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A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z |
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| AIM Our market for fledgling companies. Arbitrage/ Buying securities in one country, currency or market, and selling in another to take advantage of price differences. At best order An order submitted to the electronic order book with a specified size which may execute, either in part or full, against eligible orders at the price of those orders with any unexecuted portion being rejected from the book. |
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| Basket A contract or other instrument for the purchase or sale of equity market securities, which comprise a pre-defined group of securities. Bear An investor who sells a security in the hope of buying it back at a lower price, as he thinks the market will go down. A bear market is a falling market in which bears would prosper. Bid price The buying price for securities in the market. Big Bang 27 October 1986, when our new regulations took effect and the automated price quotation system was introduced. Bonds Debt securities which generally entitle the holder to a fixed-rate of interest during their life and repayment of the amount of the bond at maturity. Broker/dealer An Exchange member firm, which provides advice and dealing services to the public and can deal on its own account. Bull An investor who buys a security in the hope of selling it at a higher price, as he thinks the market will go up. A bull market is a rising market in which bulls would prosper. |
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| Capitalisation issue An issue whereby funds from a company's reserves are converted into shares which are issued free of charge to the company's shareholders. Covered warrant CREST |
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| Daily Official List (DOL) The daily record setting out the prices of all trades in securities conducted on the Exchange. Debt Management Office (DMO) An Executive Agency of the Treasury, which has responsibility for issuing gilts to fund the Government's borrowing activities. Global Depositary Receipt (GDR) Certificate which represents ownership of a given number of a company's shares and which can be listed and traded independently from the underlying shares. DIP The Direct Input Provider service enables companies to deliver price sensitive announcements electronically to the Exchange's Regulatory News Service via a modem link. Dividend That part of a company's profits after tax which is distributed to shareholders - usually expressed in pence per share. |
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| Euro Depositary Receipt (EDR) As with other depositary receipts, the EDR is a certificate representing ownership of the issuer's underlying shares. The EDR is denominated and quoted in euros. EDS Electronic Data Services gives historical turnover information about securities traded on the Exchange. Equity The risk-sharing part of a company's capital, usually made up of ordinary shares. Eurobond An interest-bearing security issued across national borders, often in a currency other than that of the issuer's home country. Execute and eliminate order An order submitted to the electronic order book with a specified size and limit price which may execute, either in part or in full, against eligible orders at the price of those orders with any unexecuted portion being rejected from the order book. extraMARK Went live in April 2000. The London Stock Exchange market for innovative investment companies and products, is dedicated to providing investors with special investment opportunities. ETFs They are collective investment vehicles which track indices - they can allow low cost exposure to the performance of an index as quickly and efficiently as the most liquid UK stocks. |
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| FTSE indices Indices, including the FTSE 100 index, which are calculated and maintained by FTSE International Ltd to illustrate the performance of various sectors of the UK and European markets. Fill or kill order An order submitted to the electronic order book with a specified size and, at the option of the member firm, a specified limit price which either executes in full against eligible orders at the price of those orders or is rejected in full from the order book. Fixed-interest securities Securities which attract a fixed rate of interest each year. Flotation When a company's shares are admitted to trading on the Exchange. FSA Financial Services Authority. The agency appointed by the Government to oversee the regulation of the investment industry. On 1 December 2001 the FSA assumed its full powers and responsibilities under the Financial Services and Markets Act 2000. It is now the single statutory regulator responsible for regulating deposit taking, insurance and investment business. The Securities and Futures Authority (SFA) and the other self regulating organisations which formerly authorised and regulated investment businesses, under the umbrella of the FSA, no longer separately exist. Futures A futures contract is a contract to buy or sell securities or other goods at a future date at a pre-determined price. |
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| GEMMs Gilt-edged market makers. Gilts or gilt-edged securities Debt securities issued on behalf of the Government. |
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| Index A relative expression of the weighted value of a group of securities used as a performance indicator (see FTSE indices). Insider dealing The purchase or sale of securities by someone who possesses 'inside' information affecting securities which has not yet been made available to the market and which, if made available, would significantly affect the share price. In the UK such deals are a criminal offence. Investment trust A collective investment fund in the form of a listed company which holds a portfolio of securities on behalf of its own shareholders. Because an investment trust is itself a listed company, its shares can be bought and sold in the usual way. |
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| LIFFE London International Financial Futures and Options Exchange. Limit order An order submitted to the electronic order book with a specified size and price which is either held on the order book or executes, either in part or full, against eligible orders with any remaining unexecuted portion being added to the order book. Liquidity Ease with which a security can be traded on the market. Listed company A company whose securities have been admitted to the Official List of the UK Listing Authority. Listing particulars An information booklet (also called a prospectus) detailing information on the company, its accounts and directors, and the securities to be listed. LMIL London Market Information Link is our main source of UK financial data for market professionals and information vendors. |
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| Main market Our main market for UK and international securities. Mandatory quote period The time (08.00-16.30) when market makers on SEAQ and SEAQ International are obliged to make firm two-way quotes for the securities in which they are registered. Market maker An Exchange member firm which is obliged to offer to buy and sell securities in which it is registered throughout the mandatory quote period. Member firm An investment firm which is a member of the Exchange and which may deal in securities on our market on behalf of its clients, or on behalf of the firm itself. MTN Medium-term note. An unsecured note issued in a euro-currency with a maturity of 3 to 6 years. |
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| New issue An issue of shares when a company comes to the market for the first time - or issues extra shares. Nominated adviser Exchange-approved adviser for AIM companies. AIM companies must retain a nominated adviser at all times. Normal Market Size calculation (NMS) Normal market size (for the domestic equity market) is calculated for each security and based on a percentage of the security's average daily customer turnover in the preceding year. The percentage is intended to represent the normal institutional bargain. The percentage is set at 2.5%. |
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| Offer price The selling price for securities in the market. Offer for sale A method of bringing a company to the market. The public can apply for shares directly at a fixed price. Details of the sale must be printed in a national newspaper. Official List The UK Listing Authority's list of all listed securities. Option The right (but not the obligation) to buy or sell securities at a fixed price within a specified period. Order book Introduced on 20 October 1997. FTSE 100 stocks are traded on an electronic order book (instead of the SEAQ quote system). When bid and offer prices match, new incoming orders automatically execute against orders on the book. Ordinary shares The most common form of share. Holders may receive dividends in line with the company's profitability and recommendation of its directors. |
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| Portfolio A collection of securities owned by an investor. POTAM Panel on Takeovers and Mergers, which regulates conduct of takeovers and mergers in the UK. Preference shares These are normally fixed-income shares whose holders have the right to receive dividends before ordinary shareholders. If a company were to go into liquidation, preference shareholders would rank above ordinary shareholders for the repayment of their investment in the company. Price/Earnings ratio (P/E ratio) The P/E ratio is a measure of the level of confidence investors have in a company (rightly or wrongly). Generally, the higher the figure, the higher the confidence. It is calculated by dividing the current share price by the last published earnings per share - where earnings per share is net profit divided by the number of ordinary shares. Price sensitive information Information which, if made public, is likely to have a significant effect on the price of a company's securities. Such information must, in connection with the listed company, be reported to RNS. Primary market The function of a stock exchange in bringing securities to the market for the first time. Money is raised either for the owners before flotation of the company or to fund future growth. Privatisation Conversion of a state-run company to public limited company status - often accompanied by a sale of its shares to the public. Private company A company which is not a public company and which is not allowed to offer its shares to the general public. Prospectus See Listing particulars. Public limited company (plc) A company which has shares that can be purchased by the public and which has a share capital not less than a statutory minimum. Not all plcs are listed companies. |
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| Registrar An organisation responsible for maintaining a company's share register. RIE Recognised Investment Exchange which meets the FSA requirements for recognition. Rights issue An invitation to existing shareholders to purchase additional shares in the company. RNS The Exchange's Regulatory News Service which ensures that price sensitive information in relation to UK listed and AIM companies, is disseminated in a timely and secure manner to all investors, either via information vendors or directly through the Exchange's website. |
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| SEAQ The Stock Exchange Automated Quotations system for UK securities. A continuously-updated computer database containing price quotations and trade reports in UK securities. SEAQ International The Stock Exchange Automated Quotations system for international equities. SEATS PLUS Supports the trading of all AIM and listed UK equities whose turnover is insufficient for the market making system or SETS. Secondary market Marketplace for trading in securities. Securities General name for stocks and shares of all types. SETS Stock Exchange Electronic Trading Service, otherwise known as the order book. Settlement The process of transferring stock from seller to buyer and arranging the corresponding movement of money between the two parties (see CREST). SFA Please see under FSA. Shares See Ordinary shares, Preference shares, Securities. SMF Securities Masterfile provides up-to-date information on securities traded on UK and international markets. SSNs Stock Situation Notices which contain extensive details of a corporate action. Stockbroker An Exchange member firm which provides advice and dealing services to the public and which can deal on its own account. |
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| techMARK Launched November 1999. This market groups together technology companies from across the main market. It has its own indices, the FTSE techMARK 100 and the FTSE techMARK Allshare. Touch The best buying and selling prices available on SETS or from a market maker on SEAQ or SEAQ International in a given security at any one time. |
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| UKLA The Financial Services Authority acting in its capacity as the competent authority for listing in the United Kingdom. Underwriting An arrangement by which a company is guaranteed that an issue of shares will raise a given amount of cash. Underwriters undertake to subscribe for any of the issue not taken up by the public. They charge commission for this service. Unit trust A collective investment fund in the form of a trust which holds a portfolio of securities on behalf of the investors who hold units in the trust. USM Unlisted Securities Market set up in 1980 to provide an easier route to the market for small or new companies. The market closed at the end of 1996. (USM companies could move to the main market or AIM.) |
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| VWAP Volume Weighted Average Price, which is calculated by dividing the value of trades by the volume over a given period. A closing 10 minute VWAP is used to set closing prices on the order book. |
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| Warrants Securities giving the holder a right to subscribe to a share or a bond at a given price and from a certain date. |
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| Yellow strip The yellow band on a SEAQ or SETS screen which displays the highest bid and the lowest offered prices that competing market makers are offering in a security. They are known colloquially as the 'touch' or 'yellow strip' prices. Yield The return earned on an investment taking into account the annual income and its present capital value. There are a number of different types of yield, and in some cases different methods of calculating each type. |
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