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| A
B C D
E F G
H I J
K L M N
O P Q R
S T U
V W X Y
Z |
| A |
| ADVANCED COMPANIES |
Advanced companies meet higher asset, market value and shareholder
distribution requirements than those classified as venture companies. (Tier 1) |
| ANNUAL REPORT |
The formal financial statements and report issued by a company to its
shareholders after its fiscal year-end. |
| ARBITRAGE |
The
simultaneous purchase of a security on one stock exchange and the sale of the same
security or an equivalent of that security on the same or another exchange which can
result in a profit. |
| ASSETS |
Everything
a company or a person owns or is owed, such as money, securities, equipment and
buildings. Assets are listed on a company's balance sheet. |
| AVERAGES AND INDICES |
Statistical
tools that measure the state of the stock market or the economy, based on the performance
of stocks, bonds or other components. Examples are the CDNX Index, the Dow Jones
Industrial Average and the Consumer Price Index. |
| AVERAGING DOWN |
Buying
more of a security at a lower price than the original investment. The aim of
averaging down is to reduce the average cost per unit of the investment. |
|
|
| B |
| BEAR
MARKET |
A market where
prices are declining. A "bear" is a person who expects that the market or the
price of a particular security will decline. |
| BID
AND ASK |
The
bid is the highest price a person is willing to pay for a security. The ask is the
lowest price at which someone is willing to sell a security. Together, the bid and ask
prices are referred to as a "quote" or "quotation" . |
| BLUE
CHIP STOCKS |
Nationally-known
common stock, usually with a continuous dividend payment record in good times and bad and
other strong investment qualities. These stocks are usually high-priced but have a
tendency to be low-yielding. |
| BOARD
LOT |
A regular unit of trading. Board lots on the Canadian Venture
Exchange are:
| Shares under |
$0.10 |
1000 shares |
| Shares at |
$0.10 to $0.99 |
500 shares |
| Shares at |
$1.00 and over |
100 shares |
|
| BROKERAGE
FIRM/ BROKER |
A
securities firm or an investment advisor associated with a firm. When acting as a broker
for the purchase or sale of listed stock, the investment advisor does not own the
securities him or herself, but acts as an agent for the buyer and seller and charges a
commission for these services. |
| BULL
MARKET |
A
market in which prices are rising. A "bull" is a person who expects that the
market or the price of a particular security will rise. |
|
|
|
| C |
| CALL
OPTION |
An option which
gives the holder the right, but not the obligation, to buy a fixed amount of a certain
stock at a specified price within a specified time. Calls are purchased by investors
who expect a price increase. |
| CANADIAN
DERIVATIVES CLEARING CORP. (CDCC) |
The
clearing corporation which processes and guarantees settlement of equity, bond and stock
index options traded on the Toronto Stock Exchange and the Montreal Exchange. Previously
known as Trans Canada Options Inc. (TCO). |
| CAPITAL |
To
an economist, capital means machinery, factories and inventory required to produce other
products. To investors, capital means their cash plus the financial assets they have
invested in securities, their home and other fixed assets. |
| CAPITAL
GAIN OR LOSS |
Profit
or loss resulting from the sale of a certain assets classified under the federal income
tax legislation as capital assets. This includes stocks and other investments such as
investment property. |
| CAPITAL
POOL COMPANIES |
The
CDNX capital pool program offers a unique listing opportunity that brings experienced
management teams with proven public financing ability together with development stage
companies in need of capital and management expertise. Unlike traditional public
companies, capital pools list and start trading without an operating business. The nature
of their business is to find and acquire a promising early-stage venture and their
treasuries are funded expressly for the search and due diligence process. |
| CAPITAL
STOCK |
All
shares representing ownership of a company, including preferred as well as common shares. |
| CAPITALIZATION
OR CAPITAL STRUCTURE |
Total
dollar amount of all money invested in a company, such as debt, preferred and common
stock, contributed surplus and retained earnings of a company. |
| CERTIFICATE |
The
physical document which shows ownership of a bond, stock or other security. |
| COMMISSION
|
The
fee charged by an investment advisor for buying or selling securities as an agent on
behalf of a client. |
| COMMODITIES
|
Products
used for commerce that are traded on a separate, authorized commodities exchange.
Commodities include agricultural products and natural resources such as timber, oil and
metals, and are the basis for futures contracts traded on these exchanges. |
| COMMON
SHARES / COMMON STOCK |
Securities
which represent ownership in a company and carry voting privileges. Common
shareholders may be paid dividends but only after preferred shareholders are paid.
Common shareholders are last in line after creditors, debt holders and preferred
shareholders to claim any of a company's assets in the event of liquidation. |
| CORPORATION
/ COMPANY |
A
form of business organization legally created under provincial or federal statutes which
has a legal identity separate from its owners. The corporation's owners - its shareholders
are liable for the debts only up to the amount of their investment (limited liability). |
| CUM-DIVIDEND |
With
dividend. Buyers of shares quoted "cum-dividend" are entitled to an
upcoming already-declared dividend. |
| CUM-RIGHTS |
With
rights. Buyers of shares quoted "cum-rights" are entitled to forthcoming
rights. |
| CYCLICAL
STOCK |
Stock
in an industry that is particularly sensitive to swings in economic conditions, such as
mining and forestry. |
|
|
| D |
| DAY
ORDER |
An order to buy
or sell a security valid only on the day the order is given. |
| DEBENTURE |
A
certificate of indebtedness of a government or company backed only by the general credit
of the issuer and unsecured by property or assets. |
| DELIST |
The
removal of a security's listing on a stock exchange. This is done when the security
no longer exists, the company is bankrupt, the public distribution of the security has
dropped to an unacceptably low level, or the company has failed to comply with the terms
of its listing agreement. |
| DEMAND
|
The
combined desire, ability and willingness on the part of consumers to buy goods or
services. Demand is determined by income and by price, which is, in part, determined by
supply. |
| DIVIDENDS
|
An
amount distributed out of a company's profits to its shareholders in proportion to the
number of shares they hold. A preferred dividend usually is for a fixed amount,
while a common dividend may fluctuate with the profits of the company. A company is
under no legal obligation to pay either preferred or common dividends. |
|
| E |
| EQUITY |
The stock or
ownership interest of shareholders in a company. |
| ESCROW |
Issued stock
held separately from free-trading shares until certain conditions are met. |
| EX-DIVIDENDS |
Without
dividend. If a share quoted "ex-dividend" is purchased, the investor is
not entitled to an upcoming already-declared dividend. The seller receives this dividend.
(See also "cum".) |
| EX-RIGHTS |
Without
rights. Buyers of shares quoted "ex-rights" are not entitled to forthcoming
rights. |
| F |
| FLOOR
TRADERS |
Employees of a
member of a stock exchange who execute buy and sell orders on the floor (trading area) of
the exchange for their firm and its clients. The traders are responsible for executing buy
and sell orders on behalf of their firm's clients. In a computerized trading environment
like CDNX, there are no floor traders. Instead, traders will execute buy and sell
orders from computer terminals in their offices. |
| FUTURES
CONTRACT |
An
agreement to buy or sell a commodity sometime in the future. |
|
| G |
| GOOD
DELIVERY |
A security that
is in proper form to transfer title (i.e. endorsed by the registered owner). To settle a
sale, the certificate must be surrendered "on good delivery" by the seller. A
certificate that bears a share transfer restriction will not constitute "good
delivery". |
| GOOD
TILL CANCELLED ORDER (GTC ORDER) |
This
is an order to buy or sell a security at a specified price, which is valid until executed
or cancelled. This is the same as an open order. |
| GUARANTEED
INVESTMENT CERTIFICATE (G.I.C.) |
A
deposit instrument most commonly available from trust companies or banks requiring a
minimum investment at a predetermined rate of interest for a stated term, i.e. one year,
five years, etc. Generally non-redeemable and non-transferable prior to maturity, but
there can be exceptions. |
|
| I |
| INFLATION
|
An overall
increase in prices for goods and services usually measured by the percentage change in the
consumer price index. |
| INSIDER
|
Directors,
senior officers and any other people, such as lawyers and accountants, who can be presumed
to have access to non-public information concerning a company. It also includes
anyone owning more than 10% of the voting shares in a corporation. |
| INVESTMENT
|
The
purchase or ownership of a security to make money by gaining income, increasing capital,
or both. Investments may also include artwork, antiques and real estate. |
| INVESTMENT
ADVISOR |
This
is a person employed by an investment dealer who provides investment advice to clients and
executes trades on their behalf in securities and other investment products. |
| INVESTMENT
CAPITAL |
Initial
investment capital necessary for starting a business which usually consists of inventory,
equipment, pre-opening expenses and leaseholds. |
| INVESTMENT
COUNSELLOR |
A
specialist in the investment industry paid by fee to provide advice and research to
investors with larger sized accounts. |
| INVESTMENT
DEALER |
This
refers to securities firms which employ investment advisors to work with retail and
institutional clients and has underwriting, trading and research departments. |
| INVESTMENT
DEALERS ASSOCIATION OF CANADA (IDA) |
The
Canadian investment industry's national trade association and self-regulatory
organization. The IDA represents and polices the activities of approximately 114
member firms. |
| ISSUE |
Any
of a company's securities, or the act of distributing them. Issued shares refer to that
part of the authorized shares which have been issued for sale by the corporation. The
total number of authorized shares does not have to be issued. |
|
| J |
| JITNEY |
The execution
and clearing of orders by one member of a stock exchange for the account of another
member. For example, investment dealer A is a small firm whose volume of business is
not sufficient to maintain a trader on the exchange. Instead it gives its orders to
investment dealer B for execution and pays a reduced percentage of the normal commission. |
| JUNIOR
CORPORATIONS |
Young
companies in the initial stages of operations and growth. |
|
| L |
| LIABILITIES |
These are the
debts and obligations of a company. Current liabilities are debts due and payable within
one year. Long-term liabilities are those payable after one year. Liabilities
are found on a company's balance sheet. |
| LIMIT
ORDER |
An
order to buy or sell a security at a price specified by the client. The order can be
executed only at the specified price or better. It sets the maximum price the client is
willing to pay as a buyer, and the minimum price he is willing to accept as a seller. |
| LIQUIDITY
|
This
refers to how easily securities can be bought or sold in the market. A security is
liquid when there are enough units outstanding to allow large transactions without a
substantial change in price. Liquidity is one of the most important characteristics
of a good market. Liquidity also refers to how easily investors can convert their
securities into cash and refers to a corporation's cash position, i.e. how much the value
of current assets exceed current liabilities. |
| LISTED
STOCK |
The
stock of a company which is traded on a stock exchange. Companies pay fees to the exchange
to be listed and must abide by the rules and regulations set out by the exchange to
maintain listing privileges. |
| LONG
|
A
term signifying ownership of securities. "I am long 100 XYZ" means that the
investor owns 100 shares of XYZ |
|
| M |
| MARGIN
ACCOUNT |
A client account
where he or she uses credit from the investment dealer to buy a security. The client
needs to deposit a "margin" amount with the balance being advanced by the
investment dealer against acceptable collateral such as investments. The investment
dealer can make a "margin call" and demand that the client deposit more money or
securities when the value of the account falls below a certain level. If the client does
not meet the margin call, the dealer can sell the securities in the margin account at a
possible loss to cover the balance owed. The client is also charged interest on the
money borrowed from the investment dealer for the purchase of the securities. |
| MARKET
|
(1)
The place where buyers and sellers meet to exchange goods and services. (2) The demand,
actual or potential, for a product or service. |
| MARKET
ORDER |
An
order placed to buy or sell a security immediately at the best possible price. |
| MATERIAL
CHANGE |
A
change in the affairs of a company that is expected to have a significant effect on the
market value of its securities - such as change in the nature of the business, a change in
the Board of Directors or the principal officers, a change in the share ownership of the
company that could affect control, or the acquisition or disposition of any securities in
another company. A material change must be reported to the applicable self-regulatory
organization. |
| MEMBER
FIRM |
A
stock brokerage firm or investment dealer which owns a seat on a particular stock exchange
or is a member of the Investment Dealers Association of Canada. |
| MONEY
MARKET |
Part
of the capital market established in which short-term financial obligations are bought and
sold. These include federal government treasury bills, short term Government of
Canada bonds, commercial paper, bankers' acceptances and guaranteed investment
certificates. Longer term securities when their term shortens to three years, are also
traded in the money market. |
|
| N |
| NET
EARNINGS |
That part of a
company's profits remaining after all expenses and taxes have been paid and out of which
dividends may be paid. |
| NET
WORTH |
The
difference between a company's total assets less its total liabilities. Also referred
to as shareholders' equity. |
| NEW
ISSUE |
A
stock or bond issue sold by a company for the first time. Proceeds may be used to
retire outstanding securities of the company, or be used for a new plant or equipment or
for additional working capital. New debt issues are also offered by
governments. |
|
| O |
| ODD
LOT |
A number of
shares equalling less than a board lot, the regular trading unit decided upon by the
particular stock exchange. Also, an amount less than the par value of one trading unit on
the over-the-counter market. For example, if a board lot is 100 shares, an odd lot would
be 99 or fewer shares. |
| OFFER
|
An
offer is the same as an ask, which is the lowest price at which a person is willing to
sell a security. This is opposed to a bid, which is the highest price at which a person is
willing to buy a security. |
| OPEN
ORDER |
An
order to buy or sell a security at a specified price, valid until executed or cancelled. |
| OPTIONS
|
An
investor who purchases an option has the right, but not the obligation, to buy or sell
certain securities at a specified price within a specified time. A put
option gives the holder the right to sell the security, a call option
gives the right to buy the security. |
| OVER-THE-COUNTER
(OTC) |
A
securities market made up of dealers who make trades over the telephone and/or computer.
It is also called "unlisted market," "street market" and "between
or inter-dealer market." Almost all bonds and debentures, as well as some
stocks, are traded over-the-counter in Canada. |
|
| P |
| PENNY
STOCK |
Low-priced
speculative issues of stock selling at less than $1.00 a share. |
| PORTFOLIO
|
The
entire combination of securities or investments an individual or institution holds. A
portfolio can contain a variety of government and company bonds, preferred and common
stocks from different businesses and other types of securities an assets. |
| PREFERRED
SHARES |
A
class of stock that entitles the owners to a stated dollar value per share in liquidation
(paid after bondholders) and a fixed dividend paid ahead of the company's common
shares. Preferred shares usually only have voting rights when a stated number of
dividends have been missed. Preferred shares are generally considered income
investments. |
| PRICE-EARNINGS
RATIO |
A
common stock's current market price divided by the annual per share earnings. This ratio
is a short way of saying that a share is selling at so many times its actual or
anticipated annual earnings. A price-earnings ratio is one tool used to compare one
share to another. |
| PROFIT
|
What
is left over for the owners of a business after all expenses have been deducted from the
revenues of a firm. Gross profit is the profit before corporate income taxes. Net profit
is the final profit of the firm after taxes have been paid. |
| PROSPECTUS
|
A
legal document describing securities being offered for sale to the public. These documents
usually disclose pertinent information concerning the company's operations, securities,
management and purpose of the offering. The prospectus must be prepared in
accordance with requirements of the applicable provincial securities commissions. |
| PUSH-OUT |
During
a stock split, a push-out occurs when new shares are forwarded directly to the registered
holders of old share certificates, without the holders having to surrender these old
shares. Both old an new shares have equal value. |
| PUT
OPTION |
An
option which gives the holder the right, but not the obligation, to sell a fixed amount of
a certain stock at a specified price within a specified time. Puts are purchased by those
who think a stock may go down in price. |
|
| R |
| REGISTERED
REPRESENTATIVE |
Now more
commonly referred to as an investment advisor. This is a person employed by an
investment dealer who provides investment advice to clients and executives trades on their
behalf in securities and other investment products. Investment advisors must attain set
educational qualifications, follow certain rules and regulations and be registered by the
securities commission of the province in which he or she works. |
| REVENUE
|
The
total amount of funds generated by a business. |
| REVERSE
TAKE OVER |
A
method of listing on a stock exchange whereby a private company acquires or "takes
over" the shares of a listed company; sometimes called a "back-door
listing." |
| RIGHT |
A
temporary privilege granted to a company's existing common shareholders to acquire
additional common shares directly from the company at a stated price. The price is
usually at a discount to the market price of the common stock on the day the rights are
issued, and the rights only are good within a specified time period. |
| RISK
|
The
future chance or probability of loss. |
|
| S |
| SEAT
|
The traditional
term for membership on a stock exchange. An investment dealer would buy a seat on the
exchange and one employee would be designated as the seat holder. |
| SECURITIES
|
Transferable
certificates of ownership of investment products such as notes, bonds, stocks, futures
contracts and options. |
| SECURITIES
COMMISSION |
Each
province has a securities commission or administrator which oversees the provincial
securities act. This act is a set of laws and regulations which set down the rules
under which securities may be issued and traded. |
| SEED
STOCK |
The
shares or stock sold by the company to provide start-up capital prior to carrying out an
initial public offering. |
| SETTLEMENT
DATE |
The
date on which a security buyer must pay for his or her purchase, or a seller must deliver
the securities he or she has sold. In Canada, investors have three days to pay for a
purchase or, if selling, three days to turn in the securities certificate if it is in
their possession. |
| SHORT
SALE |
The
sale of a security that the seller does not own. This is a speculative practice done in
the belief that the price of a stock is going to fall and the seller will then be able to
cover the sale by buying the security back at a lower price. The profit would be the
difference between the initial selling price and the subsequent purchase price. It
is illegal for a seller not to declare a short sale at the time of placing the order. |
| SPECULATOR
|
A
speculator is one who is prepared to accept calculated risks in the marketplace for
attractive potential returns. |
| SPREAD
|
The
gap between the bid and ask prices in the quotation for a security. |
| STOCK
SPLIT |
The
division of a company's outstanding common shares into a larger number of common shares. A
three for one split by a company with one million shares outstanding results in three
million shares outstanding. Each holder of 100 shares before the split would have 300
shares after the split, but his or her proportionate equity in the company would remain
the same - each unit would just be smaller. |
|
| T |
| THIN
MARKET |
A market in
which there are comparatively few bids to buy or offers to sell, or both. The phrase
may apply to a single security or to the entire stock market. In a thin market, price
fluctuations between transactions are usually larger than when the market is
liquid. A thin market in a particular stock may reflect lack of interest in that
issue, or a limited supply of the stock. |
| TIER
STRUCTURE |
Tier 1 - Advance
companies; Tier 2 - Venture company; Tier 3 - Dealer-quoted market for primarily consists
of existing Canadian Dealing Network quotations. |
| TradeCDNX |
The formal name
for the Exchange's award-winning computerized trading system, implemented in May 1988
under the name Vancouver Computerized Trading (VCT). Among the system's main features are:
speed of execution, market transparency, accuracy of quotations, and improved surveillance
capabilities. |
| TRANSFER
AGENT |
A trust company
appointed by a company to keep a record of the names, addresses and number of shares held
by its shareholders. Frequently the transfer agent also distributes dividend cheques to
the company's shareholders. |
|
| U |
| UNDERWRITING
|
The purchase for
resale of a security issue by one or more investment dealers or
"underwriters." The formal agreements pertaining to such a transaction are
called "underwriting agreements." |
| UNLISTED
|
A
security not listed on a stock exchange but traded on the over-the-counter market. |
| V |
| VENTURE
COMPANY |
A
classification of CDNX-listed companies which are in the early stages of development and
that meet the minimum asset, market value and shareholder distribution requirements (Tier
2). |
| VENTURE
CAPITAL |
Money
raised by companies to finance new ventures. |
| W |
| WARRANT
|
A certificate
giving the holder the right to purchase securities at a stipulated price within a
specified time limit. Warrants are usually issued along with a new issue of securities as
an inducement or sweetener to investors to buy the new issue. |
| Y |
| YIELD
|
This is the
measure of the return on an investment and is shown as a percentage. A stock yield is
calculated by dividing the annual dividend by the current market price of the
stock. For example, a stock selling at $50 and with an annual dividend of $5.00 per
share yields 10%. A bond yield is a more complicated calculation, involving annual
interest payments plus amortizing the difference between its current market price and par
value over the life of the bond. |
|
|
| Definitions in
part were provided by The Investor Learning Centre of Canada, the public education branch
of the Canadian Securities Institute dedicated to educating the average Canadian about
investing. |
|
| Last updated: May 01, 2001 |
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