason for deletion and the deletion date.

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

Stock Price Index Value
(SPIV) The number that is usually quoted as the value of an index. SPIV is based on the aggregate, float quoted market value of the index constituents and is calculated for all S&P/TSX indices. SPIV is calculated at the end of the trading session for all S&P/TSX indices and throughout the trading session for certain S&P/TSX indices.

Stock Split
A corporate action that increases the number of securities issued and outstanding, without the issuer receiving any consideration for the issue. Approval by security holders is required in many jurisdictions. Each security holder gets more securities, in direct proportion to the amount of securities they own on the record date; thus, their percentage ownership of the issuer does not change. For example, a two-for-one stock split involves the issuance of two new securities for every old security.

Stock Symbol Extension
The character or characters that may follow the stock symbol to uniquely identify a listed security. It can be a single alphabetic character, two alphabetic characters, or a combination of two plus one characters with a maximum of eight characters for the stock symbol, extension and separator dots in between. For example, BMO.PR.U. Currently, they include:

Street Certificate
These are certificates registered in the name of a securities firm rather than the owner of the security. This makes the certificate easily transferable to a new owner.

Structured Products
Closed-end or open-end investment funds, which provide innovative and flexible investment products designed to respond to modern investor needs, such as yield enhancement, risk reduction, or asset diversification. Structured products allow investors to buy a single unit/share of a fund that represents an interest in the investment portfolio. Based on the investment strategy, the portfolio can purchase a basket of securities, track an index, or hold a specific type of security or portion of a security.



Substitutional Listing
A broad category of transactions that involves one security on the stock list being replaced by another security or securities.

Suspended Issue
The status of a listed security of an issuer whose trading privileges have been revoked by the Exchange. All securities of the issuer remain suspended until trading privileges have been reinstated, or the issuer is delisted.

Symbol Change
A change in a listed issuer's stock symbol, which may be required by the Exchange in the context of an issuer's reorganization or may be made at the request of the issuer. A requested symbol is available for use if it is appropriate for the type of security and the issuer's voting structure.

Thin Market
A market that occurs when there are comparatively few bids to buy or offers to sell, or both. The phrase may apply to a single security or to the entire stock market. In a thin market, price fluctuations between transactions are usually larger than when the market is liquid. A thin market in a particular stock may reflect lack of interest in that issue, or a limited supply of the stock.

Tick
Slang used for minimum spread. Depending on the stock price it could be a half-cent, one cent or five cents.

Ticker Tape
Each time a stock is bought and sold, it is displayed on an electronic ticker tape. It is a record of current trading activity on an exchange.

Ticket Fee
The administrative fee charged for each trade.

Tier Structure
The TSX Venture Exchange market has two tiers where securities are listed and traded. Tier 1 is for advanced companies with a certain level of net tangible assets and earnings. Tier 2 is for more junior venture companies.