Glossary of stock market terms

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  • 5
  • 51% attack
    If more than half the computer power or mining hash rate on a network is run by a single person or a single group of people, then a 51% attack is in operation. This means that this entity has full control of the network and can negatively affect a cryptocurrency by taking over mining operations, stopping or changing transactions, and double-spending (reusing) coins.

  • a
  • AC 133
    A statement of South African Generally Accepted Accounting Practice (GAAP) covering the recognition and measurement of Financial instruments in Financial Statements

  • Accomodation
    The provision of Borrowing facilities by the SARB to depository institutions in the private sector.

  • Accreting swap
    A swop with an increasing notional principal

  • Accrued Interest
    Interest that has accumulated on a security but not yet paid.

  • Actuarial Liability
    The liability of a retirement fund benefit claculated as the amount by which future retirement benefits payable exceed the actuarial value of the fund.

  • Actuarial value of Assets
    The value following actuarial practice, placed upon the assets of a retirement fund for the purpose of the purpose of valuing the fund.

  • Airdrop
    A marketing campaign that distributes a specific cryptocurrency or token to an audience. It is usually initiated by the creator of a cryptocurrency in order to encourage use and build popularity of the coin or token. Most airdrop campaigns run with mechanics such as receiving coins or tokens in exchange for simple tasks like sharing news, referring friends or downloading an app.

  • All-in discount rate
    The price at which a private sector security is sold including the cost of interest, commission and stamp duty.

  • All-in price of a bond
    Refers to the total amount that an investor pays for a bond, taking into account the accrued interest.

  • Allotment
    When securities are issued on a tender basis, allotment refers to the allocation of securities to the various participants during an auction.

  • ALSI 40
    An index of the top 40 companies listed on the JSE Ltd by market capitalisation.

  • Altcoin
    A cryptocurrency that is not Bitcoin. There are thousands of altcoins with varying values and use cases.

  • Alternative Risk Transfer (ART)
    Non- traditional methods of insuring and reinsuring utilising the capital markets.

  • ALTX
    AltX is an alternative public equity exchange for small and medium-sized companies in South Africa operated in parallel with and wholly owned by the JSE Securities Exchange

  • American Option
    An option that can be exercised at any time up to and including its expiring date.

  • American Tendering system (American option)
    A tendering procedure used by the SARB in its regular bill auctions, according to which bids are allotted sequetially in descending order of price.

  • Amortising swap
    A swap with a decreasing notional principal

  • Appreciation
    An increase in the value or price of an asset.

  • Arbitrage
    The exploitation of pricing anomalies in financial markets to generate risk-free or low-risk profits. Aka. The simultaneous buying and selling of securities, currency, or commodities in different market regions to take advantage of differing prices for the same asset.

  • Asian option
    An option contract where the payoff value is calculated from the average price of the underlying security over a specified period of time.

  • Ask price
    The price a seller of an asset is willing to accept.

  • Asset management
    Asset management is the direction of all or part of a client's portfolio by a financial services institution

  • At-the-Money
    At the money (ATM) is a term used to describe an options contract with a strike price that is identical to the underlying market price. At the money options see a lot of trading activity, because they are so close to becoming profitable

  • b
  • Backwardation
    Is when the current price of an underlying asset is higher than prices trading in the futures market.

  • Balance of payments
    A summary statement of a country's economic transactions with the rest of the world over a certain period of time.

  • Balance of trade
    The account forms part of the current account of the balance of payments and refers only to the difference between the value of exports and imports.

  • Bancassurance
    An alliance between an insurance and banking entity, principally to harness the distribution channels of the latter for, e.g., pensions and life assurance products.

  • Bank for International Settlements (BIS)
    International organisation based in Basle, Switzerland that serves as a forum for central banks collecting information, developing analyses and cooperating on a wide range of policy-related matters.

  • Bankers' acceptance (BA)
    A tradable short-term debt instrument, primarily issued to finance the export, import, shipment or storage of goods.

  • Barrier option
    An option contract, which may either come into existence, or, more commonly, cease to exist, if the market price of the underlying asset reaches a certain level before the official maturity of the option.

  • Base currency
    The currency that appears on the left-hand side of exchange rate notation, e.g. the USD in USD/JPY, and which is the unit of 1 in the quotation.

  • Basel Committee
    A committe reporting to the central bank governer of the Group of 10 countries, responsible primarily for the promulgation of best-practice statements concerning international banking supervision. The architect of the first and second Basel Capital Accords.

  • Basis risk
    The risk that the futures maket and cash market are not perfectly correlated. The risk that a hedge does not match the precise economic characteristics of an exposure.

  • Basket option
    An option on more than one underlying security.

  • Bear
    Bears are traders who believe that a market, asset or financial instrument is heading in a downward trajectory. In that regard, they hold an opposite view to bulls, who believe that a market is going upwards.

  • Bear Trap
    A bear trap is a false technical indication of a reversal from a down- to an up-market that can lure unsuspecting investors.

  • Bearish Engulfing pattern
    A bearish engulfing pattern can occur anywhere, but it is more significant if it occurs after a price advance. This could be an uptrend or a pullback to the upside with a larger downtrend

  • BEASSA Total return indices
    Indices complied by the Bonds Exchange of South Africa and the Actuarial Society of South Africa to provide a measure of the total return of representatives bond portfolios.

  • BESA (Bond Exchange of South Africa)
    A financial exchange in South Africa, primarily facilitating the trade of debt securities and interest rate derivatives.

  • Beta coefficient
    A measure of correlation between an individual security's return and the return on the market as a whole.

  • Bid
    The price a buyer is prepared to pay for a security.

  • Bill of exchange
    A short-term negotiable debt instrument issued by the non-bank corporate sector.

  • Bitcoin
    The first cryptocurrency built on a blockchain and capped at 21 million units. Created by Satoshi Nakamoto in 2009, Bitcoin is the original cryptocurrency.

  • Bitcoin Cash
    A cryptocurrency, with bigger block size, which hard-forked from Bitcoin on 1 August 2017. It is intended to let miners process more transactions per block.

  • BitLicense
    A business license issued to cryptocurrency companies in New York, created and provided by the New York State Department of Financial Services (NYSDFS).

  • Bits
    A sub-unit of one bitcoin. There are 1,000,000 bits in one bitcoin.

  • Black and Scholes
    The option-pricing model developed by Fischer Black and Myron Scholes.

  • Block Explorer
    An online tool to view all transactions that has taken place on the blockchain, network hash rate and transaction growth, among other useful information.

  • Block Height
    The number of blocks preceding the block in question on the blockchain, or can be thought of as total blocks in the chain before this point.

  • Block reward
    The new coins issued to miners when they have successfully mined a block of transactions on the Bitcoin (or any other cryptocurrency) network.

  • Blockchain
    Blockchain is a specific type of database. It differs from a typical database in the way it stores information; blockchains store data in blocks that are then chained together. As new data comes in it is entered into a fresh block. Once the block is filled with data it is chained onto the previous block, which makes the data chained together in chronological order. Aka. A decentralised network that records transactions, much like a traditional ledger. These transactions can be any movement of currency, goods or secure data.

  • Blocks
    Contain transactional information. Blocks can be thought of as the pages of a ledger.

  • Blue chip stocks
    A blue-chip stock is a huge company with an excellent reputation. These are typically large, well-established and financially sound companies that have operated for many years and that have dependable earnings, often paying dividends to investors.

  • Bond
    A debt instrument that promises that the issuer (the borrower) will pay the holder (the investor) interest over a certain period of time and repay the face value at maturity.

  • Book reserve
    A provision in a company's accounts for a future benefit liability for which no funds have been set aside.

  • Bootstrapping
    A method of calculating zero-coupon interest rates from coupon bonds.

  • Borrower's swap
    An interest rate swap whereby a borrower of money agrees to pay a fixed interest rate and receive a floating interest rate.

  • Boundary
    A limit on the fair value of a financial instrument which, if exceeded, could permit arbitrage.

  • Brexit
    Brexit is a portmanteau of the words "British" and "exit" coined to refer to the U.K.'s decision in a June 23, 2016 referendum to leave the European Union (EU).

  • Bridging bonds
    Short-term unsecured securities issued by public and semi-public sector bodies to acquire bridging finances, i.e. cash flow shortfalls that often arise due to mismatches between revenues and expenditures.

  • Broken date
    A date that does not match the dates available for trade on an exchange.

  • Broker
    Financial intermediaries that act as agents on behalf of other financial market participants (principals) in return for a commission.

  • Brrr
    The phrase was first used in the widely-shared Money Printer Go Brrr meme, which depicted the U.S. Federal Reserve printing money to combat a predicted, rona-induced economic downturn.

  • Bull
    A bull investor believes that the market will increase in value over time.

  • Bull Market
    A bull market is the condition of a financial market in which prices are rising or are expected to rise

  • Bull Trap
    A bull trap denotes a reversal that forces market participants on the wrong side of price action to exit positions with unexpected losses.

  • Bullet interest and capital loan
    A loan where both interest and capital are only repaid at maturity.

  • Bullet loan
    A loan where only interest is repaid during its term, with the capital being repaid at maturity.

  • Burned
    When a coin or token has been made permanently unspendable or unusable.

  • Business confidence index (BCI)
    Business Confidence Index (BCI) is a leading indicator of future developments in the country. This index is built with the opinions taken during regular surveys asking about progress in production, sales, orders, and stocks of finished goods in the manufacturing sector.

  • Business cycle
    The upward and downward movement of aggregate output produced in the economy.

  • Buy back
    A buyback is when a corporation purchases its own shares in the stock market.

  • Buy limit order
    A buy limit order is an order to purchase an asset at or below a specified maximum price level.

  • Buy side
    Buy-side is a segment of Wall Street made up of investing institutions that buy securities for money-management purposes.

  • buy stop order
    A buy stop order instructs a broker to purchase a security when it reaches a pre-specified price. Once the price hits that level, the buy stop becomes either a limit or a market order, fillable at the next available price.

  • Buy the dips
    Buying the dips refers to buying an asset after it has declined in price. Buying the dips can be profitable in long-term uptrends, but unprofitable or tougher during downtrends.

  • Buy to cover
    Buy to cover refers to a buy trade order that closes a trader's short position

  • Buy to open
    A buy-to-open order is generally used by traders to open positions in a given option or stock.

  • Buyer's Market
    A buyer's market refers to a situation in which supply exceeds demand, giving purchasers an advantage over sellers in price negotiations.

  • Buying on margin
    Buying on margin occurs when an investor buys an asset by borrowing the balance from a bank or broker.

  • c
  • Call Bonds
    Short-term negotiable commercial paper issued by large corporates or parastatals. A money market security not to be confused with callable bonds.

  • Call option
    An option contract permitting the holder the right but not the obligation to buy a specified underlying asset at a pre-agreed price.

  • Call protected bonds
    Bonds that cannot be redeemed before the expiry date.

  • Call warrant
    A call warrant is a financial instrument that gives the holder the right to buy the underlying stock shares at a specific price on or before a specified date.

  • Callable bonds
    Bonds that are redeemable prior to maturity at the discretion of the issuer.

  • Can-do option
    Innovative option contracts available on the JSE Ltd with customisable features similar to over-the-counter options.

  • Cap
    A series of interest rate options providing protection against a rise in interest rates.

  • Capital
    Assets with which a company generates income or additional assets. Capital can also include the reserves of undistributed profit retained by the company.

  • Capital adequacy requirements
    The minimum amount of capital held by a bank to cushion unexpected losses from its lending and other activities, as required by the central bank.

  • Capital controls
    Capital controls are residency-based measures such as transaction taxes, other limits, or outright prohibitions that a nation's government can use to regulate flows from capital markets into and out of the country's capital account.

  • Capital Flight
    The withdrawal of capital from a country due to the desire of investors to place such capital beyond the reach of the domestic authorities.

  • Capital Market
    Equity and bond markets.

  • Capital project bills
    Short-term securities usually issued by large companies or parastatals to raise funds for the maintenance of certain capital projects.

  • Carry cost
    The theoretical difference between the futures or forward price of an instrument and the current cash market price.

  • Carry trades
    The act of borrowing one currency at a relatively lower interest rate and simultaneously investing the borrowed funds in another currency at a relatively higher interest rate.

  • Carry transactions (carries or sell/buy backs)
    Repo transactions in the South African financial markets between two parties of which neither is the South African Reserve Bank.

  • Cartel
    A consortium of independent institutions formed to limit competition in an industry by, inter alia, controlling supply and prices.

  • Cash Market
    The underlying market for a financial instrument or commodity. Cash markets are not derivatives markets.

  • Cash Settlement
    Settlement of a derivative is made in cash rather than by physical delivery of the underlying instrument.

  • Catastrophe bonds (CAT bonds)
    Interest-bearing instruments where the amount of interest, coupon or principal repaid is determined by the occurance and magnitude of a defined natural catastrophe.

  • CBOT
    Chicago Board of Trade, a US derivatives exchange.

  • Central Bank
    The principal monetary authority of a country which performs several key functions, including issuing currency and regulating the supply of credit in the economy.

  • Central bank intervention
    The buying or selling of currency, foreign or domestic, by central banks in order to influence market conditions or exchange rate movements.

  • Chain Split
    Another term used to describe Fork.

  • Change
    Bitcoin transactions are made up of inputs and outputs in a system called Unspent Transaction Output. When you send bitcoins, you can only send them in a whole output, and the rest are sent back as change.

  • Choice price
    When the bid and offer prices of an instrument are equal.

  • Claim
    A right held by an owner of a security in relation to the issuer of the security, i.e. a debt or equity instrument. Claims are reversible (marketable) or non-reversible (non-marketable).

  • Clean float
    An exchange rate system in which the authorities do not intervene in the markets and allow the exchange rate to be determined entirely by private market forces.

  • Clean price of a bond
    The price of a bond excluding accrued interest.

  • Clearinghouse
    The entity which operates as the counterparty to all trades on a derivatives exchange and which is responsible, inter alia, for the settlement of accounts and monitoring of margin payments.

  • Close-out
    To terminate a derivative position in the market before expiry, by taking an equal and opposite position.

  • Cloud Mining
    Mining with remote processing power rented from companies operating outfits in countries like Iceland, where the electricity is abundant and cost-efficient, and the ambient temperature is cold year-round. Another term for this is mining contract.

  • CME
    Chicago Mercantile Exchange, a US derivatives exchange.

  • Cold storage
    A wallet that is kept offline. This is a security measure to prevent unauthorised access.

  • Collar
    The simultaneous purchase of a call option and the sale of a put option or vice versa, usually to limit or totally avoid the payment of a premium.

  • Collateral
    Property or other assets that is offered to secure a loan or other credit and that becomes subject to seizure on default.

  • Collateral asset
    A financial security which is accepted by the South African Reserve Bank as collateral asset when banks want to borrow funds under the repo system.

  • COMEX
    Commodity Exchange of New York, a US derivatives exchange.

  • Commercial bank
    A bank that offers a broad range of deposit accounts, including cheque, savings and time deposits and extends loans to individuals and businesses. Commercial banks can be contrasted with investment banking firms, which are generally involved in arranging for the sale of corporate or municipal securities.

  • Commercial paper
    A collective name used to describe short- or medium-term securities issued by corporates and other non-banking institutions to acquire working capital.

  • Commitment of Traders report (COT)
    The interest that the issuer promises to pay to the bondholder during the life of the bond. This is normally expressed as a percentage per annum and may be fixed interest rate or a variable interest rate.

  • Commodities market
    The surrending of a part or the entire pension payable from a retirement fund for an immediate lump sum.

  • Commodity Future Market
    A commodity futures contract is an agreement to buy or sell a predetermined amount of a commodity at a specific price on a specific date in the future. Commodity futures can be used to hedge or protect an investment position or to bet on the directional move of the underlying asset.

  • Commutation
    The concentration ratio compares the size of firms in relation to their industry as a whole.

  • Concentration ratio
    The probability that a variable will lie within a given range of possible values in a probability distribution.

  • Confidence interval
    The amount payable by the buyer or received by the seller when a security is traded.

  • Consideration
    A measurement of the cost of living determined by Statistics South Africa.

  • Consumer price index (CPI)
    When the futures price of a security is higher than the current market price.

  • Contango
    A financial contract where settlement is explicitly via cash settlement and not by physical delivery.

  • Contract for difference (CFD)
    A period during which employers' and/or members' retirement fund contributions are temporarily suspended, normally when the fund is in surplus.

  • Contribution holiday
    A measure of the benefit of holding a physical commodity rather than the corresponding derivative contract.

  • Convenience yield
    Bonds that grant the bondholder the option to convert the bond into a predetermined number of shares of the issuer.

  • Convertible bonds
    Preference shares thar may be converted to common shares. This may be voluntary or compulsory.

  • Convertible preference shares
    A statistical measure of the degree of association of two variables.

  • Correlation
    The Commitments of Traders is a weekly market report issued by the Commodity Futures Trading Commission enumerating the holdings of participants in various futures markets in the United States

  • Coupon
    Unsecured short-term securities issued by Transnet. They fulfil a purpose similar to that of bridging bonds.

  • Coupon stocks
    A measure of the degree to which the returns on two securities are related.

  • Covariance
    A covered call is a call option trading strategy. It involves holding an existing long position on a tradeable asset, and writing (selling) a call option against the same asset, with the aim of increasing the overall profit that a trader will receive

  • Covered Call
    Investing in a foreign money market to benefit from a relatively higher interest rate and covering the exchange rate risk in the forward exchange market.

  • Covered interest arbitrage
    An equilibrium condition in which the forward exchange rate equals the spot exchange rate adjusted by interest rate differentials between the currencies concerned, such that the return on the domestic asset equals the return on the equivalent foreign currency asset.

  • Covered interest parity
    A version of the consumer price index (CPI) characterized by the exclusion of interest rates on mortgage bonds from the basket of goods and services included in the CPI. The CPIX is used by the monetary authorities in South Africa for setting inflation targets or bands.

  • CPIX
    A derivative contract for the transfer of credit risk.

  • Credit derivative
    A facility offered to a client permitting borrowing or dealing without margin or collateral requirements.

  • Credit line
    A published ranking by a credit bureau of a bond issuer's financial soundness - specifically its ability to service debt obligations.

  • Credit rating
    The risk that an obligation will not be honoured by a counterparty.

  • Credit risk
    The spread between government bonds and non-government bonds that are identical in all respects except credit quality.

  • Credit spread
    The exchange rate between two currencies, neither of which is the US dollar.

  • Cross rate
    A computerised custodial service for securities.

  • Crude Oil
    Crude oil is the raw natural resource that is extracted from the earth and refined into products such as gasoline, jet fuel, and other petroleum products.

  • Crypto Currency
    A cryptocurrency is a new form of digital asset based on a network that is distributed across a large number of computers. This decentralized structure allows them to exist outside the control of governments and central authorities.

  • Crypto Token
    Cryptocurrencies are digital currencies used to facilitate transactions (making and receiving payments) along the blockchain.

  • Cryptocurrency
    Any digital currency that uses cryptography to validate and secure transactions.

  • Cryptography
    The practice and study of techniques for secure communication in the presence of third parties called adversaries. In the context of cryptocurrency, cryptography validates and secures transaction information.

  • CSD (Central Securities Depository)
    The purchaser of a bond buys the bond at a price that includes the next coupon payment. Since the buyer gets the full coupon, the all-in price compensates the bond seller for the interest he is entitled to.

  • Cum Interest
    A form of preference share where the holder is entitled to dividend payments prior to any dividend distributions to ordinary shareholders. If the company does not have the funds available to pay dividends, the dividends on cumulative preference shares accrue until fully paid.

  • Cumulative preference shares
    A deliberate downward adjustment in the value of a currency by domestic authorities.

  • Cup and Handle
    A cup and handle is a technical chart pattern that resembles a cup and handle where the cup is in the shape of a "u" and the handle has a slight downward drift.

  • Currency devaluation
    A currency future is a contract that details the price at which a currency could be bought or sold, and sets a specific date for the exchange.

  • Currency options
    A currency peg is a governmental policy of fixing the exchange rate of its currency to that of another currency, or occasionally to the gold price. It can sometimes also be referred to as a fixed exchange rate, or pegging

  • Currency pegs
    A deliberate upward adjustment in the value of the currency by domestic authorities.

  • Currency revaluation
    The difference between a country's total export of goods, services and transfers, and its total imports. Current account balance calculations exclude transactions in financial assets and liabilities.

  • Current account balance
    An account managed by the South African Reserve Bank on behalf of the member countries of the Southern African Customs Union.

  • Custodial (wallet)
    Usually referring to the storage of keys in relation to wallets or exchanges, a custodial set-up is one in which private keys are being held by the service provider while they provide a login account. *see Non-custodial.

  • d
  • Day order
    A day order is a type of order, or instruction from a trader to their broker, to buy or sell a certain asset.

  • Day trading
    Day trading is a strategy of short-term investment that involves closing out all trades before the market closes.

  • Debt instruments
    Securities representing the debt of borrowers. Examples are government bonds, Treasury bills, bankers' acceptance and negotiable certificates of deposit.

  • Debt ratio
    The debt ratio measures the amount of leverage used by a company in terms of total debt to total assets.

  • Decentralised
    A governance protocol, characterised by distributing control and authority amongst all participants. Bitcoin is decentralised because many different miners secure the network. As opposed to a centralised network, like banking, where one authority such as the central bank makes decisions.

  • Decentralized Applications (DApps)
    A type of application that runs on a decentralized network, avoiding a single point of failure.

  • Decentralized Exchange (DEX)
    A peer-to-peer exchange that allows users to buy and sell cryptocurrency and other assets without a central intermediary involved.

  • Default
    A default occurs when a borrower is unable to make timely payments, misses payments, or avoids or stops making payments entirely on interest or principal owed.

  • Default rate
    The default rate is the percentage of all outstanding loans that a lender has written off after a prolonged period of missed payments.

  • Default swaps
    A type of credit derivative.

  • Deferred-coupon bonds
    Bonds on which the payments of coupon are postponed for a few years, after which they start paying coupons, usually at a higher rate than if the issuer had paid coupons for the whole term.

  • Deferrred member
    A member of a retirement fund who no longer contributes to the fund but who has accrued retirement benefits that will be payable at a future date.

  • DeFi
    DeFi (decentralized finance) is the creation of an ecosystem of financial tools built on blockchain. Also known as open finance, DeFi apps take traditional financial services and rebuild them as open and permissionless.

  • Deficit
    The amount each year by which government spending exceeds government income.

  • Delta
    A measure of the sensitivity of an option premium to changes in the underlying market price.

  • Delta hedging
    The hedging of an option position to minimise exposure to price movement in the underlying market price.

  • Demand deposit
    A bank deposit that may be withdrawn at any time without prior written notice to the depository institution.

  • Dematerialisation
    The final stage in the process of terminating the issuing of securities in paper form. Dematerialisation securities imply that their ownership exists only as an electronic accounting record.

  • Depository institution
    A financial institution, generally a bank, that obtains its funds mainly via deposit from the public.

  • Depreciation
    A decrese in the value or price of an asset.

  • Depression
    A depression is characterized as a dramatic downturn in economic activity in conjunction with a sharp fall in growth, employment, and production.

  • Derivatives
    Derivatives are financial products that derive their value from the price of an underlying asset. Derivatives are often used by traders as a device to speculate on the future price movements of an asset, whether that be up or down, without having to buy the asset itself.

  • Digital Currency
    Digital currencies are currencies that are only accessible with computers or mobile phones, as they only exist in electronic form.

  • Dilution
    The effect on the proportional interests of existing shareholders when a company issues new equity.

  • Direct financing
    Financing without the involvement of a financial intermediary.

  • Direct Market Access
    Direct market access (DMA) is a way of placing trades directly onto the order books of exchanges. As a result, DMA offers traders flexibility and transparency when trading. But due to the risks and complexities involved, it is usually recommended for advanced traders only.

  • Direct quotation
    An exchange rate quoted as the domestic price of foreign currency.

  • Discount house
    A financial institution that used to intermediate between the Reserve Bank and the banks. Its functions were taken over by banks themselves in 1991.

  • Discount rate
    The interest rate at which a discount security is issued and traded.

  • Discounting
    Calculating the present value of the future cash flow or series of cash flows.

  • Disintermediation
    The removal of intermediaries in a process. In finance this often relates to buyers and sellers or lenders and borrowers dealing directly with one another, and not via a bank.

  • Distributed Denial of Service (DDoS) Attack
    A cyber-attack in which the perpetrator seeks to make a machine or network resource unavailable, disrupting services of a host connected to the internet, by overloading the system with requests so that legitimate requests cannot be served.

  • Distributed Ledger
    Distributed ledgers are ledgers in which data is stored across a network of decentralized nodes. A distributed ledger does not necessarily involve a cryptocurrency and may be permissioned and private.

  • Distributed Ledger Technology (DLT)
    The technology underlying distributed ledgers. This term is most often discussed in the context of enterprise use cases around adoption of distributed ledger technology.

  • Divergence
    Divergence can occur between the price of an asset and almost any technical or fundamental indicator or data. Though, divergence is typically used by technical traders when the price is moving in the opposite direction of a technical indicator.

  • Diversification
    The holding of a variety of risky assets in order to minimise the exposure to any one.

  • Dividend
    A dividend is the portion of profit that a company chooses to return to its shareholders, usually expressed as a percentage.

  • Dividend rate
    A rate given by dividing the dividend in cents per share by the par value of the share.

  • Doves
    Doves are perceived as being more interested in spurring job growth through low-interest rates than they are in controlling inflation.

  • Down trend
    Downtrends are characterized by lower peaks and troughs and imply fundamental changes in the beliefs of investors.

  • Dual currency system
    A foreign exchange structure characterised by the use of two separate currencies.

  • Due Diligence
    The individual investor can conduct due diligence on any stock using readily available public information.

  • Duration
    The present value of the weighted average timing of all the cash flows associated with a certain bond. Duration is measured in years and is a weighted measure of when you will get your money back from a bond investment. Most of it is used as an indication of the volatility of bond prices.

  • Dust Transactions
    Minuscule transactions that flood and slow the network, usually deliberately created by people looking to disrupt it.

  • Dutch tendering system (Dutch auction)
    A tendering system (used in the Reserve Banks's bond auctions) in which all bidders are allotted their bonds at a single yield, known as the clearing yield. This is in contrast with the American tendering system.

  • Dynamic open market operations
    Open market operations that are intended to change the level of reserves and the monetary base.

  • e
  • E Mini
    E-mini is an electronically traded futures contract that is a fraction of the value of a corresponding standard futures contract.

  • Earinings per share (EPS)
    A measure of the income earned by the common shareholders during a specific period. It is calculated by dividing the net income available to the shareholders by the number of ordinary shares in issue.

  • Earning yield
    The earnings per share expressed as a percentage of the current market price of the share.

  • ECB
    When traders talk about the ECB, they are referring to the European Central Bank, the central bank for the eurozone

  • Economic cycle
    Economic cycle refers to the overall state of the economy going through four stages in a cyclical pattern.

  • Economic growth
    Economic growth is an increase in the production of goods and services in an economy.

  • Economic units
    Participating in an economy, usually categorised into non-financial (the household sector, the business sector, the foreign sector and the government sector), and the financial sector (all financial intermediaries).

  • Effective annual return
    The annualised return or yield earned by investing in a security after taking into account the interest that is earned on interim interest payments.

  • Effective exchange rate index
    An index reflecting the value of a basket of representative foreign currencies.

  • Electronic scrip register
    The electronic record which evidences the rights of owners to securities in a dematerialised market.

  • Embedded option
    An option that is contained within another financial instrument, e.g. a convertible bond which normally has an embedded option to convert to the equity of the issuer.

  • Employee share option
    An option granted to an employee of a company to purchase shares in that company.

  • Employment rate
    The percentage of the labour force that is employed. The employment rate is one of the ecoonomic indicators that economists examine to help understand the state of the economy.

  • Equity
    A financial instrument representing part ownership of a corporate entity.

  • ERC-20
    A token standard for Ethereum, used for smart contracts implementing tokens. It is a common list of rules defining interactions between tokens, including transfer between addresses and data access.

  • Escrow
    An escrow is a contractual arrangement in which a third party receives and disburses money or documents for the primary transacting parties, with the disbursement dependent on conditions agreed to by the transacting parties. This is possible to be automated using smart contracts on the blockchain.

  • Ether
    The form of payment used in the operation of the distribution application platform, Ethereum, in order to incentivize machines into executing the requested operations.

  • Ethereum
    Created by Vitalik Buterin, Ethereum is a distributed computing platform, a blockchain built to process transactions and other information, such as smart contracts. See our Learning Portal series about Ethereum.

  • Euro
    The common currency that, since 1 January 2002, has replaced the different national currencies of the member countries comprising the European Monetary Union.

  • Eurobonds
    Bonds that are issues outside the country of domicile of the issuer.

  • Europe, Middle East, and Africa (EMEA)
    Europe, Middle East, and Africa (EMEA) countries are a geographical division used by many multinational corporations.

  • European option
    An option that can only be exercised on its expiry date.

  • European Sovereign Debt Crisis
    The European sovereign debt crisis was a period when several European countries experienced the collapse of financial institutions, high government debt, and rapidly rising bond yield spreads in government securities.

  • Ex interest
    The bond price a purchaser pays for a bond which excludes the next coupon payment, i.e. the seller gets the full coupon payment.

  • Excess reserves
    The amount of reserves held by an institution in excess of its reserve requirement and required clearing balance.

  • Exchange
    A place where buyers and sellers meet to buy and sell an asset, like Bitcoin, shares or derivatives.

  • Exchange control
    The regulation and restriction of foreign exchange flows in a particular jurisdiction.

  • Exchange rate
    The price of one currency in terms of another.

  • exchange rate points
    Exchange rate points are normally quoted to four decimal places in the foreign exchange markets, thus a "point" is 1/10 000th of a currency unit.

  • Exchange traded fund (ETF)
    A traded financial instrument representing ownership of an underlying portfolio of securities.

  • Exchangeable bond
    A bond that grants the bondholder the option to convert to a predetermined number of shares of another company, which is usually in some way related to the issuing company.

  • Exchequer and Paymaster General's account
    An account of government managed by the South African Reserve Bank reflecting the inflow of funds (exchequer) and outflow of funds (Paymaster General).

  • Exercise price
    The pre-agreed price at which an option buyer can choose to transact the underlying cash flows to which the option relates.

  • Exotic
    A financial instrument with non-standard features or one which emanates from an illiquid or underdeveloped market.

  • Expiry date
    n financial markets, execution is the completion of a buy or sell order from a trader. It is carried out by a broker.

  • Exposure
    exposure is a general term that can mean three things: the total market value of your trades at open, the total amount of possible risk at any given point, or the portion of a fund invested in a particular market or asset

  • External value of a currency
    The purchasing power of a currency abroad.

  • Extrinsic Value
    Extrinsic value is the difference between the market price of an option, also knowns as its premium, and its intrinsic price, which is the difference between an option's strike price and the underlying asset's price.

  • f
  • Face value
    Fair value has two meanings to investors. Generally, it is used to mean the value attributed to a stock by an individual investor or broker but in futures trading, it can refer to the predicted price of a market which is reflected in the cost to open a position.

  • Fair value
    The theoretical value of a financial instrument that should prevent arbitrage.

  • Faucet
    A cryptocurrency reward system usually on a website or app, that rewards users for completing certain tasks. It is mostly a technique used when first launching an altcoin to interest people in the coin.

  • Fiat
    Conventional or government-issued money (your local currency).

  • Fiat currency
    Fiat money is a government-issued currency that isn't backed by a commodity such as gold.

  • Fibonacci retracement
    Fibonacci retracement levels connect any two points that the trader views as relevant, typically a high point and a low point.

  • Fill or Kill
    A Fill or Kill (FOK) order is an order that is directed to be executed immediately at the market or a specified price or canceled if not filled.

  • Financial Advisory and Intermdiary Services Act, 2002 (FAIS)
    An Act (No. 37 of 2002) that promotes consumer protection through the regulation of certain advisory and intermediary services to clients by financial firms, including banks.

  • Financial asset market
    A market in which financial assets or claims are traded, of which the foreign exchange market is an example.

  • Financial Instrumental Register (FIR)
    A computerised custodial service operated by the South AFrican Reserve Bank which keeps a record of certain money market instruments (such as Reserve Bank debentures, Land Bank bills and Treasury bills).

  • Financial Intelligence Centre Act (FICA)
    An Act (No. 38 of 2001) that requires banks and other financial institutions to obtain and retain appropriate information about each client, with the primary motivation to combat money laundering and financial terrorism.

  • Financial intermediaries
    Institutions that interpose themselves as principals between ultimate lenders and borrowers.

  • Financial regulators
    A collective term for the government-appointed organisations that are responsible for ensuring financial soundness and compliance among the financial institution of a country.

  • Financial stability
    Defined as price stability as well as stable conditions in the financial sector as a whole.

  • Fiscal policy
    The government's decisions about the amount of money it spends and collects in taxes.

  • Fixed exchange rate system
    Exchange rates between currencies that are set or "pegged" at predetermined levels and are not permitted to move in response to changes in supply and demand.

  • Fixed income market
    The money and bond markets, and their derivatives. Also called the interest-bearing market.

  • Fixed rate bonds
    Bonds with a fixed coupon rate, also called vanilla bonds.

  • Floating exchange rate system
    Refers to an exchange rate system in which the exchange rate is determined by the market forces of supply and demand without official intervention.

  • Floating Rate Notes (FRNs)
    Variable interets bonds on which the coupon rate is linked to a specific benchmark rate. This benchmark rate may be an index such as the consumer price index or another rate such as the prime rate.

  • Floor
    A series of options protecting the holder, usually an investor, against a fall in interest rates.

  • Flow equilibrium price
    The price that equates the demand for and supply of an item over a certain period of time.

  • FOMC
    The FOMC, or Federal Open Market Committee, is the branch of the Federal Reserve bank that is in charge of short and long-term monetary policy decisions.

  • Foreign currency bonds
    A bond issued by an issuer in a currency different from its domestic currency.

  • Foreign exchange
    Foreign currencies traded in a foreign exchange market.

  • Foreign exchange reserve
    Foreign exchange reserves are assets denominated in a foreign currency that are held by a central bank.

  • Foreign exchange swap
    A derivative that involves the temporary exchange of depositis in two currencies.

  • Foreign sector
    A term for all organisations, persons and assets resident or situated outside of the local economy.

  • Forward
    An over-the-counter derivative contract to buy or sell an instrument or commodity at a pre-agreed price.

  • Forward contract
    A forward contract is a contract that has a defined date of expiry. The contract can vary between different instances, making it a non-standardised entity that can be customised according to the asset being traded, expiry date and amount being traded.

  • Forward margin
    The difference between a forward and spot exchange rates.

  • Forward Rate Agreement (FRA)
    A cash-settled contract to exchange interest payment for a specified single period in the future.

  • Fourth market
    A market where buyers and sellers of equities trade directly with each other without the intermediation of brokers.

  • Free-float
    The weighting of the shares in an index by reference to that portion of the shares that is available for trading.

  • FSCA
    The FSCA is the market conduct regulator of financial institutions, that provide financial products and financial services, financial institutions that are licensed in terms of a financial sector law, including banks, insurers, retirement funds and administrators, and market infrastructures.

  • Fund managers
    A fund manager is responsible for implementing a fund's investment strategy and managing its trading activities.

  • Fundamental analysis
    A method of valuing shares based on the valuation of the company's fundamental ratios and includes, for example, utilising the return on assets and profit margin ratios.

  • Futures
    Futures are financial contracts obligating the buyer to purchase an asset or the seller to sell an asset and have a predetermined future date and price.

  • Futures contract
    An exchange-traded contract for delivery of a standard quantity of a specific underlying asset at a predetermined price and date in the future.

  • Futures exchange
    An organised environment where futures and options contracts are traded, and where a clearinghouse serves as an intermediary to ensure fulfilment of the contracts entered into by its members.

  • Futures Markets
    A futures market is an exchange where futures contracts are traded by participants who are interested in buying or selling these derivatives.

  • g
  • Gamification
    Gamification describes the incentivisation of people's engagement in non-game contexts and activities by using game-style mechanics

  • Gamma
    Gamma is the rate of change in an option's delta per 1-point move in the underlying asset's price.

  • Gap
    A gap is a discontinuous space in the price chart of an asset or security, often occurring between trading hours.

  • Gap Analysis
    A gap analysis is how an organization examines its current performance with its target performance.

  • Gapping
    A gap occurs when the opening price is above or below the previous closing price, with no trading activity in between.

  • Garman/Kohlhagen
    An option-pricing model for currency options.

  • Gas Limit
    A term used on the Ethereum platform that refers to the maximum amount of gas the user is willing to spend on a transaction.

  • Gas Price
    A term used on the Ethereum platform that refers to the price you are willing to pay for a transaction. Setting a higher gas price will incentivize miners to prioritize that transaction over others.

  • Gearing
    Gearing can be thought of as leverage, where it's measured by various leverage ratios, such as the debt-to-equity (D/E) ratio.

  • Genesis Block
    The first block of data that is processed and validated to form a new blockchain, often referred to as block 0 or block 1.

  • Global Bond
    A global bond is a type of bond that can be traded in a domestic or European market. It is a bond issued and traded outside the country where the currency of the bond is denominated.

  • Global Macro
    A global macro strategy is a hedge fund or mutual fund strategy that bases its holdings primarily on the overall economic and political views of various countries or their macroeconomic principles.

  • Global Macro Hedge Fund (GMHF)
    Global macro hedge funds make investment choices based on the broad economic and political outlook for various countries.

  • Global Recession
    A global recession is an extended period of economic decline around the world.

  • Global Registered Shares (GRS)
    A global registered share (GRS, or Global Share) is a security that is issued in the United States but is registered in multiple markets around the world and trades in multiple currencies.

  • Globalization
    Globalization is the spread of products, technology, information, and jobs across nations.

  • GLOBEX
    Globex is an electronic trading platform used for derivative, futures, options and commodity contracts across all asset classes. Developed for the Chicago Mercantile Exchange, CME Globex (as it is officially known) operates continuously, unrestricted by geographic borders or time zones.

  • Glocalization
    Glocalization is a combination of the words "globalization" and "localization." The term is used to describe a product or service that is developed and distributed globally but is also adjusted to accommodate the user or consumer in a local market.

  • Godfather offer
    A Godfather offer is an irrefutable takeover bid made to a target company by an acquirer.

  • Going Concern
    Going concern is an accounting term for a company that is financially stable enough to meet its obligations and continue its business for the foreseeable future.

  • Going-Concern Value
    Going-concern value is the idea that a company will continue to be in business and be profitable.

  • Going Private
    A going private transaction is one in which a public company is converted into private ownership.

  • Going Public
    The process of a company going public involves several important and sensitive steps that protect the company and potential investors.

  • Gold bug
    A gold bug is someone who expounds the virtues of gold as an investment, and who thinks its price will perpetually increase.

  • Gold Certificate
    The U.S. issued gold certificates that were identical in face value to their dollar denominations from 1879 until 1934 when the country abandoned the gold standard.

  • Gold option
    Gold options are options contracts that utilize either physical gold or gold futures as their underlying instrument.

  • Gold standard
    The gold standard is a fixed monetary regime under which the government's currency is fixed and may be freely converted into gold. It can also refer to a freely competitive monetary system in which gold or bank receipts for gold act as the principal medium of exchange; or to a standard of international trade, wherein some or all countries fix their exchange rate based on the relative gold parity values between individual currencies.

  • Golden Cross
    The golden cross is a chart pattern that is a bullish signal in which a relatively short-term moving average crosses above a long-term moving average.

  • Golden Handcuffs
    Golden handcuffs are a collection of financial incentives that are intended to encourage employees to remain with a company for a stipulated period of time.

  • Golden Handshake
    Golden handshakes are pre-negotiated employment agreements that provide a severance if the employee were to involuntarily leave their position early.

  • Golden Parachute
    Golden parachutes are lucrative severance packages inked into the contracts of top executives that compensate them when they are terminated.

  • Golden Rule
    The "Golden Rule" of government spending is a fiscal policy stating that a government should only increase borrowing in order to invest in projects that will pay off in the future.

  • Golden Share
    A golden share is a type of share that gives its shareholder veto power over changes to the company's charter.

  • Goldilocks Economy
    A Goldilocks economy describes an ideal state for an economy whereby the economy is not expanding or contracting by too much.

  • Good Credit
    Good credit is a classification for an individual's credit history, indicating the borrower has a relatively high credit score and is a safe credit risk.

  • Good Delivery
    Good delivery refers to the unhindered transfer of ownership of a security from a seller to a buyer, with all necessary requirements having been met.

  • Good Faith Estimate (GFE)
    A good faith estimate (GFE) details a fair assessment of the expected fees, costs, and terms associated with a potential mortgage.

  • Good Faith Money
    Good faith money acts as a security deposit towards completing a purchase.

  • Good This Week (GTW)
    A GTW order is one that expires automatically at the end of the current week.

  • Good 'Till Canceled (GTC)
    A Good 'Til Cancelled (GTC) order is an order that is working regardless of the time frame, until the order is explicitly cancelled.

  • Goodness-of-fit
    Goodness-of-fit tests are statistical tests aiming to determine whether a set of observed values match those expected under the applicable model.

  • Government deposits
    Deposits of the Treasury, the Department of Inland Revenue and the Commissioner for Customs and Excise.

  • Government sector
    Securities issued bythe Treasury.

  • Government securities
    government security applies to a range of investment products offered by a governmental body.

  • Graduate Record Examination (GRE)
    The graduate record examination (GRE) is a standardized exam used to measure one's aptitude for abstract thinking in the areas of analytical writing, mathematics, and vocabulary.

  • Grantors
    A grantor is an individual or other entity that creates a trust (i.e., the individual whose assets are put into the trust) regardless of whether the grantor also functions as the trustee. The grantor may also be referred to as the settlor, trustmaker, or trustor.

  • Gray List
    The gray list identifies the stocks that a risk arbitrage desk is restricted from trading by a brokerage or bank.

  • Gray Market
    The gray market for financial securities refers to unofficial, over-the-counter (OTC) transactions in a security.

  • Great Depression
    The Great Depression was the greatest and longest economic recession in modern world history.

  • Great Leap Forward (GLP)
    The Great Leap Forward was a five-year economic plan executed by Mao Zedong and the Chinese Communist Party, begun in 1958 and abandoned in 1961.

  • Great Moderation
    The Great Moderation is the name given to the period of decreased macroeconomic volatility experienced in the United States from the mid-1980s to the financial crisis in 2007.

  • Great Recession
    The Great Recession refers to the economic downturn from 2007 to 2009 after the bursting of the U.S. housing bubble and the global financial crisis.

  • Great Society
    The Great Society was a set of domestic policy initiatives, programs, and legislation that were introduced in the 1960s in the U.S. by then-President Lyndon B. Johnson.

  • Greater Fool Theory
    The greater fool theory states that you can make money from securities, whether they are overvalued or not, by selling them to a gullible investor or a greater fool.

  • Green Card
    The green card is a permanent resident ID issued to immigrants in the U.S.

  • Green Chip Stocks
    Green chip stocks are shares of environmentally-friendly companies.

  • Green-Field Investment
    In a green-field investment, a parent company creates a new operation in a foreign country from the ground up.

  • Green Fund
    Green funds are mutual funds or other types of investment vehicles that only invest in companies that promote socially and environmentally conscious policies and business practices.

  • Green Investing
    Green investing refers to investing activities aligned with a commitment to the promotion of environmentally friendly business practices and the conservation of natural resources.

  • Green Marketing
    Green marketing describes a company's efforts to advertise the environmental sustainability of their business practices.

  • Green Monday
    Green Monday is the second Monday in December and one of the busiest retail shopping days in the United States.

  • Greenback
    Greenbacks, or U.S. dollars, were first created to finance the civil war and were called as such because their backs were printed in green.

  • Greenmail
    Greenmail is a practice whereby a greenmailer buys up a substantial block of a company's shares and threatens a hostile takeover.

  • Greensheet
    A greensheet is a document prepared by an underwriter to summarize the main components of a new issue or initial public offering (IPO).

  • Greenspan Put
    Greenspan put referred to the need for protection against volatile price swings in the stock market.

  • Greenwashing
    Greenwashing is an attempt to capitalize on the growing demand for environmentally sound products.

  • Grexit
    Grexit, an abbreviation for "Greek exit," refers to Greece's potential withdrawal from the Euro-zone, and a return to the Drachma as its official currency instead of the Euro.

  • Grid trading
    Grid trading involves placing buy and sell orders at set intervals around a set price.

  • Grinder
    A grinder refers to an investor who tends to make small, consistent profits through relatively small trades.

  • Gross Dividends
    Gross dividends, for tax purposes, include all ordinary dividends plus capital gains distributions and non-taxable distributions.

  • Gross Domestic Income (GDI)
    Gross domestic income (GDI) is a measure of U.S. economic activity based on all the income earned while engaged in producing all the goods, services, and anything else that constitutes that economic activity.

  • Gross Earnings
    Gross earnings, for individuals, refer to the total income earned before the application of any tax deductions or adjustments.

  • Gross Expense Ration (GER)
    The gross expense ratio (GER) is the annual cost of investing in a mutual fund or ETF, or the portion of the assets earmarked for the cost of operating the fund.

  • Gross Exposure
    Gross exposure measures an investment fund's total exposure to financial markets, including long and short positions and use of leverage.

  • Gross Income
    Gross interest is the annual rate of interest to be paid on an investment, security, or deposit account before taxes or other charges are deducted.

  • Gross Income Multiplier
    A gross income multiplier is a rough measure of the value of an investment property.

  • Gross Income Test
    The gross-income test is one of the five necessary tests that dependents must pass before they can be claimed as such in the United States. The gross-income test mandates that dependents cannot earn more than a certain amount of income each year.

  • Gross Interest
    Gross interest is the annual rate of interest to be paid on an investment, security, or deposit account before taxes or other charges are deducted.

  • Gross lease
    A gross lease is a lease that includes any incidental charges a tenant might incur.

  • Gross margin
    Gross margin is a company's net sales revenue minus its cost of goods sold (COGS). In other words, it is the sales revenue a company retains after incurring the direct costs associated with producing the goods it sells, and the services it provides. The higher the gross margin, the more capital a company retains on each dollar of sales, which it can then use to pay other costs or satisfy debt obligations. The net sales figure is simply gross revenue, less the returns, allowances, and discounts.

  • Gross National Product (GNP)
    Total value of good and services produced in an economy during a specific period. It is akin to the income statement of a country, capturing all sales (including exports, but excluding imports) of locally produced goods.

  • Gross Profit
    Also called gross income, gross profit is calculated by subtracting the cost of goods sold from revenue.

  • Gross Profit Margin
    Gross profit margin is an analytical metric expressed as a company's net sales minus the cost of goods sold (COGS).

  • Gross Receipts
    Gross receipts are sales of a business that form the basis for corporate taxation in a handful of individual states and certain local tax authorities. The components of gross receipts vary by state and municipality.

  • Gross Sales
    Gross sales is a metric for the total sales of a company, unadjusted for the costs related to generating those sales.

  • Gross Spread
    The gross spread is the compensation that the underwriters of an initial public offering (IPO).

  • Gross-Up
    A gross-up is an additional amount of money added to a payment to cover the income taxes the recipient will owe on the payment.

  • Gross Value Added
    Gross value added is the output of the country less the intermediate consumption, which is the difference between gross output and net output.

  • Gross Working Capital
    Gross working capital is the total value of a company's current assets.

  • Group of thirty (G30)
    The Group of 30, generally abbreviated to G-30, is a private, nonprofit international body composed of academic economists, company chiefs, and representatives of national, regional, and central banks. G-30 members meet twice a year to generate a greater understanding of financial and economic issues in the private and public sectors worldwide.

  • Guarantor
    A guarantor guarantees to pay a borrower's debt in the event that the borrower defaults on a loan obligation.

  • Guarenteed bonds
    A guaranteed bond is a debt security that offers a secondary guarantee that interest and principal payments will be made by a third party, should the issuer default due to reasons such as insolvency or bankruptcy. A guaranteed bond can be of either the municipal or corporate variety. It can be backed by a bond insurance company, a fund or group entity, a government authority, or the corporate parents of subsidiaries or joint ventures that are issuing bonds.

  • Guarenteed Stock
    Guaranteed stock is a rarely used form of preferred stock, where a party other than the original company guarantees dividends will be paid.

  • Gun Jumping
    Gun-jumping, in financial markets, is acting on information that is not available to all potential investors.

  • Gunnar Myrdal
    Gunnar Myrdal was a Swedish economist, politician, and social advocate who was awarded the Nobel Prize in 1974.

  • Guns-and-Butter Curve
    The guns-and-butter curve postulates that you can only gain something if something else is given in return.

  • Gunslinger
    Gunslingers are portfolio managers or traders who tend to take high-risk or aggressive positions in the market.

  • Guppy Multiple Moving Average (GMMA)
    The Guppy Multiple Moving Average (GMMA) is a technical indicator that identifies changing trends, breakouts, and trading opportunities in the price of an asset by combining two groups of moving averages (MA) with different time periods.

  • Gwei
    Gwei is a denomination of the cryptocurrency ether (ETH), which is used on the Ethereum network to buy and sell goods and services.

  • h
  • Halving
    An event in which the total rewarded bitcoin per confirmed block halves, happening every 210,000 blocks mined.

  • Hammer Candlestick
    A hammer is a price pattern in candlestick charting that occurs when a security trades significantly lower than its opening, but rallies within the period to close near opening price.

  • Hammering
    Hammering is a fast-paced sell-off in a stock, a sector, or the markets as a whole.

  • Handle
    A handle is the whole number part of a price quote, that is, the portion of the quote to the left of the decimal point.

  • Hard Fork (of a Blockchain)
    A type of protocol change that validates all previously invalid transactions, and invalidates all previously valid transactions. This type of fork requires all nodes and users to upgrade to the latest version of the forked protocol software. In a hard fork, a single cryptocurrency permanently splits into two, resulting in one blockchain that follows the old protocol and the other that follows the newest protocol. Some examples are Bitcoin and Bitcoin Cash, or Ethereum and Ethereum Classic. *see Soft Fork.

  • Hardware wallet
    An alternative to your normal cryptocurrency wallet, this is a dedicated physical device in which private keys are stored (usually offline for extra security).

  • Hash
    (Noun) A cryptographic algorithm. (Verb) The act of performing the cryptographic algorithm on some data.

  • Hash rate
    The hash rate measures how powerful a (Bitcoin) miner's machine is. Specifically, it measures the number of times a hash function can be computed per second. A miner's expected profit is directly proportional to the hash rate. Hash rate is also used to measure how much computer power is securing a specific blockchain.

  • Hawks
    Hawks are policymakers and advisors who favour higher interest rates to keep inflation in check.

  • Headline Earnings
    Headline earnings report a company's income from operations, trading, and investments only.

  • Heatmap
    A heatmap is a graphical representation of data in two-dimension, using colors to demonstrate different factors.

  • Heavy Industry
    The first stage in the process of terminating the issuing of securities in paper form.

  • Hedge funds
    Hedge funds are alternative investments using pooled funds that employ different strategies to earn active returns, or alpha, for their investors. Hedge funds may be aggressively managed or make use of derivatives and leverage in both domestic and international markets with the goal of generating high returns (either in an absolute sense or over a specified market benchmark).

  • Hedging
    Taking action to protect against the risk of an adverse outcome.

  • Heikin Ashi
    The Heikin-Ashi technique averages price data to create a Japanese candlestick chart that filters out market noise

  • Helicopter money
    refers to a last resort type of monetary stimulus strategy to spur inflation and economic output. Though it would appear to be theoretically feasible, from a practical standpoint, it is considered to be a hypothetical, unconventional monetary policy tool whose implementation is highly improbable.

  • High frequency trading (HFT)
    High-frequency trading, also known as HFT, is a method of trading that uses powerful computer programs to transact a large number of orders in fractions of a second. It uses complex algorithms to analyze multiple markets and execute orders based on market conditions. Typically, the traders with the fastest execution speeds are more profitable than traders with slower execution speeds.

  • Historical volatility
    The annualised standard deviation of the percentage change in the price of an asset over a previous period.

  • Holder
    The party that purchases a contract.

  • Hot Storage
    The online storage of private keys allowing for quicker access to cryptocurrencies. *see Cold Storage.

  • Hot Wallet
    A cryptocurrency wallet that is connected to the internet for hot storage of cryptoassets, as opposed to an offline, cold wallet with cold storage. *See Cold Wallet.

  • Household sector
    An economic term for that division of the economy which consists primarily of individuals and small groups of individuals who consume goods and services.

  • Hybrid
    An instrument combining the features of more than one other instrument.

  • Hybrid scheme
    A scheme that offers both defined benefit and defined contribution sections or benefits that are the better of a defined benefit and a benefit on a defined contribution basis.

  • i
  • Implied volatility
    An estimate of future volatility that was traditionally implied from market option prices, and is nowadays often traded as an explicit market price.

  • In-the-money
    When the strike price of an option is more favourable to the holder than the prevailing price of the underlying asset to which it relates.

  • Income
    In accounting terms, this term refers to all revenues received by a company, as a result of its sales as well as from other sources such as interest, dividends or rent.

  • Income bonds
    Only earn interest when the issuing company has sufficient earnings to pay it.

  • Index
    A statistically derived single number which represents the value of the securities which constitute it.

  • Index future
    A future contract to buy or sell an index, e.g. the ALSI 40 index which is based on the value of the 40 largest shares in South Africa by market capitalisation.

  • Indirect financing
    Financing which is facilitated by a financial intermediary.

  • Indirect quotation
    An exchange rate quoted as the foreign price of domestic currency.

  • Indirect securities
    Securities issued by financial intermediaries.

  • Inflation
    A condition characterised by a continuous rise in the general level prices in an economy.

  • Inflation-linked bonds
    Bonds that offer investors a return linked to an inflation index.

  • Inflation rate
    A rate of change of the general price level, usually measured as a percentage change per year.

  • Inflation targeting
    The decision by the authorities to set a measurable target for the country's inflation rate and to focus macroeconomic policies, especially monetary policy, on the achievement of this objective.

  • Inintial Public Offering (IPO)
    An initial public offering (IPO) refers to the process of offering shares of a private corporation to the public in a new stock issuance.

  • Initial coin offering (ICO) / token sale
    Initial coin offering (or ICO) is the sale of tokens on a blockchain before they are issued. The public can pay for these tokens in an ICO and they are issued to participants later.

  • Initial Public Offering (IPO)
    The first offering of stock to the public by a corporation.

  • Initial Token Offering (ITO)
    Similar to ICOs, but the focus is on the offering of tokens with proven (or unproven) intrinsic utility in the form of software or usage in an ecosystem.

  • Insider trading
    Dealing in securities or financial instruments by a person knowingly in possession of information which is price sensitive and has not been made public.

  • Instrinsic value
    The amount by which an option is in-the-money.

  • Interbank Deposits
    Insider trading is the buying or selling of a publicly traded company's stock by someone who has non-public, material information about that stock.

  • Interbank market
    The market in which the banks trade between themselves.

  • Interest add-on security
    A financial instrument bought (or issued) at nominal value and to which the interest is added on the maturity date.

  • Interest-bearing market
    The money and bonds market.

  • Interest rate
    The cost of borrowing or the price paid for the rental of funds (expressed as a percentage per year).

  • Interest rate swap
    A cash-settled derivative that facilitates the swapping of interest obligations between two parties.

  • Intermediary
    An organisation that interposes itself as a principal in financial transactions.

  • Intermediate target
    A variable (such as the money supply) that is not directly under the control of the central bank, but that does respond fairly quickly to policy actions, is observable frequently, and bears a predictable relationship to the ultimate goals of policy.

  • Internal value of a currency
    The domestic purchasing power of a currency.

  • International Capital Market Association (ICMA)
    A self-regulatory organisation and trade association based in Europe, representing financial institutions active in the international capital market.

  • International Monetary Fund (IMF)
    An international organisation with 146 members. The main functions of the IMF are to lend funds to member nations to finance temporary balance of payments problems, to facilitate the expansion and balanced growth of international trade, and to promote international monetary cooperation among countries.

  • International reserves
    Central bank holdings of assets denominated in foreign currencies.

  • International Swaps and Derivatives Association (ISDA)
    An organisation that produces standard documentation for swaps and other derivatives.

  • Investment banks
    Firms that are involved in arranging for the sale of corporate or municipal securities and providing secondary trading markets for such securities. Investment banks undertake specialised tasks such as facilitating mergers and acquisitions, as well as promoting and marketing the shares of companies either through prive placement or a public offering.

  • Investment managers
    Financial institutions that are approved under the Financial Advisory and Intermediary Services Act (No. 37 of 2002) to carry on the business of managing funds (called fund management, portfolio management, investment management, asset management) on behalf of others.

  • Investment trusts
    Investment trusts receive investors' money in exchange for ordinary shares issued by the investment trust itself. Investors' money is pooled and invested on behalf of the investors in the shares of other companies.

  • Islamic finance
    The provision of financial services and products that are compliant with Shari'ah, the Islamic legal code.

  • Iteration
    The act of repeating an action to reach a desired result, e.g. finding the yield to maturity for a bond, using market prices, coupon payments and maturities as inputs.

  • j
  • Jobber
    Member of a securities exchange (such as the JSE Ltd) who buys and sells shares for his or her own account.

  • Johannesburg Interbank Average Rate (JIBAR)
    A number of daily calculated benchmark interest rates composed of an average of the negotiable certificate of deposit (NCD) mid-rates of a number of the leading South AFrican banks. The 3-month rate provides the settlement index for most South African interest rate derivatives.

  • JSE Ltd (JSE)
    The exchange for listed shares and certain derivative instruments in South Africa.

  • Junior securities
    Junior securities have a lower priority of claim on assets or income compared to senior securities.

  • k
  • Knock in option
    A knock-in option is a type of barrier option which is triggered only after the underlying asset's price reaches a certain specified barrier.

  • Knock out option
    Knock-out options are a type of barrier option, which expire worthless if the underlying asset's price exceeds or falls below a specified price.

  • Krugerrands
    Krugerrands are South African gold coins that were minted in 1967.

  • l
  • Land Bank Bill (LLB)
    A short-term discount secuirty issued by the Land and Agricuktural Bank of South Africa. Used mainly for the purpose of extending credit to agricultural cooperatives, who in turn use it to buy agricultural products from farmers and farming equipment from manufacturers.

  • Large Cap: JSE
    Market cap above R 10 Billion.

  • Ledger
    A record of transactions. There is also a hardware wallet company that produces a wallet called Ledger.

  • Lender of last resort
    The role of a country's central bank in extending credit to depository institutions or to other entities in unusual circumstances involving a national or regional emergency, where failure to obtain credit would have a severe adverse impact on the economy.

  • Lender's swap
    An interest rate swap whereby an investor of money pays a floating rate interest and receives a fixed rate.

  • Letter of credit
    A letter of undertaking from a bank whereby the bank promises to pay for goods purchased by a client upon delivery or shipment.

  • Leverage
    Gaining an economic exposure which is larger than available capital resources.

  • Liabilities
    Debts of an individual or a firm. This includes deposits taken by depository institutions.

  • Lightning Network
    The Lightning Network is a "second layer" payment protocol that operates on top of a blockchain. Theoretically, it will enable fast, scalable transactions between and across participating nodes, and has been touted as a solution to the Bitcoin scalability problem.

  • limit down
    The limit down price is the maximum allowable decline in the price of a stock or commodity in a single trading day. The limits were introduced to forestall unusual market volatility and counteract the panic selling that tends to compound an initial price decline.

  • Limit order
    An order placed by specifying both the amount and price at which you wish to trade. Depending on the price specified, the limit order might trade immediately against existing orders in the order book (in that case it is a taker order), or it might itself be inserted into the orderbook waiting for other orders to trade against it (in that case it is a maker order).

  • Limit up
    Limit up are the maximum amounts a commodity future may increase in any single trading day.

  • Linear
    Where movement in the price of a financial instrument is directly proportional to movements in its risk factors.

  • Liquid asset
    A public sector financial security (Reserve Bank debentures, Treasury bills, government bonds and Land Bank bills) in which, according to the Banks Act, a bank has to invest a certain percentage of its deposits. This is done for prudential purposes, i.e. to protect part of the depositors' money.

  • Liquidity
    The extent to which an instrument can be readily acquired or disposed of at prevailing market prices.

  • Liquidity premium
    The extra return demanded by investors to invest in longer term or less liquid assets.

  • Liquidity shortage
    The total amount of cash reserves that the banking system as a whole has to borrow from the central bank on a daily basis in order to prevent a cash reserve deficit position in their books.

  • Liquidity trap
    A liquidity trap is when monetary policy becomes ineffective due to very low interest rates combined with consumers who prefer to save rather than invest in higher-yielding bonds or other investments.

  • Listing requirements
    Rules imposed by a stock exchange on lsited companies.

  • Lock In Profits
    Locking in profits refers to the realization of previously unrealized gains accrued in a security by closing all or a portion of the holdings.

  • London Interbank Offered Rate (LIBOR)
    The rate of interest charged by the major London banks to lend money to each other and to top-rated clients in a number of currencies.

  • London Metals Exchange (LME)
    A UK derivatives exchange.

  • Long position
    A dealer that has purchased a security is said to be "long" that security.

  • Long-term insurers (life insurers)
    A financial intermediary that primarily ensures against death but also sells investment-oriented policies.

  • Look-alike
    An OTC derivative contract based in the precise specification of an exchange-listed derivative contract.

  • Loss Ratio
    Loss ratio is the losses an insurer incurs due to paid claims as a percentage of premiums earned.

  • Lot
    A lot in the financial markets is the number of units of a financial instrument bought on an exchange. The number of units is determined by the lot size.

  • Low Volume Pullback
    Low volume pullbacks occur when the price moves towards support levels on lower than average volume.

  • Luiquidity risk
    The risk that a depository institution will not have sufficient cash or liquid assets to meet borrower depositor demand.

  • m
  • M2 Money supply
    M2 is a measure of the money supply that includes cash, checking deposits, and easily convertible near money.

  • Macroeconomic policy
    Economic decisions which are concerned with the performance of the economy as a whole.

  • Maintenance margin
    Maintenance margin is the minimum equity an investor must hold in the margin account after the purchase has been made.

  • Managed floating exchange rate
    An exchange rate system in which the authorities intervene in the markets to influence the extent, but not the direction, of changes in the exchange rate.

  • Manufactured payment
    The coupon or dividend paid to the holder of a bond or a share repurchase or scrip lending agreements.

  • Margin
    The payment of cash or other acceptable collateral to a derivatives exchange based on the risk of loss of the particular position. There are two types of margin payments: initial margin is the sum placed with the exchange as a "good faith" deposit when a trade is first entered into; and variation margin is the amount of money that changes hands between the exchange and the derivatives counterparty to settle the daily change in the market value of the contract.

  • Margin call
    A margin call occurs when the value of an investor's margin account falls below the broker's required amount.

  • Margin deposit
    Deposit margin is the amount a trader needs to put up in order to open a leveraged trading position.

  • Marginal lending facility
    A facility available to banks to bridge temporary liquidity shortfalls not catered for under the repo tenders. It is available on an overnight basis or for a few days at a higher penalty rate (marginal lending rate).

  • Market capitalisation
    The current share price of a company multiplied by the number of shares in issue of that company.

  • Market data
    market data is price and trade-related data for a financial instrument reported by a trading venue such as a stock exchange

  • Market interest rates
    Rates of interest paid on deposits and other investments, determined by the interaction of the supply of and demand for funds in the money market.

  • Market maker
    A participant in a financial market that is willing to quote buying and selling prices to other participants.

  • Market order
    An order placed by only specifying the amount you wish to trade. The order executes immediately at the best available rate in the market. In other words, the market order matches with existing orders waiting in the orderbook. A market order is always a taker order.

  • Maturity date
    The date when a financial contract will expire.

  • Mean
    The average of a number of values.

  • Medium Cap: JSE
    Market cap of between R 1 Billion and R 10 Billion.

  • Medium-term note programme
    A debt instrument that is offered to investors on a continuous basis, without having to list each bond separately.

  • Member
    A person who has been admitted to membership of a pension scheme and is entitled to benefit under the scheme.

  • Microcredit
    The granting of credit, often without collateral, to low-income individuals or entrepreneurs or through group lending. Microcredit can also refer to a microloan.

  • Microfinance Institutions (MFIs)
    Organisations that provide savings, loans, money transfer services, insurance and other financial services to poor and low-income clients.

  • Microinsurance
    The provision of insurance to low-income households. It can take the form of health, life, funeral, disability, agriculture (crop) or property insurance.

  • Microlender
    A close corporation, company, cooperative, trust, mutual bank or bank which, as part of its business, advances microloans.

  • Microloans
    Microloans are small loans that are issued by individuals rather than banks or credit unions. These loans can be issued by a single individual or aggregated across a number of individuals who each contribute a portion of the total amount.

  • Microsavings
    Deposit services that allow low-income individuals to accumulate small amounts of money for future use.

  • Miner fee
    Miners earn block rewards when solving blocks. Over and above this miners also earn voluntary fees paid by people who wish to send coins. This incentivises miners to include transactions with the highest fees into blocks when the network is congested.

  • Mining
    The committing of computer hardware to process transactions on a blockchain (Bitcoin or otherwise). Miners do this to receive mining rewards and profit.

  • Model risk
    The risk of an error in a mathematical model or in the assumptions that underpin it.

  • Monetary base
    The sum of the South African Reserve Bank's monetary liabilities (currency in circulation and banks' cash reserves).

  • Monetary policy
    A central bank's actions to influence the availability and cost of money and credit. Tools of monetary policy include open market operations, accommodation policy, reserve requirements and the monetary policy interest rate.

  • Monetary Policy Committeee (MPC)
    A committee of the South African Reserve Bank that makes policy decisions on the monetary policy stance by determing the repo interest rate.

  • Monetary policy transmission mechanism
    The process through which the central bank's monetary policy actions affect tthe macroeconomy, especially the general price level.

  • Money laundering
    A term that covers a wide range of activities and processes intended to obscure the source of illegally obtained money and to create the appearance that it has originated from a legitimate source.

  • Money market
    The market for the issue and trading of short-term debt securities.

  • Money supply
    The total quantity of money available for transactions and investment; measure of the stock includes M1, M2 and M3.

  • Monte Carlo simulation
    A technique for calculating the value of a financial instrument by randomly sampling multiple possible future price paths.

  • Mortgage bond
    A mortgage bond represents a claim against specific assets owned by the issuing party. It is said that the asset is pledged to this debt. If a mortgage bond is closed-ended, no additional debt may be secured against the asset that secures this bond. If it is open-ended additional debt may be secured against the pledged asset.

  • Moving average
    a moving average (MA) is a stock indicator that is commonly used in technical analysis.

  • Multi-signature / multisig
    In wallets, multiple signature (or MultiSig) refers to the requirement of multiple authorisations (usually from different people) to successfully send a transaction on a blockchain. For example, you have 5 people authorised to send Bitcoin from a MultiSig wallet but at least 3 of these 5 must approve a transaction before it is authorised.

  • Multilateral trading Facility
    A multilateral trading facility (MTF) is a European term for a trading system that facilitates the exchange of financial instruments between multiple parties.

  • Multiplier effect
    The multiplier effect refers to the proportional amount of increase, or decrease, in final income that results from an injection, or withdrawal, of spending.

  • Municipal bond
    A bond issued by local government.

  • Mutual bank
    Bank that accepts deposits from the general public, provides payment services such as cheques and electronic transfers, and makes available credit such as overdrafts, home, term or asset-backed loans. It differs from other banks in that it is not required by law to be a public company and the minimum capital requirement is much less than for a bank.

  • n
  • National Credit Regulator (NCR)
    Established as the regulator under the National credit Act (No. 34 of 2005) and is responsible for the regulation of the South African credit industry.

  • National Finance Corporation (NFC)
    An institution established by the Reserve Bank and the private banks in 1949 to foster the development of a local money market. Dissolved in 1984.

  • National Payment System (NPS)
    A national infrastructure that provides for the management, administration, operation, regulation and supervision of payment, clearing and settlement systems in South Africa.

  • National Treasury
    A term used for the Department of Finance and State Expenditure.

  • Negotiable Certificate of Deposit (NCD)
    A tradable fixed deposit issued by a bank with the purpose of raising funds.

  • Net Asset Value (NAV)
    Net asset value, or NAV, is equal to a fund's or company's total assets less its liabilities.

  • Net forward position (in foreign exchange)
    Also called the oversold forward book, the extent to which the monetary authority's forward sales of foreign currency exceed its forward purchases.

  • Net Income
    Net income (NI), also called net earnings, is calculated as sales minus cost of goods sold, selling, general and administrative expenses, operating expenses, depreciation, interest, taxes, and other expenses.

  • Net Open Foreign Currency Position (NOFP)
    The extent to which the oversold forwad book exceeds the net foreign reserve assets of the monetary authority.

  • New York Mercantile Exchange (NYMEX)
    New York Mercantile Exchange, a US derivatives exchange.

  • Node
    A device with a copy of the blockchain on it that shares information with other nodes across the network. The node does not necessarily mine cryptocurrency but it does contribute to decentralisation and therefore security of the blockchain. All miners are nodes but not all nodes are miners.

  • Nominal Annual Compounded Monthly (NACM)
    The quotation of an interest rate as a nominal annual rate with monthly compounding.

  • Nominal Annual Compounded Quarterly (NACQ)
    The quotation of an interest rate as a nominal annual rate with quarterly compounding.

  • Nominal Annual Compounded Semi-Annually (NACSA)
    The quotation of an interest rate as a nominal rate with sem-annual compounding.

  • Nominal annual return
    The annualised return or yield earned by investing in a security without taking into account the interest that is earned on interim interest payments.

  • Nominal value
    The face value of a financial instrument. This can either be a present value or a future value.

  • Non-arbitrageable price
    The value of a security which does not present an immediate opportunity for risk-free profits.

  • Non-cumulative prefence shares
    Holders of non-cumulative preference shares forego their dividends if a payment is missed.

  • Non-custodial (wallet)
    Usually referring to the storage of keys, in relation to wallets or exchanges, a non-custodial setup is one in which private keys are held by the user directly. *see Custodial.

  • Non-farm payrolls
    Nonfarm payrolls is the measure of the number of workers in the U.S. excluding farm workers and workers in a handful of other job classifications.

  • Non-financial corporate sector
    The non-financial corporations sector is an institutional sector in national accounts. Institutional sectors within national accounts bring together economic units with broadly similar characteristics and behaviour.

  • Non-linear
    Where the movement in the price of a financial instrument is not directly proportional to movements in its risk factors.

  • Non-voting ordinary shares (N-shares)
    Shares with diluted voting rights. The "non-voting" is thus misleading.

  • Normal distribution
    A theoretical frequency distribution represented by a bell-shaped curve.

  • Notional value
    The face value used to calculate the coupon payments on a bond.

  • Novation
    The replacement of one obligation for another by mutual agreement of the parties. The process whereby the clearinghouse of a derivatives exchange interposes itself as the counterparty of both the buyer and seller.

  • o
  • Off-balance sheet
    An instrument or contract that does not appear as a conventional asset or liability on a company's balance sheet.

  • Off-take agreement
    A privately-negotiated contract between a producer and consumer to trade a quantity of goods at a certain price.

  • Offer
    The market price at which a security may be purchased from a market maker.

  • Old crop/New crop
    The designation of the harvest to which an agricultural derivatives contract relates.

  • On exchange
    A term used to mean that a trade is taking place directly on an order book.

  • Open
    Open has several definitions within investing. It can refer to the daily opening of an exchange, and an order or position that has not yet been filled or closed.

  • Open market operations
    Purchases and sales of securities (government securities, Reserve Bank debentures amd currency) by the central bank to increase or decrease the quantity of money in circulation and cash reserves of commercial banks.

  • Open position
    A market transaction that is subject to market price movements and which has not been closed out by an equal opposite trade.

  • Operating Cash Flow Margin
    Operating cash flow margin is a cash flow ratio which measures cash from operating activities as a percentage of sales revenue in a given period.

  • Operating Cash Flow Ratio
    The operating cash flow ratio is a measure of how well current liabilities are covered by cash flows from operations.

  • Operating Cost
    Operating costs are the ongoing expenses incurred from the normal day-to-day of running a business that include both overhead and costs of goods sold (COGS).

  • Operating Earnings
    Operating earnings is a measure of the amount of profit realized from a business's core operations.

  • Operating Expense
    Operating expenses are incurred in the regular operations of business and include rent, equipment, inventory costs, marketing, payroll, insurance, and funds allocated for research and development.

  • Operating Expense Ratio
    In real estate, the operating expense ratio (OER) is a measurement of the cost to operate a piece of property, compared to the income brought in by the property.

  • Operating Income
    Operating income reports the amount of profit realized from a business's ongoing operations.

  • Operating target
    Any of a set of variables, such as money supply aggregates or interest rates, that the South African Reserve Bank influences and that are responsive to its policy tools.

  • Operational risk
    The risk of losses or reputational risk arising from a failure of people, systems or processes.

  • Option
    A contract which gives the holder the right, but not obligation, to buy or sell underlying instrument at an agreed price.

  • Option spread
    Options spreads are the basic building blocks of many options trading strategies

  • Orange Book
    The Orange Book is a freely accessible list maintained by the FDA describing all pharmaceutical drugs that have been proven both safe and effective.

  • Order
    An instruction to trade (buy or sell) via an exchange (e.g. the stock market). Aka. An order is a request sent to a broker or trading platform to make a trade on a financial instrument.

  • Order Book
    An order book is an electronic list of buy and sell orders for a security or other instrument organized by price level.

  • Order Driven Market
    In an order-driven market, trades are based on buyers' and sellers' requirements, with their desired bid and ask prices and the number of shares they want to trade put on display.

  • Ordinary shares
    The most prevalent form of equity, which cpnfers the right to holders to vote on company matters and entitles shareholders to share in company profits after payment of interest on debt and dividends on preference shares.

  • Out-of-the-money
    Where the strike price of an option contract is less favourable to the holder than the prevailing price of the underlying instrument to which it relates.

  • Over-Hedging
    Over-hedging is a risk management strategy where an offsetting position that exceeds the original position is initiated.

  • Over-Limit Fee
    An over-limit fee is a penalty charged to credit card customers who breach their credit limits.

  • Over-Line
    Over-line insurance coverage exceeds the amount typically offered by an insurer or reinsurer.

  • Over-Selling
    Over-selling is continuing with a sales attempt after the customer is already willing to purchase, or attempting to sell a customer more than they need or want.

  • Over-the-Counter Bulletin Board (OTCBB)
    The over-the-counter bulletin board (OTCBB) is an electronic quotation service provided by the Financial Industry Regulatory Authority (FINRA) to its subscribing members.

  • Over-the-Counter Market
    Over-the-counter markets are those in which participants trade directly between two parties, without the use of a central exchange or other third party.

  • Over-the-Counter (OTC)
    Over-the-counter (OTC) refers to the process of how securities are traded for companies not listed on a formal exchange.

  • Over the counter (OTC) shares
    A market that deals in securities that are not listed on a formal exchange.

  • Over the top (OTT)
    Over the top (OTT) refers to film and television content provided via a high-speed Internet connection rather than a cable or satellite provider.

  • Overall Turnover
    Overall turnover is equivalent to a firm's total revenues over some period of time.

  • Overallotment
    An overallotment is an option commonly available to underwriters that allows the sale of additional shares that a company plans to issue in an initial public offering or secondary/follow-on offering.

  • Overbought
    Overbought refers to a security with a price that's higher than its intrinsic value.

  • Overcapitalization
    Overcapitalization occurs when a company has more debt than its assets are worth.

  • Overcast
    An overcast occurs when a forecast or estimate is made too high.

  • Overdraft cheque account
    A cheque account associated with a line of credit that allows a person to write cheques for more that the actual balance in the account, with the finance charge on the overdraft.

  • Overnight call rate
    A collective term used for the interest rate (in per cent per annum) that a bank (with surplus cash) would charge another bank (with cash deficit) for the lending of funds on an overnight basis.

  • Overnight Rate
    The overnight rate is the interest rate at which a depository institution (generally banks) lends or borrows funds with another depository institution in the overnight market. In many countries, the overnight rate is the interest rate the central bank sets to target monetary policy.

  • Overnight Trading
    Overnight trading is the trading that takes place outside of normal trading hours provided by the primary exchange the asset is listed on.

  • Overreaction
    An overreaction in financial markets is when prices become excessively overbought or oversold due to psychological reasons rather than fundamentals.

  • Overshooting
    The overshooting model establishes a relationship between sticky prices and volatile exchange rates.

  • Oversold
    Oversold is a subjective term. Since traders and analysts all use different tools, some may see an oversold asset while others see an asset that has further to fall.

  • Oversubscribed
    Oversubscribed refers to an issue of securities where demand exceeds the available supply.

  • Oversupply
    Oversupply is a situation where there is more product on the market than consumers want to buy.

  • Overtrading
    Overtrading is a prohibited practice for brokers who advise investors and is regulated by the SEC.

  • Overvalued
    An overvalued stock has a current price that is not justified by its earnings outlook, typically assessed by its P/E ratio.

  • Overweight
    Overweight is an outsized investment in a particular asset, asset type, or sector within a portfolio.

  • Overwriting
    Overwriting is when a trader sells (writes) options contracts that are perceived to be overvalued.

  • p
  • P/E ratio
    The price-to-earnings ratio (P/E ratio) is the ratio for valuing a company that measures its current share price relative to its per-share earnings (EPS).

  • Paper Wallet
    A physical document containing your private key or seed phrase.

  • Par value
    Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments.

  • Parastatal
    A semi-public institution such as Eskom or Transnet.

  • Parity
    The term parity can be used in a few ways when trading, but always as an expression of equality.

  • Participating preference shares
    Holders receive a predetermined dividend and, over and above that, they also share in the remaining profits, according to a predetermined formula.

  • Pay-as-you-go
    An arrangement under which benefits are paid out of revenue and no funding is made for future liabilities.

  • Payment systems
    Collective term for mechanisms (both paper-backed and electronic) for transferring funds, payments and money among financial institutions throughout the country.

  • Phishing
    When a scammer pretends to be a trusted institution or person to trick people into revealing sensitive information such as Social Security numbers, passwords, banking details, etc., often through a malware link disguised as legitimate.

  • Physical settlement
    When the underlying asset, whether a financial instrument or commodity, is actually delivered to the purchaser at maturity.

  • Pips
    The last two decimal places of a foreign exchange rate.

  • PMI
    (PMI) is an index of the prevailing direction of economic trends in the manufacturing and service sectors

  • Portfolio
    A collection of investment securities, often assembled in a manager designed to provide diversification and hence risk reduction benefits.

  • Portfolio management
    Portfolio management is the art and science of selecting and overseeing a group of investments that meet the long-term financial objectives and risk tolerance of a client, a company, or an institution.

  • Position limits
    A maximum value allowed in open positions imposed by senior management for controlling th bank's risk exposure, as well as restrictive, values imposed by the authorities.

  • Power of Attorney
    (POA) is a legal document giving one person (the agent or attorney-in-fact) the power to act for another person (the principal)

  • Preference shares
    Rank higher than the ordinary shares and have a higher priority when it comes to the distribution of dividends, meaning that the dividends on preference shares have to be paid before dividens on common shares are paid.

  • Premium
    The price an option buyer pays to the seller for the right to choose whether or not to exercise the option.

  • Price-earnings ratio
    The reciprocal of the earnings yield and the indicator of the relationship between the price and earnings per share.

  • Price maker
    In economics, market power is the ability of a company to change the market price of goods or services.

  • Price taker
    A client to has to accept the price quoted by the price maker on a financial security.

  • Price volatility
    An indication of the sentivity of the price of asset to a change in the yield rate.

  • Primary dealer in government stock
    Reputable banking institutions appointed by Treasury to bid in the primary market for government stock.

  • Primary market
    The market where securities are fist issued.

  • Primary security
    A security which is issued by the principal and not by a financial intermediary.

  • Principal
    The face value, par value or nominal value of a security.

  • Private bankers
    Bankers who provide banking, investment and estate planning derives to high net worth individuals.

  • Private key
    A private key is a digital code, like a password, that is used to authorise cryptocurrency transactions on a blockchain. This code, which should be kept secret, authorises the owner to send coins from a specific wallet.

  • Private placement
    A procedure whereby securities are sold to a limited number of predetermined investors.

  • Private sector
    An economic term for that division of the economy which is not under the control of the state and comprises all profit-seeking entities.

  • Probability distribution
    A set of probability values associated with a random variable.

  • Promissory note
    A negotiable debt instrument. It is an unconditional promise in writing made by one person to another, engaging to pay on demand or at a fixed or determinable future time, a certain sum of money, to a specified person or his order.

  • Prospective member
    An individual, not currently a member of an occupational scheme of his or her employer, who is either entitled to join or will become eligible to join in the future by virtue of continuing in employment with the employer.

  • Prudential limits/requirments
    Regulations applying to certain classes of financial intermediaries designed to ensure that their businesses are compliant with legislation.

  • Public debt management
    Public debt management refers to the changes in the size, the composition by type of security, the maturity structure, and the ownership of the debt of the public sector which is outstanding, and more particularly, the outstanding debt of the government.

  • Public Investment Commissioners (PIC)
    An investment management company wholly owned by the South Afican government. PIC invests funds on behalf of the public sector entities. Funds managed by the PIC consist primarily of pension and provident funds, social security funds and the Guardian's Fund.

  • Public key
    A public key is a digital code that uniquely identifies a wallet on a blockchain; ie. the wallet address. This is the address you give to somebody who wants to send you cryptocurrency.

  • Public offering
    When newly issued securities are made available to the general public, often through an underwriter or market maker.

  • Pullback
    A pullback is a pause or moderate drop in a stock or commodities pricing chart from recent peaks that occur within a continuing uptrend.

  • Purchasing managers index
    The Purchasing Managers' Index (PMI) is an index of the prevailing direction of economic trends in the manufacturing and service sectors. It consists of a diffusion index that summarizes whether market conditions, as viewed by purchasing managers, are expanding, staying the same, or contracting. The purpose of the PMI is to provide information about current and future business conditions to company decision makers, analysts, and investors.

  • Put option
    An option which permits the holder the right but not the obligation to sell an underlying asset at an agreed price.

  • Putable bonds
    Bonds that give the holder the right to sell the bonds back to issuer on certain predetermined dates.

  • q
  • QR Code
    A machine-readable label that shows information encoded into a graphical black-and-white pattern. For cryptocurrencies, it is often used to easily share wallet addresses with others.

  • Quantitative easing
    Quantitative easing (or QE, for short) is an economic monetary policy intended to lower interest rates and increase money supply. It saw an increase in profile and use after the 2008 financial crash and subsequent recession.

  • Quote
    The quote is the price at which an asset was last traded, or the price at which it can currently be bought or sold.

  • Quote currency
    The quote currency is the second currency listed in a forex pair. It is also known as the counter currency.

  • r
  • Rally
    Is a period in which the price of an asset sees sustained upward momentum. Typically, a rally will occur after a period in which prices have been flat, trading in a narrow band, or experiencing a decline.

  • Rand hedge stock
    A term used for the shares of local companies that have foreign earnings and are therefore protected, to a certain extent, from the deprication in the value of the rand.

  • Rand overnight deposit rate (RODR)
    Weighted average of the overnight call deposit rates paid by "highly" rated local and foreign financial institutions where SAFEX places the daily margin deposits received by its members. Also called RODI.

  • Random walk theory
    Random walk theory suggests that changes in stock prices have the same distribution and are independent of each other. Therefore, it assumes the past movement or trend of a stock price or market cannot be used to predict its future movement. In short, random walk theory proclaims that stocks take a random and unpredictable path that makes all methods of predicting stock prices futile in the long run.

  • Ratio spread
    A ratio spread is a strategy used in options trading, in which a trader will hold an unequal number of buy and sell options positions on a single underlying asset at once

  • Real interest rates
    Interest rates adjusted for the expected erosion of purchasing power resulting from inflation. Technically defined as nominal interest rates minus the expected rate of inflation.

  • Real options
    Options which exist naturally in the assets of a business rather than being bought and sold by financial intermediaries, e.g. the option to abandon a prject.

  • Recession
    A significant decline in general economic activity extending over a period of time. Formally defined as negative economic growth for two or more consecutive quarters.

  • Redeemable bonds
    Bonds that can be redeemed by the issuer before the maturity date or at certain intervals or dates as stipulated i the bond contract.

  • Redeemable preference shares
    A type of share where the issuer has the option to redeem the shares at a predetermined price on a predetermined date or dates.

  • Redemption value
    The par value of a debt instrument at which it is normally redeemed on the maturity date.

  • Regulatory capital
    A capital requirement (also known as regulatory capital or capital adequacy) is the amount of capital a bank or other financial institution has to have as required by its financial regulator. This is usually expressed as a capital adequacy ratio of equity as a percentage of risk-weighted assets.

  • Reinsurance
    When an insurer transfers some of the risk to naother insurer. The former is called the ceding company while the latter is called the reinsurer.

  • Repo rate
    The administratively determined rate of the central bank at which the privatr sector banks acquire accommodation (borrowed reserves). This is undertaken in the form of repurchase agreements.

  • Reporting requirements
    The information that is regulated depository institution must, by law, submit to the South African Reserve Bank.

  • Repurchase agreement (repo)
    The sale of an existing security at an agreed price, with the simultaneous agreement by the seller to repurchase the same security on a specified future date.

  • Required reserves
    Funds that a depository institution is required to maintain on deposit with the Reserve Bank. The required reserve ratios set by the central bank and the volume of liabilities held by these institutions.

  • Reserve Bank debenture (RBD)
    A short-term money market security issued by the South African Reserve Bank specifically for banks as na outlet for investing their surplus short-term funds.

  • Reserves
    Reserves are the liquid assets set aside for future use by an individual, central bank or business. Usually they are in the form of currency or a commodity, such as gold. For traders, reserves will usually be kept as cash that can be accessed quickly.

  • Reset date
    The date of calculation of the settlemnet rate applicable to an FRA (forward rate agreement).

  • Resistance level
    A resistance level is the point on a price chart at which an upward price trajectory is impeded by an overwhelming inclination to sell the asset. If a market price is nearing a resistance level, a trader may opt to close their position and take the profit, rather than risk the price falling back.

  • Retail bank
    A bank that is primarily involved in the provision of banking services to individuals and small businesses.

  • Retail market
    A market which permits buying and selling by non-financial entities.

  • Retained earnings
    Retained income from after-tax profits.

  • Return
    The income earned by the owner of a security plus the change in the sucurity's value, expressed as a percentage of its purchase price.

  • Return on assets
    A profitability ratio calculated by dividing the net income of the company by the total asse value.

  • Reverse arbitrage
    The practice of genreating risk-free profits by selling an underlying asset and purchasing a derivatives contract on that asset.

  • Reverse repo
    The purchaseof an existing security at an agreedprice, with the simultaneous agreement by the buyer to sell the same or a similar security back to the owner on a specified future date.

  • Reward halving
    Approximately every four years, the rate at which new Bitcoin gets issued is halved. This is also why Bitcoin is thought of as deflationary.

  • Rho
    A measure of the change in thhe value of an option due to changes in the interest rates.

  • Rights issue
    A rights issue is when a company offers its existing shareholders the chance to buy additional shares for a reduced price. Usually the discounted price will stand for a specified time frame, after which it is returned to normal.

  • Risk management
    Risk management is the process of identifying potential risks in your investment portfolio, and taking steps to mitigate accordingly.

  • Risk-neutral pricing
    A method of calculating the prices of derivative contracts based on the assumption that the return on the underlying asset is equal to the risk-free rates.

  • ROCE
    Return on capital employed, or ROCE, is a long-term profitability ratio that measures how effectively a company uses its capital. The metric tells you the profit generated by each dollar (or other unit of currency) employed.

  • RODS
    A South African overnight index swap settled against the RODI.

  • Rollover
    A rollover is the process of keeping a position open beyond its expiry.

  • RSI
    RSI stands for the relative strength index. It is a key tool used in technical analysis, assessing the momentum of assets to gauge whether they are in overbought or oversold territory.

  • Running yield
    Annual income on a bond (i.e. coupon payment) expressed as a percentage of the purchase price of the bond.

  • s
  • SATRIX 40
    An exchange-traded fund based on the 40 largest shares in South Africa by market capitalisation.

  • Savings and credit cooperative
    A cooperative that pools the savings of its members and in turn provides them with credit facilities.

  • Scalp
    A scalp in trading is the act of opening and then closing a position very quickly, in the hope of profiting from small price movements.

  • Scrip
    An abbreviation for securities receipt. A term used by financial marketparticipants for securities of all kinds.

  • Scrip borrowing/lending
    The borrowing and lending of underlying shares and other instruments, usually for a fee. Also referred to as stock lending or securities lending.

  • Second-Layer Solutions
    A set of solutions built on top of a public blockchain to extend its scalability and efficiency, especially for micro-transactions or actions. Examples include: Plasma, TrueBit, Lightning Network and more.

  • Secondary market
    The market where the securities are traded after first being issued in the primary market.

  • Sectors
    A sector is an area of the economy in which businesses share the same or a related product or service.

  • Securities
    Ppaer certificates (definitive securities) or electronic records (book entry securities) evidencing ownership of equity (stocks), debt obligations (bonds) or related instruments.

  • Securities Industry and Financial Management Association (SIFMA)
    A US-based self-regulatory financial industry trade association.

  • Securitisation
    A process through which non-traded assets, such as bank loans and cash flows from such assets, become tradable. For example, securitisation of loans will involve the collection of loans and selling securities backed by those loans.

  • Seed
    A single starting point when deriving keys for a deterministic wallet. It is usually presented as a series of words to enable the owner to quickly backup or restore a wallet.

  • Segregated Witness (Segwit)
    SegWit is feature of some blockchain protocols (including Bitcoin and Litecoin), that moves a part of the transaction data out of the main block thereby reducing the effective size of transaction. It therefore allows more transactions to fit into into a single block without having to increase the size of the block.

  • Self-investment
    The investment of the assets of an occupational scheme in employer-related investments.

  • Self-liquidating
    Securities are self-liquidating when they are created for the purpose of financing the purchase, manufacture, etc. of goods and the securities are then secured by the proceeds arising from the sale of those goods.

  • Settlement
    The fulfillment of a financial contract either by physical delivery of the underlying goods or by a net cash payment.

  • Settlement risk
    The risk that a counterparty does not deliver its side of a financial contract on the settlement date.

  • SHA256
    The SHA (Secure Hash Algorithm) that Bitcoin uses. See hash.

  • Share trading
    Share trading refers to the buying and selling of shares in a particular company; if you own the stock, you own a piece of the company.

  • Share Transactions Totally Electronic (STRATE)
    The authorised central securities depository for the settlement of many financial instruments in South Africa.

  • Shares
    Shares represent equity ownership in a corporation or financial asset, owned by investors who exchange capital in return for these units.

  • Short position
    A dealer that has sold a security, which he or she does not own, has a short position in that security.

  • Short selling
    Short selling is the act of selling an asset that you do not currently own, in the hope that it will decrease in value and you can close the trade for a profit. It is also known as shorting

  • Short-term insurance
    Provides protection against specific pure risk and represents the sharing of risk by many to protect the individual policyholder against unexpected events (perils).

  • Sinking fund bonds
    Bonds with more than one maturity date. The entire prinncipal will not not be repaid on one date, but according to a set schedule.

  • Slippage
    When the price at which an order is executed does not match the price at which it was made, it is referred to as slippage.

  • Small Cap
    A small cap is generally a company with a market capitalization of between $300 million and $2 billion.

  • Small Cap: JSE
    A Company with a market cap is below R 1 Billion.

  • Smart contract
    A software program that is created on a blockchain and identified by an address. Transactions on the blockchain can execute the contract in various ways, for example, by sending some cryptocurrency or data to the contract's address. If executed, a smart contract can, in turn, send more transactions or execute other smart contracts.

  • Smart order router
    A smart order router (SOR) is an automated process used in online trading that follows a set of rules when looking for trading liquidity. The goal of an SOR is to find the best way of executing a trade.

  • SNB
    Swiss National Bank, the central bank for Switzerland.

  • Socially responsible investing
    Socially responsible investing (SRI), also known as social investment, is an investment that is considered socially responsible due to the nature of the business the company conducts. Common themes for socially responsible investments include socially conscious investing. Socially responsible investments can be made into individual companies with good social value, or through a socially conscious mutual fund or exchange-traded fund (ETF).

  • Society for worldwide Interbank Financial Telecommunications (SWIFT)
    An electronic message-writing system that connects worldwide participating banks primarily for the purpose of communicating confirmations and payment options.

  • South Africa Bank notes Company
    A subsidiary of the South Afican Reserve Bank that produces bank notes.

  • South Africa Benchmark overnight rate on deposits (SABOR)
    A volume weighted avergae interbank funding rate, calculated by the South African Reserve Bank on a daily basis.

  • South African Futures Exchange (SAFEX)
    A sophisticated computerised system oprated by the South African Reserve Bank which facilitates the transfer of funds (for payment purposes) between financial institutions.

  • South African Mint Company
    A subsidiary of the South African Reserve Bank that produces coins.

  • South African Reserve Bank Captive Insurance Company Limited (SARBCIC)
    A subsidiary of the South African Reserve Bank that provides insurance cover for the Bank.

  • South African Reserve Bank (SARB)
    The central bank of South Africa.

  • Special Drawing Rights (SDR)
    A type of international currency created by the International Monetary Fund (IMF) and allocated to its member nations for balance of payments purposes

  • Special purpose institution
    A company or a trust which is created solely for the purpose of implementing and operating a securitisation scheme.

  • Special Purpose Vehicles (SPV)
    A legal entity which serves a specific purpose for a limited time. The purposes that these entities are employed for vary and include risky projects, securitisation of assets and specialised financing.

  • Speculating
    The taking of a risk position in a market purely for profit.

  • Spot market
    The market where financial instruments and tangible commodities are traded for immediate settlements, and where there is an actual phsyical exchange of the underlying instrumrnt or commodity.

  • Spread
    This is the difference (or gap) between the price of the highest buy order (see bid) and the price of the lowest sell order (see ask). Lower spreads are a sign of a healthy or stable market.

  • Stablecoin
    A cryptocurrency with extremely low volatility, sometimes used as a means of portfolio diversification. Examples include gold-backed cryptocurrency or fiat-pegged cryptocurrency.

  • Stamp duty
    An official levy imposed on certain transactions.

  • Standard deviation
    A statistical term used to measure the volatility of a variable with reference to its dispersion around the mean value of the variable.

  • Standardisation
    The quotation of a limited number of exchange-listed derivatives contracts for a variety of underlying instruments and time periods.

  • Step-up bonds
    Bonds that promise a certain interest rate for the first few years, after which the interest rate is increase so that higher coupons are paid on it.

  • Stimulus check
    Stimulus checks are checks sent by the U.S. government to taxpayers to boost their spending power and spur economic activity.

  • Stock analysis
    Stock analysis is the evaluation of a particular trading instrument, an investment sector, or the market as a whole.

  • Stock equilibrium price
    The price at which existing stocks of assets are willingly held.

  • Stock exchange
    Stock analysis is the method used by a trader or investor to examine and evaluate the stock market. It is then used to make informed decisions about buying and selling shares. Stock analysis can also be referred to as market analysis, or equity analysis.

  • Stock index
    A stock index is a group of shares that are used to give an indication of a sector, exchange or economy. Usually, a stock index is made up of a set number of the top shares from a given exchange.

  • Stock symbol
    A stock symbol is a unique series of letters assigned to a security for trading purposes. Stocks listed on the New York Stock Exchange (NYSE) can have four or fewer letters. Nasdaq-listed securities can have up to five characters.

  • Stockbroker
    An agent for the buying and selling of listed securities.

  • Stokvel
    A group or association of individuals who make regular contributions to a pool of savings or a common fund, generally on a weekly, fortnightly or monthly basis. Each member can draw from the fund,usually for a specific purpose. In many stokvels, the pool is given in total or in part to each contributor on a strictly rotational basis.

  • Stop order
    Stop orders are types of order that instruct your broker to execute a trade when it reaches a particular level: one which is less favourable than the current market price. They can also be known as stop-loss orders.

  • Straddle
    A straddle in trading is a type of options strategy, which enables traders to speculate on whether a market is about to become volatile without having to predict a specific price movement. It involves either buying or selling simultaneous call and put options with matching strike prices and expiration dates.

  • Straight-Through Processing (STP)
    The avoidance of manual intervention in the settllement of financial transactions to achieve a number of efficiencies including the reducttion of costs and the number of errors.

  • Strike price
    In options trading, the strike is the price at which a contract can be exercised, and the price at which the underlying asset will be bought or sold. It is also known as the strike price

  • Strips
    An acronym standing for 'separate trading of registered interest and principal securities'. The process "stripping" involves separating a standard coupon bond into its constituent interest and principal payments, so that they can be spearately held or traded.

  • Structured note
    An instrument, usually a bond, which is customised tothe desired risk profile of an investor, often by embedding options and derivatives.

  • Subordinate debentures
    Sometimes also called junior securities. Holders of these securities only have a claim on the assets of a company that is liquidated once senior creditors, which include all pledged debt, normal debentures and some other classes of creditors, have been paid.

  • Support level
    A support level is the price at which an asset may find difficulty falling below as traders look to buy around that level.

  • Surplus
    The difference between the actuarial value of assets and the actuarial liability.

  • Swap
    An agreement to exchange underlying cash flows, often on a notional instrument.

  • Swap points
    The points difference between the forward and spot exchange rates of two currencies, expressed as a discount or premium to the spot rate.

  • Swaption
    An option contract thatt gives the holder the right but not the obligation to enter into a swap.

  • Synthetic instrument
    Combining financial instruments to create, or replicate, the economics of another instrument.

  • Synthetic securitisation
    A scheme whereby an institution uses a credit-derivative instrument to transfer the risk associated with a specified pool of assets to a special purpose insrtument (SPI).

  • System risk
    The risk of a failure of the whole financial system.

  • t
  • Tangible asset
    A tangible asset is an asset that has a finite monetary value and usually a physical form. Tangible assets can typically always be transacted for some monetary value though the liquidity of different markets will vary. Tangible assets are the opposite of intangible assets which have a theorized value rather than a transactional exchange value.

  • Tax and loan accounts
    Accounts used by government that are kept with the four main commercial banks.

  • Technical analysis
    A method of forecasting market prices based on the observation of previous price patterns and behavipur.

  • Tender
    An appication or offer to purchase an RSA Treasury bill, note or bond.

  • Term structure of interest rates
    The relationship among interest rates with different terms of maturity.

  • Testnet
    An alternative blockchain used by developers for testing.

  • Theta
    A measure of sentivitiy of an option price due to the passage of time.

  • Third market
    When listed bonds are traded off the organised exchange.

  • Time decay
    The accelerating loss of value of an option due to the passage of time.

  • Time value
    The portion of an option premium that relates to the value of the right of the holder to choose whether or not to exercise the option.

  • Token
    Generally, a token is a cryptocurrency that is not backed by its own blockchain, and instead is provided by functionality of another currency's blockchain. For example, ERC20 tokens provided by smart contracts on the Ethereum blockchain.

  • Tom-next
    Tomorrow next (tom next), is a short-term foreign exchange transaction where a currency is simultaneously bought and sold over two separate business days, those being tomorrow (one business day) and the following day (two business days from today), otherwise known as the spot date.

  • Total return swap
    A derivative contract that recreates the economic risk profile, but not legal ownership, of an underlying instrument or basket of instruments.

  • Trade balance
    The difference between merchandise exports and imports.

  • Trade date
    The date on which a financial contract is negotiated.

  • Trade deficit
    The amount by which merchandise imports exceed merchandise exports.

  • Trading Floor
    A trading floor is the area of a business or an exchange where assets are bought and sold, most commonly associated with stock exchanges and futures exchanges. It is also often referred to as a trading pit.

  • Trading Plan
    A trading plan is a strategy set by the individual trader in order to systemise evaluation of assets, risk management, types of trading, and objective setting. Most trading plans will comprise two parts: long-term trading objectives, and the route to achieving them.

  • Trailing stop
    A trailing stop is a type of stop-loss that automatically follows positive market movements of an asset you are trading. If your position moves favourably but then reverses, a trailing stop can lock in your profits and close the position.

  • Transaction confirmation
    Roughly every ten minutes (in Bitcoin, that is - other blockchains block times may vary), a new block is created and added to the blockchain through the mining process. This block verifies and records any new transactions. Since subsequent blocks are linked to previous blocks, each subsequent block acts as a confirmation of its predecessors. For example, if a transaction was included in block 101, and the latest block is 110, the transaction is said to have 10 confirmations. In this way, transactions are said to have been confirmed by the (Bitcoin) network.

  • Transaction cost
    Fees, commissions and other costs incurred when transacting in a financial instrument.

  • Transaction ID (or TxID)
    An identifier used to uniquely identify a particular transaction

  • Transmission mechanism of monetary
    The channels through which interest rates and the money supply affect economic activity.

  • Treasury Bill (TB)
    Short-term government security having a maturity of up to one year (between three and six months in South Africa). Treasury bills are sold at a discount; investors purchase a bill at a price lower than the face value; the return is the difference between the price paid and the amount received when the bill is sold or matures.

  • Trend
    When a market is making a clear, sustained move upwards or downwards, it is called a trend. Identifying the beginning and end of trends is a key part of market analysis. Trends can apply to individual assets, sectors, or even interest rates and bond yields.

  • Trust
    A legal entity whereby assets are held by one or more persons (the trustees) fo the benefit pof others (the beneficiaries) for the purposes of specified by the Trust Deed.

  • Tumbler
    Another name for a mixing service.

  • Two-way price
    A buying price and a selling price quoted simultaneously by a market maker, or via a broker.

  • u
  • Unborrowable stock
    Unborrowable stock is the stock that no one is willing to lend out to short sellers. When shares in a company become unborrowable, the traditional means of short selling them is impossible.

  • Uncle Sam
    Uncle Sam is the personification of the United States federal government, dating back to the 19th century.

  • Uncollected Funds
    Uncollected funds are the unavailable portion of a bank deposit that comes from checks that have yet to be cleared by the bank.

  • Unconditional Probability
    Unconditional probability reflects the chance that some event will occur without accounting for any other possible influences or prior outcomes.

  • Unconfirmed
    A state in which a transaction has not been appended to the blockchain.

  • Unconsolidated Subsidiaries
    An unconsolidated subsidiary is a company that is owned by a parent company, but whose individual financial statements are not included in the consolidated or combined financial statements of the parent company to which it belongs.

  • Unconstrained Investing
    Unconstrained investing is an investment style that does not require a fund or portfolio manager to adhere to a specific benchmark.

  • Unconventional Cash Flow
    An unconventional cash flow is a change in the direction of a company's cash flow over time from an inward cash flow to an outward cash flow or vice versa.

  • Unconventional Oil
    Unconventional oil is crude oil that is extracted using relatively new and/or complex methods.

  • Uncovered interest arbitrage
    Investing in a foreign money market to benefit from a relatively higher interest rate without covering the exchange rate risk in the forward exchange market.

  • Underlying instruments
    Instruments that are traded in underlying cash markets.

  • Underpricing
    Underpricing is the practice of listing an initial public offering (IPO) at a price below its real value in the stock market. When a new stock closes its first day of trading above the set IPO price, the stock is considered to have been underpriced.

  • Undersubscribed
    Undersubscribed (underbooked) refers to an issue of securities where demand does not meet the available supply.

  • Underwriting
    When a bank buys the issue of a new security and accepts the risk of sellingthe securities in the market.

  • Unemployment rate
    The percentage of the labour force that is unemployed and actively seeking a job.

  • Unilateral Contracts
    A unilateral contract is a contract agreement in which an offeror promises to pay after the occurrence of a specified act.

  • Unilateral Transfer
    Unilateral transfers involve sending funds, goods, or services to a receiving party, who does not return anything in kind.

  • Uninsurable Peril Unit Trust (UT)
    Uninsurable peril are events for which insurance coverage is not available or for which insurers are unlikely to underwrite policies. An uninsurable peril is typically an event that has a high risk of occurrence, meaning the probability of a payout is high and expected.

  • Unit trust companies
    Fund companies the receive investors' money, issue subshares (units) to investors, pool the money and invest it on behalf of unit holders in diversified portfolios consisting of various securities.

  • Unpermissioned Ledger
    A public blockchain.

  • Unsecured Note
    An unsecured note is a loan that is not secured by the issuer's assets. Unsecured notes are similar to debentures but offer a higher rate of return.

  • Unskiilled Labour
    Unskilled labor is a workforce with limited skills or minimal economic value for the work performed.

  • Unsolicited Application
    An unsolicited application is a life insurance request that is made directly from an individual, versus an agent or broker.

  • Unsolicited Bid
    An unsolicited bid is an offer made by an individual, investors, or a company to purchase a company that is not actively seeking a buyer.

  • Unspent Transaction Output
    An output of a blockchain transaction that has not been spent, and can be used as an input for new transactions.

  • Unsponsored ADR
    An unsponsored ADR is an American depositary receipt issued by a depositary bank without the involvement, participation, or consent of the foreign company.

  • Unstated Interest Paid
    Unstated interest paid is the amount of money the Internal Revenue Service (IRS) assumes has been paid to the seller of an item that has been sold on an installment basis.

  • Unsterilized Foreign Exchange Intervention
    Unsterilized foreign exchange interventions take place when a country's monetary authorities influence exchange rates and its money supply.

  • Unsubordinated Debt
    Unsubordinated debt is an obligation that must be repaid before any other form of debt if the debtor goes bankrupt or insolvent.

  • Unsubscribed
    An unsubscribed IPO has gained little interest from big investors in advance of its release on the exchanges.

  • Unsystematic Risk
    Unsystematic risk, or specific risk, is that which is associated with a particular investment such a company's stock.

  • Unusual Item
    An unusual item is a nonrecurring or one-time gain or loss that is not considered part of normal business operations.

  • Unweighted Index
    An unweighted index gives equal allocation to all securities within the index.

  • Unwind
    To unwind is to close out a trading position, with the term tending to be used when the trade is complex or large.

  • Up-and-In Option
    These are exotic options usually available to institutional investors on stocks or Forex.

  • Up-and-Out Option
    An up-and-out option ceases to exist if the underlying moves above a certain price called the barrier.

  • Up/Down Gap Side-by-Side White Lines
    There is an up and down version of the pattern. The up version is a white candle followed by a gap up and two white candles of similar size. The down version is a black candle followed by a gap down and two white candles of similar size.

  • Up-front Mortgage Insurance (UFMI)
    Up-front mortgage insurance (UFMI) is an additional insurance premium of 1.75% that is collected on Federal Housing Administration (FHA) loans.

  • UP-Market Capture Ratio Up Volume
    The up-market capture ratio is the statistical measure of an investment manager's overall performance in up-markets.

  • Upfront Pricing
    The term upfront pricing refers to the interest rates and limits established for a borrower based on a credit card company's underwriting and issuance.

  • Upgrade
    An upgrade refers to the positive change in an analyst's outlook of a particular security's valuation based primarily on that security's improving fundamentals.

  • Upstream Guarantee
    An upstream guarantee is when a parent company's debt or obligation is backed by one or more of its subsidiaries.

  • Uptick
    An uptick is a transaction for a financial instrument executed at a higher price than the previous trade.

  • Uptick Rule
    The SEC's Uptick Rule requires short sales to be conducted at a higher price than the previous trade.

  • Uptick Volume
    Uptick volume is the volume of shares traded while a stock price is on the rise.

  • Uptrend
    An uptrend is an overall move higher in price, created by higher swing lows and higher swing highs.

  • Use Tax
    Use tax is a sales tax on purchases made outside one's state of residence for taxable items that will be used, stored or consumed in one's state of residence and on which no tax was collected in the state of purchase.

  • Useful Life
    The useful life of an asset is an accounting estimate of the number of years it is likely to remain in service for the purpose of cost-effective revenue generation.

  • User Fee
    User fees describe the cost necessary to gain access to a product, service, or facility.

  • v
  • V-Shaped Recovery
    A V-shaped recovery is characterized by a quick and sustained recovery in measures of economic performance after a sharp economic decline.

  • Value-Added Tax (VAT)
    A value-added tax, or VAT, is added to a product at every point on the supply chain where value is added.

  • Value at Risk (VaR)
    A measure of the potential loss from market and other risks, at a given level of confidence, utilising one or other statistical methodology.

  • Value Averaging
    Value averaging is an investing strategy that works like dollar cost averaging (DCA) in terms of steady monthly contributions, but differs in its approach to the amount of each monthly contribution.

  • Value-Based Pricing
    Value-based pricing is a strategy of setting prices primarily based on a consumer's perceived value of the product or service in question.

  • Value Chain
    A value chain is a step-by-step business model for transforming a product or service from idea to reality.

  • Value change
    Value change is an adjustment made to a stock's price to reflect the number of outstanding stock shares issued and currently held by investors.

  • Value Date
    A value date refers to some future point in time at which the value of an account, transaction, or asset becomes effective.

  • Value Deflation
    Value deflation is when businesses reduce the value they deliver to the customer rather than raising the sale price.

  • Vanilla
    A straightfforward financial instrument with no customised components.

  • Variable Cost
    A variable cost is a corporate expense that changes in proportion with production output.

  • Variable Cost-Plus Pricing
    Variable cost-plus pricing adds a markup to the variable costs to include a profit margin that covers both the fixed and variable costs.

  • Variable Cost Ratio
    The variable cost ratio indicates the additional costs that are incurred in increasing production.

  • Variable Coupon Renewal Note (VCR)
    A variable coupon renewable note (VCR) is a debt security that matures every week, with the principal reinvested at a new interest rate which is reset at a fixed spread over a reference rate.

  • Variable Death Benefit
    Variable death benefit refers to the amount paid to a decedent's beneficiary that is based on the performance of an investment account within a variable universal life insurance policy, a financial product that functions as both insurance and an investment.

  • Variable Interest Entities (VIE)
    A variable interest entity (VIE) refers to a legal business structure in which an investor has a controlling interest despite not having a majority of voting rights.

  • Variable Interest Rate
    A variable interest rate fluctuates over time because it is based on an underlying benchmark interest rate or index that changes periodically with the market.

  • Variable rate bonds
    Bonds on which the coupon interest varies with some predeermined benchmark rate.

  • Variance
    A statistical measure of dispersion around a mean value.

  • Vault cash
    Cash kept on hand in a depository institution's vault to meet day-to-day business needs, such as cashing cheques for customers.

  • Vega
    A measure of the sentivity of an option price of changes in implied volatility.

  • Velocity of money
    The rate of turnover of money: the average times per year that a rand spent in buying the total amount of final goos and services produced in the economy. A larger velocity means that a given quantity of money is associated with a greater rand volume of transactions.

  • Vertical Analysis
    Vertical analysis makes it easier to understand the correlation between single items on a balance sheet and the bottom line, expressed in a percentage.

  • Vertical Equity
    Vertical equity is a method of income taxation whereby more taxes are paid as income increases.

  • Vertical Integration
    Vertical integration is when a company owns or controls its suppliers, distributors or retail locations to control its value or supply chain.

  • Vertical Line Charting
    Vertical line charting is a technique used by technical traders and market technicians to track the price trend of a security in order to forecast future price moves.

  • Vertical Market
    A vertical market is a market encompassing a group of companies and customers that are all interconnected around a specific niche.

  • Vertical Merger
    The purpose of a vertical merger between two companies is to heighten synergies, gain more control of the supply chain process, and increase business.

  • Vertical Spread
    A vertical spread involves the simultaneous buying and selling of options of the same type (puts or calls) and expiry, but at different strike prices.

  • VIX
    VIX is short for the Chicago Board Options Exchange Volatility Index. It is a measure used to track volatility on the S&P 500 index, and is the most well-known volatility index on the markets.

  • Void Contract
    A void contract is a formal agreement that is effectively illegitimate and unenforceable from the moment it is created.

  • Void Transaction
    A void transaction is a transaction that is canceled before it settles through a consumer's debit or credit card account.

  • Voidable contract
    A voidable contract is a formal agreement between two parties that may be rendered unenforceable for a number of legal reasons.

  • Volatility Arbitrage
    Volatility arbitrage is a trading strategy that attempts to profit from the difference between the forecasted future price-volatility of an asset, like a stock, and the implied volatility of options based on that asset.

  • Volatility Quote Trading
    Volatility represents how large an asset's prices swing around the mean price - it is a statistical measure of its dispersion of returns.

  • Volatility Ratio
    The volatility ratio is a technical measure used to identify price patterns and breakouts.

  • Volatility Skew
    Volatility skew describes the observation that not all options on the same underlying and expiration have the same implied volatility assigned to them in the market.

  • Volatility Smile
    When options with the same expiration date and the same underlying asset, but different strike prices, are graphed for implied volatility the tendency is for that graph to show a smile.

  • Volatility Swap
    A volatility swap is a forward contract with a payoff based on the difference between realized volatility and a volatility strike.

  • Volker Rule
    The Volcker Rule is a federal regulation that generally prohibits banks from conducting certain investment activities with their own accounts and limits their dealings with hedge funds and private equity funds, also called covered funds.

  • Volume Analysis
    Volume analysis involves examining relative or absolute changes in an asset's trading volume in order to make inferences about future price movements.

  • Volume Discount
    A volume discount is a price reduction offered to buyers who purchase in bulk quantities.

  • Volume of Trade
    Volume of trade refers to the total number of shares or contracts exchanged between buyers and sellers of a security during trading hours on a given day.

  • Volumetric Production Payment
    Volumetric production payments (VPPs) are a way to convert a portion of oil or gas production into a cash flow stream for investors.

  • Voluntary Accidental Death and Dismemberment Insurance (VAD&D)
    Voluntary accidental death and dismemberment insurance (VAD&D) does not cover all death or injury-related circumstances.

  • Voluntary Accumulation Plan
    A voluntary accumulation plan allows an investor to set up an automatic monthly share purchase.

  • Voluntary Bankruptcy
    Voluntary bankruptcy is a bankruptcy proceeding that a debtor initiates because they cannot satisfy the debt.

  • Voluntary Compliance
    Voluntary compliance refers to the principle that citizens will cooperate with their government by filing honest and accurate annual returns.

  • Voluntary Conveyance
    Voluntary conveyance refers to an elective transfer of title from one individual to another without adequate consideration.

  • VWAP definition (volume-weighted average price)
    VWAP is the abbreviation for volume-weighted average price, which is a technical analysis tool that shows the ratio of an asset's price to its total trade volume. It provides traders and investors with a measure of the average price at which a stock is traded over a given period of time.

  • w
  • Wallet
    Software with which you send and receive cryptocurrency. Remember, the coins are stored on the blockchain. The wallet contains the private keys that authorise the owner to send these coins to another wallet.

  • Warrant
    A type of exchange-listed option.

  • Wealth
    All resources owned by an individual, including all assets.

  • West Texas Intermediate (WTI)
    WTI stands for West Texas Intermediate (occasionally called Texas Light Sweet), an oil benchmark that is central to commodities trading. It is one of the three major oil benchmarks used in trading, the others being Brent crude and Dubai/Oman.

  • Whitepaper
    A document prepared by an ICO project team to interest investors with its vision, cryptocurrency use and cryptoeconomic design, technical information, and a roadmap for how it plans to grow and succeed.

  • Wholesale market
    Refers to the market where financia transactions are usually conducted between banks or between banks and large companies.

  • Withdrawal benefit
    A retirement fund benefit payable when an employee leaves employment.

  • Withholding tax
    A tax levied in a certain jurisdictions on dividends paid to foreign entities.

  • Working order
    A working order is a general term for either a stop or limit order to open. It is used to advise your broker to execute a trade when an asset reaches a specific price.

  • Writer
    Option writers collect a premium in exchange for giving the buyer the right to buy or sell the underlying at an agreed price within an agreed period of time.

  • x
  • XRT
    XRT is an extension printed after the ticker symbol for a stock that indicates that the stock is trading on an ex-rights basis.

  • y
  • Year to Date (YTD)
    YTD refers to a period of time beginning the first day of the current calendar year or fiscal year up to the current date.

  • Yield
    Yield is the income earned from an investment, most often in the form of interest or dividend payments. Yield is one of the ways in which investments can earn a trader money, with the other being the eventual closing of a position for profit.

  • Yield-Based Option
    A yield-based option allows investors to buy or sell calls and puts on the yield of a security rather than its price.

  • Yield Basis
    The yield basis method quotes the price of a fixed-income security (such as a bond) as a yield percentage instead of a dollar value.

  • Yield curve
    A graphical representation of the interest rates for particular types of bonds with different terms of maturity.

  • Yield to maturity (on a bond)
    The discount rate that equates all of the cash flows of a bond, including the principal repayments, to the bond's currentmarket price.

  • Yield-X
    A trading platform offered by the JSE Ltd to facilitate the tradng of interest rate products and cash bonds.

  • z
  • ZAR
    The rand is the official currency of South Africa. It is subdivided into 100 cents.

  • ZARX
    is a licensed stock exchange that uses disruptive fintech to create a more efficient market for all.

  • Zero Cost Collar
    A zero cost collar strategy is used to hedge against volatility in an underlying asset's prices through the purchase of call and put options that place a cap and floor on profits and losses for the derivative.

  • Zero-coupon bonds
    Bonds that pay no coupons and are characterised by a single bt a single principal payment payment on the maturity date. They offered and issued and traded at a significant discount.

  • Zero-coupon yield curve
    A yield curve showing the relationship between the yield on zero-coupon bonds and their different maturities. Zero-coupon bonds are used to compile this curve

  • Zero-sum game
    The situation in which speculating results in a zero net cash gain to the market as a whole, since the cash gain to a party on one side of a contract is, by definition, equal to the cash loss to the party on the other side of the contract.

  • Zone of Resistance
    A zone of resistance is the price range achieved when a security's price rises to a predicted near-term high, known as a support level.

  • Zone of Support
    A zone of support is when a security's price falls to a predicted low, known as a support level.

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