In order to achieve success in the stock market you must be able to speak the language of the stock market. Please use our supplied glossary of terms to become better acquainted with these terms so that you may gain a better understanding of the market world
An option which gives the holder the right, but not the obligation, to buy a fixed amount of a certain stock at a specified price within a specified time. Calls are purchased by investors who expect a price increase.
Canadian Depository for Securities Limited (CDS)
Canada’s national securities depository, Canadian Depository for Securities Limited (CDS), provides clearing and settlement services in support of trading in equity, fixed income, and money markets. CDS is owned by major Canadian chartered banks, members of the Investment Dealers Association of Canada (IDA), and TSX Inc. CDS is regulated by the Ontario Securities Commission, L’Autorité des marchés financiers (the securities commission of Quebec), and the Bank of Canada.
Canadian Derivatives Clearing Corporation (CDCC)
The designated central clearing corporation for options and futures trading on the Bourse de Montréal. Previously known as Trans Canada Options Inc. (TCO).
Canadian Investor Protection Fund (CIPF)
A fund established to protect customers in the event of insolvency of a member of any of the following sponsoring self-regulatory organizations: the Bourse de Montréal, Toronto Stock Exchange, TSX Venture Exchange and the Investment Dealers Association of Canada.
Canadian Securities Institute (CSI)
The national educational organization of the securities industry sponsored by the Investment Dealers Association of Canada, Toronto Stock Exchange, the Bourse de Montréal and TSX Venture Exchange.
To an economist, capital means machinery, factories and inventory required to produce other products. To investors, capital means their cash plus the financial assets they have invested in securities, their home and other fixed assets.
Capital Gain or Loss
Profit or loss resulting from the sale of certain assets classified under the federal income tax legislation as capital assets. This includes stocks and other investments such as investment property.
Capital Gains Distribution
A taxable distribution out of taxable gains realized by the issuer. It is generally paid to security holders of trusts, partnerships, and funds. Like all distributions, it may be paid in securities or cash. 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.
Capital Pool Companies
The TSX Venture Exchange Capital Pool Company (CPC) program offers a unique listing opportunity that brings experienced management teams with proven public financing ability together with development-stage companies in need of capital and management expertise. Unlike traditional public companies, capital pools list and begin trading without an operating business. The nature of their business is to find and acquire a promising early-stage venture, and their treasuries are funded expressly for the search and due diligence process.
All shares representing ownership of a company, including preferred and common shares.
A form of financial trust that differs from other trusts in that it looks more like a fixed income instrument than an equity issue. Capital trusts are generally issued by banks or other financial intermediaries. These investment vehicles trade like a debt instrument with $1,000 face value and trade with accrued interest. The business objective of capital trusts is to acquire and hold assets that will generate net income for distribution to unit holders. The trust’s assets may consist of residential mortgages, mortgage co-ownership interests, mortgage-backed securities, other eligible investments, and other qualified debt obligations. Capital trust assets are usually acquired from and serviced by the issuing institution and/or its affiliates.
Any change in the issued and outstanding listed securities of an issuer. This change may involve the issuance, repurchase, or cancellation of listed securities or listed securities that are issuable upon conversion or exchange of other securities of an issuer.
Capitalization Effective Date
The date that the capitalization change is reflected in the issuer’s share register, regardless of when it is reported to the Exchange.
Capitalization or Capital Structure
Total dollar amount of all money invested in a company, such as debt, preferred and common stock, contributed surplus and retained earnings of a company.
Indices for which there is a maximum relative weight by market capitalization for any one constituent. Any individual constituent of the index can represent no more than a specified percent of the index. The individual constituents of the S&P/TSX Capped Composite and S&P/TSX Capped 60 indices are capped at 10%, while the individual constituents of the S&P/TSX Capped sector indices are capped at 25%.
A special term attached to an equity order that requires the trade to be settled either the same day or the following business day for cash.
Cash Dividend / Distribution
A dividend/distribution that is paid in cash.
Settlement of an option contract not by delivery of the underlying shares, but by a cash payment of the difference between the strike or exercise price and the underlying settlement price.
The physical document that shows ownership of a bond, stock or other security.
Changes in Stock List
Any modification to the list of tradable issues of an exchange. These modifications include: new listings, supplemental security listings, substitutional listings, deletions, name changes, and stock symbol changes.
TSX Venture Level 1 (CL1) is a real-time service for listed junior equities that provides trades, quotes, corporate actions and index information from TSX Venture Exchange.
TSX Venture Level 2 (CL2) is a real-time service for junior equities that shows all of the committed orders and trades for each TSX Venture Exchange listed security in real time.
Any business day on which the clearing corporation is open to effect trade clearing and settlement.
The trading number of the clearing Participating Organization or Member.
An order from a retail customer of a Participating Organization.
Closed-End Investment Fund
An investment trust that issues a fixed number of securities that trade on a stock exchange or in the over-the-counter market. Assets of a closed-end fund are professionally managed in accordance with the fund’s investment objective and policies and may be invested in a wide range of financial instruments/assets. Like other publicly traded securities, the market price of closed-end fund securities fluctuates and is determined by supply and demand in the marketplace.
An order to close out an existing open futures or options contract.
The fee charged by an investment advisor or broker for buying or selling securities as an agent on behalf of a client.
Products used for commerce that are traded on a separate, authorized commodities exchange. Commodities include agricultural products and natural resources such as timber, oil and metals. Commodities are the basis for futures contracts traded on these exchanges.
Common Shares or Common Stock
Securities that represent part ownership in a company and generally carry voting privileges. Common shareholders may be paid dividends, but only after preferred shareholders are paid. Common shareholders are last in line after creditors, debt holders and preferred shareholders to claim any of a company’s assets in the event of liquidation.
When an order trades all of its specified volume.
Conditional Listing Application (CLA)
When a company applies to list on Toronto Stock Exchange, a CLA consists of the Toronto Stock Exchange listing agreement and the company’s prospectus.
Consolidated Short Position Report
A consolidated report that includes the total shares short (as of the trade date) and the net change from the previous report, for both TSX and TSX Venture Exchange listed issues. Under UMIR rule 10.10, all TSX and TSX Venture Exchange Participating Organizations and Members must report the firm’s short position on a semi-monthly basis to TSX Datalinx. Non-clearing firms may report through the firm that is responsible for their clearing.
A company’s ongoing obligation to inform the public of significant corporate events, both favourable and unfavourable.
A security of an issuer (for example – bonds, debentures, or preferred shares) that may be converted into other securities of that issuer, in accordance with the terms of the conversion feature. The conversion usually occurs at the option of the holder of the securities, but it may occur at the option of the issuer.
Corporation or Company
A form of business organization created under provincial or federal laws that has a legal identity separate from its owners. The shareholders are the corporation’s owners and are liable for the debts of the corporation only up to the amount of their investment. This is known as limited liability.
A trade that occurs when two accounts within the same Participating Organization/Member wish to buy and sell the same security at an agreed price and volume. With some approved exceptions, crosses can only occur within the current bid and ask for the stock.
After the close of the regular trading day, crosses can be executed between 4:10 p.m. and 5:00 p.m. ET at the last sale price of the stock.
With dividend. The owner of shares purchased cum dividend is entitled to an upcoming already-declared dividend. The opposite of this is ex dividend.
With rights. The owner of shares purchased cum rights is entitled to forthcoming, already-declared rights. The opposite of this is ex rights.
The trading day before the ex-dividend/distribution (ex-d) date. It is the last day on which the securities can be traded and on which the buyer is entitled to the dividend/distribution.
CUSIP © (Committee on Uniform Security Identification Procedures) is a standard system of securities identification and securities description, which is used in electronic processing and recording of securities transactions in North America. As a service bureau to the Canadian financial industry, CDS INC., a subsidiary of CDS, acts as liaison between Standard & Poor’s (S&P) and the issuing companies for the assignment of CUSIP numbers and descriptions. A CUSIP number uniquely identifies a Canadian or American security issue and its issuer.
A stock of a company in an industry sector that is particularly sensitive to swings in economic conditions.