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
Daily Price Limit
The maximum price advance or decline permitted for a futures contract in one trading session compared to the previous day’s settlement price.
An order that is valid only for the day it is entered. If the order is still outstanding when the market closes, it will be purged overnight.
A long-term debt instrument issued by corporations or governments that is backed only by the integrity of the borrower, not by collateral. A debenture is unsecured and subordinate to secured debt. A debenture is unsecured in that there are no liens or pledges on specific assets.
The price paid per $100 of a debt instrument’s face value traded. A debt instrument trading at par would have a price of $100. A price below face value (for example, $99.1) indicates that the debt instrument has traded at a discount. A price above face value (for example, $101.1) indicates that the debt instrument has traded at a premium.
The total dollar value of volume traded on one side of the transaction for a specified period. It equals price multiplied by volume divided by 100.
The number of debt instruments traded on one side of the transaction for a specified period multiplied by the face value of the debt instrument.
A stock purchased from a company that has maintained a record of stable earnings and continuous dividend payments through periods of economic downturn.
Delayed Delivery Order
A special term order in which there is a clear understanding between the buying and selling parties that the delivery of the securities will be delayed beyond the usual three-day settlement period to the date specified in the order.
The removal of a security’s listing on a stock exchange. This is done when the security no longer exists, the company is bankrupt, the public distribution of the security has dropped to an unacceptably low level, or the company has failed to comply with the terms of its listing agreement.
The status of a security that is no longer listed on the Exchange. The security could trade on another market.
An issuer whose securities are no longer listed on Toronto Stock Exchange or TSX Venture Exchange. A listed issuer is delisted when the last listed security of the issuer is delisted.
The tender and receipt of the underlying commodity or the payment or receipt of cash in the settlement of an open futures contract.
The calendar month in which a futures contract may be satisfied by making or taking delivery.
A ratio that measures an option’s price movement compared to the underlying interest’s price movement. Delta values have a range of 0 to 1. Deep in-the-money options have deltas that approach 1.
The combined desire, ability and willingness on the part of consumers to buy goods or services. Demand is determined by income and by price, which are, in part, determined by supply.
A securities account created when a client gives a partner, director or qualified portfolio manager of a Participating Organization specific written authorization to select securities and execute trades on the client’s behalf.
The portion of the issuer’s equity paid directly to the security holders. It is generally paid to security holders of trusts, partnerships, and funds. The issuer or its representative provides the amount, frequency (monthly, quarterly, semi-annually, or annually), payable date, and record date. The exchange that the issue is listed on sets the ex-dividend/distribution (ex-d) date for entitlement.
Limiting investment risk by purchasing different types of securities from different companies representing different sectors of the economy.
The portion of the issuer’s equity paid directly to shareholders. It is generally paid on common or preferred shares. The issuer or its representative provides the amount, frequency (monthly, quarterly, semi-annually, or annually), payable date, and record date. The exchange that the issue is listed on sets the ex-dividend/distribution (ex-d) date for entitlement. An issuer is under no legal obligation to pay either preferred or common dividends.
Dividend Reinvestment Plan
A means of reinvesting dividends, which would otherwise be paid to the shareholder in cash, in additional stock of the company.
Equal to the indicated annual dividend rate per share divided by the security’s price. For example, if the indicated dividend rate is $1.00 and the closing price is $50.00, $1 divided by $50.00 equals 2%.
Dividend/Distribution Payable Date
The date set by the issuer on which the dividend/distribution will be paid.
Dividend/Distribution Record Date
The date on which a security holder must be registered as a holder of an issue to receive the dividend/distribution.
Dollar Cost Averaging
Investing a fixed amount of dollars in a specific security at regular set intervals over a period of time. Dollar cost averaging results in a lower average cost per share, compared with purchasing a constant number of shares at set intervals. The investor buys more shares when the price is low and buys fewer shares when the price is high.
Dow Jones Industrial Average (DJIA)
An average made up of 30 actively traded stocks. The DJIA is calculated by adding the prices of each of the 30 stocks and dividing by a divisor. The DJIA is one of the most widely quoted stock market averages in the media.
A trade is on a downtick when the last trade occurred at a price lower than the previous one.