| All
or None |
An
order type that the broker executes only if the trade can be executed for
the full quantity specified. If a complete transaction is not executed,
it will remain open for the time limit specified. |
| Annuity |
An
investment in which the policy holder makes a lump-sum or installment payment
to an insurance company and receives income at retirement. |
| Ask |
The
lowest price at which someone is willing to sell a security. |
| Asset
Allocation Funds |
Mutual
funds that feature a mix of stocks, bonds, and cash equivalents to meet
the investment objectives of individual investors. |
| Average
Maturity |
The
lifetime of a bond, concluding when the final payment of that obligation
is due. |
| Back-end
Load |
A
fee charged by a mutual fund when you sell your shares. |
| Bid |
The
highest price at which someone is willing to buy a security. |
| Blue
Chip |
A
common stock of an established company that has a long record of stable
growth. |
| Bond |
A
long-term debt security of the Government or a corporation with maturity
of 10 years or more from the issue date. Interest is usually paid every
six months and its face value returned, repaid at maturity. |
| Buy |
Purchase
of a security. |
| Buy
to Close |
You
"close" a short option position when you buy it back. |
| Buy
to Open |
You
"open" a long position when you buy an option. |
| Call
Option |
Gives
its buyer the right to buy or sell 100 shares of the underlying security
at a fixed price before a specified expiration date. Call buyers hope the
price of the stock will rise. Call sellers hope the price will stay the
same or go down. |
| Capital
Appreciation |
The
growth of the earnings on an investment's principals. |
| Capital
Gain |
Arises
when an investment is sold at a higher price than originally paid. In a
mutual fund, capital gains are created when the fund buys and sells underlying
securities at a premium over purchase price. These gains are then distributed
to shareholders at least annually. Shareholders can also earn capital gains
by redeeming their fund shares at higher prices than they originally paid. |
| Certificate
of Deposit |
Debt
instruments issued by banks and savings and loans. Maturities range from
overnight to many years. Certificates of Deposit are issued at par and
pay fixed interest at intervals or maturity. Can be brokered through Broker
Dealer |
Common Stock
|
Securities
that represent an ownership interest in a corporation. |
| Compounding |
The
computation of interest paid using the principal plus the previously earned
interest. |
| Cost
Averaging |
Buying
securities at scheduled intervals at the same amount. |
| Corporate
Bond |
Debt
obligations issued by corporations as an alternative to offering equity
ownership by issuing stock. Like most municipal bonds and Treasuries, most
corporate bonds pay semi-annual interest and promise to return their principal
when they mature. Maturities range from 1 to any number of years. |
| Custodial
Account |
An
account for the benefit of a minor with an adult as the custodian. |
| Current
Yield |
The
annual interest on a bond divided by the current market price. |
| Day
(Only) Order |
An
order condition that causes your order to be canceled at the end of the
current day's trading if the specified limits can't be met. |
| Dilution |
Effect
on earnings per share and book value per share if all convertible securities
were converted or all warrants or stock options were exercised. |
| Distribution |
The
income or capital gain made by a mutual fund that is paid to the fund's
investors. |
| Diversification |
The
allocation of assets among various types of investments. |
| Dividend
Amount |
Value
of last quarterly cash dividend or the number of shares an investor receives
for each share owned in a stock dividend. |
| Dividend
Reinvestment |
Dividends
that are reinvested in the security that generated them. |
Earnings
Per Share (EPS)
|
Four
times the last quarter's earning divided by the number of shares outstanding. |
| Earnings
Per Share Date |
Date
of the last earnings announcement. |
| Electronic
Funds Transfer |
Transferring
funds between accounts and firms electronically. |
| Ex-Dividend
Date |
Date
a split or dividend is reflected in the price of the security (if you buy
a stock on the ex-dividend date, you are not entitled to the dividend);
for splits, this is the trading day after the distribution is made. |
| Face
Value |
The
displayed value on a bond also called principal or par value. |
| Fiduciary |
One
is legally required to act in the best interest and trust of a beneficiary
or minor. |
| Fill
or Kill (FOK) |
An
order condition that cancels an order if it cannot be filled immediately
in its entirety. |
| Good
Until Canceled (GTC) |
An
order condition which will remain open until it is filled or until you
cancel it or for 60 days (whichever is first), if it is not filled immediately
due to conditions placed on the order. |
Government
Bond
|
A
bond sold by the Pakistan government. |
| High |
The
highest execution price of a trade that day, or on the last trading day. |
| Immediate
or Cancel |
An
order condition that requires all or part of an order to be executed immediately.
The part of the order that cannot be executed immediately is canceled. |
| Index
Mutual Funds |
Mutual
funds that seek to replicate the performance of established securities
indices. |
| Indexing |
Investing
for market returns by purchasing shares in an index fund. |
 |
| Last
Split Date |
The
last date on which the shares of a security were increased or decreased
by splitting. |
| Last
Trade |
The
price at which the last trade was executed; after market close, this is
the closing price. |
| Last
Trade Date and Time |
The
date and time the security was last traded. |
| Limit
Order |
An
order instructing a broker to execute an order at a specific price or better.
Buy orders are executed at or below limit price. Sell orders are executed
at or above limit price. |
| Liquid
Investment |
An
investment that can be easily converted to cash. |
| Liquid
Reserve |
Personal
savings that can be accessed immediately. |
| Load |
A
purchase or redemption fee charged by a mutual fund. |
| Low |
The
lowest execution price of a trade that day, or on the last trading day. |
| Margin
Balance |
The
net open balance in your margin account. If negative, this is the amount
owed to the brokerage firm. If positive, the balance is available to earn
interest. |
Market Indicators
|
A
variety of indices that give an indication of the overall direction and
strength of the market. |
| Market
Capitalization |
The
total value of a company's stock. |
| Market
Order |
Order
which instructs a broker to execute an order as quickly as possible at
the best price available. During market hours, this means orders for widely
traded securities will usually execute at or close to the current quotation.
Buy orders will execute at or close to the "ask" price and Sell orders
will execute at or close to the "bid" price. If a market order is entered
when the market is closed, the order will usually execute at or close to
the opening price the NEXT trading day. To prevent entering an order at
the market price, one of the following price conditions must be selected:
Stop, Limit or Stop Limit. |
| Maturity
Date |
Date
at which the face value and final interest payment of a fixed income security
(for example, bond or note) is due and payable by the debt issuer. For
bonds, maturity can range from one day to 30 years or more. |
| Mutual
Fund |
An
investment company that pools money from shareholders and invests in a
variety of securities, such as stocks, bonds and money market instruments.
Most open-end mutual funds stand ready to buy back (redeem) its shares
at their current net asset value, which depends on the total market value
of the fund's investment portfolio at the time of redemption. Most open-end
mutual funds continuously offer new shares to investors. |
Stock Market Glossary
|
| Net
Asset Value (NAV) |
The
market value of one share of a mutual fund; NAV is calculated only once
each day after market close. This value does not include any sales charges
or other fees. |
| Net
Change |
The
amount and direction of a security's price change since its previous close. |
| No-load
Mutual Fund |
A
mutual fund that does not charge a fee to buy shares of the fund at the
time of purchase or at time of sale. |
| Open |
The
price at which a security opened for trading on a given day. |
| Open-end
Fund |
A
mutual fund with no limit to the number of shares that can be issued. These
shares are purchased directly from the fund company itself, or through
a brokerage firm. |
| Option |
A
contract that permits the owner (depending on the type of option held)
to purchase or sell a security at a specific ("strike") price until a specified
expiration date. An option to purchase a security is a "call." An option
to sell a security is a "put." The price of the option itself is the "premium." |
| Pay
date |
The
date the shares from a split or dividend are sent to the shareholders. |
| Position |
Security
holdings in an account or portfolio. |
| Price |
The
cost for a security. For mutual funds, price is the net asset value (NAV).
For mutual funds with a load, the price including the load is the Public
Offering Price (POP). |
| Price/Earnings
Ratio |
Price
of a stock divided by earnings per share. |
| Principal |
The
amount of money that is financed, borrowed, or invested. |
| Put
Option |
Gives
the buyer the right to sell a number of shares of stock at a price until
the option's expiration date. Put buyers hope the price of the stock will
fall. Puts may also be purchased to protect an investment in case the price
of the stock goes down. |
| Rights |
Rights
allow existing shareholders of a corporation to subscribe to shares of
a new issue of common stock before that stock is offered to the public
on the stock market. A right usually has a life of 2 to 4 weeks, is transferable,
and entitles the holder to buy the new common stock below the Public Offering
Price. Rights are often granted to protect existing shareholders from the
effects of dilution. |
| Risk/Return
Factor |
The
relationship between an investment's growth potential and its exposure
to loss. |
| Security
Type |
The
type of security such as stock, bond or mutual fund. |
Sell
|
To
sell a security you own. |
| Sell
Short |
Selling
a stock not owned in the hope that the price will go down. The seller must
indicate that the sale is a short sale when the order is entered. This
is used for stock only, and can only be done in a margin account. If available,
the stock may be borrowed from a brokerage firm for delivery to the buyer
and must be bought back at a future date. The firm reserves the right to
call the security back at any time. Short sales require the equity be deposited
in a margin account to ensure that the stock can be repurchased even if
the price goes up. |
| Sell
to Close |
A
long option position is closed when it is sold. |
| Sell
to Open |
A
short position is opened when an option is sold. |
Shares
|
Parts
of a company sold to gain investment revenue |
| Special
Conditions |
Special
conditions may be applied to an order, such as All or None (AON) or Do
Not Reduce (DNR). |
Stock Dividends
|
A
dividend paid in stock rather than cash. |
| Stop
Order |
An
order that becomes a market order once the security has traded through
the designated stop price. Buy stops are entered above the current ask
price. If the price moves to or above the stop price, the order becomes
a market order and will be executed at the current market price. This price
may be higher or lower than the stop price. Sell stops are entered below
the current market price. If the price moves to or below the stop price,
the order becomes a market order and will be executed at the current market
price. |
| Stop
Limit Order |
An
order which becomes a limit order once the security trades at the designated
stop price. A stop limit order instructs a broker to buy or sell at a specific
price or better, but only after a given stop price has been reached or
passed. It is a combination of a stop order and a limit order. |
| Surrender
Charges |
Fees
for terminating a CD, insurance or annuity contract before it matures. |
| Switch/Swap |
This
type of order is used only for mutual funds to move money from one mutual
fund to another. If this type of order is placed over the phone, it would
be called a swap or an exchange. How and when this order is executed varies
with the time of day entered and the specific fund involved. As a rule,
the sell will be executed on day and the buy order the next. |
| Symbol |
The
symbol used to designate a security for trading. |
| Time
Conditions |
The
following time limits may be applied to Stop, Limit, or Stop Limit orders:
Day Only, Good Until Canceled, Fill or Kill, Immediate or Cancel. |
| Trust
Account |
A
legal plan by which the trustor places assets in trust for a beneficiary. |
| Vested |
The
percentage of ownership in a retirement plan assets. |
| Volume |
The
daily number of shares traded in a security. |
| Warrants |
A
type of security usually issued together with a bond or preferred stock
that allows the holder to buy a proportionate amount of common stock at
a fixed price (usually above the market price at the time of issuance)
for a period of years or to perpetuity. Warrants are transferable and trade
on the major exchanges. They are also known as Subscription Warrants. |
| 52-week
High |
The
highest price at which a security has traded within the previous 52 weeks
on the stock market. |
| 52-week
Low |
The
lowest price at which a security has traded within the previous 52 weeks
on the stock market. |
|
