Accredited
investor
Refers to a wealthy investor (net worth S$2 million or annual
income in the preceding year > S$300,000).
Ask
This is the quoted ask, or the lowest price an investor will
accept to sell a stock. Practically speaking, this is the
quoted offer at which an investor can buy shares of stock;
also called the offer price.
Bid
The price a potential buyer is willing to pay for a security.
Sometimes also used in the context of takeovers where one
corporation is bidding for (trying to buy) another corporation.
In trading, we have the bid-ask spread which is the difference
between what buyers are willing to pay and what sellers are
asking for in terms of price.
Blue-chip company
Used in the context of general equities. Large and creditworthy
company. Company renowned for the quality and wide acceptance
of its products or services, and for its ability to make money
and pay dividends.
Bond
Bonds are debt instruments and are issued for a period of
more than one year. The government, companies and many other
types of institutions sell bonds. When an investor buys bonds,
he or she is lending money. The seller of the bond agrees
to repay the principal amount of the loan at a specified time..
Buy in
The repurchase of securities at the seller's risk when he
fails to deliver securities to the buyer by due date.
Closing price
Price of the last transaction of a particular stock completed
during a day's trading session on an exchange.
Commission
The fee paid to a trading representative to execute a trade,
based on volume traded and/or their dollar value.
Debt instrument
An instrument that allows the issuing party to raise funds
with the promise to repay the lender in accordance to the
specifications of the contract, such as a government bond
or treasury bill.
Delinquency
State whereby investor’s account is frozen as a result
of overdue unpaid debt.
Delisting
Removal of a company's security from listing on an exchange
because the firm has not abided by specific regulations.
Derivative instruments
Contracts such as contracts for difference (CFDs), options
and futures whose price is derived from the price of an underlying
financial instrument like stocks.
Dividend
A portion of a company's profit paid to shareholders.
Dollar cost averaging
Method of purchasing securities by investing a fixed amount
of money at set intervals.
Fixed income instruments
Instruments that pay a fixed dollar amount, such as bonds
and treasury bills.
Fund manager
The person whose responsibility is to oversee the allocation
of the pool of money invested in a particular unit trust.
The fund manager is charged with investing the money to attain
the returns and level of risk of the unit trust investors.
Hedge fund
A fund that may employ a variety of techniques to enhance
returns, such as both buying and shorting stocks according
to a valuation model.
Initial public offering (IPO)
A company's first sale of stock to the public.
Intraday
Term meaning "within the day," often to refer to
the high and the low price of a stock.
Listed firm
A company whose stock trades on a stock exchange.
Managed account
An investment portfolio entrusted to a manager who decides
how to invest it.
Margin
Allows investors to buy securities by borrowing money from
a broking house. The margin is the difference between the
market value of a stock and the loan made.
Margin account
A leverageable account in which stocks can be purchased for
a combination of cash and a loan. The loan in the margin account
is collateralized by the stock; if the value of the stock
drops sufficiently, the owner will be asked to either put
in more cash, or sell a portion of the stock. Margin rules
are regulated, but margin requirements and interest may vary
among broking houses.
Margin call
A demand for additional funds because of adverse price movement.
Mark-to-market
Adjustment of the value of a security to reflect current market
value.
Odd lot
A trading order for less than the actual board lot.
Over-the-counter (OTC)
Not listed or traded on the exchange.
Portfolio
A collection of investments.
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