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ADR – American Depositary Receipt (see DR below)

AIM – London’s Alternative Investment Market (part of the London Stock Exchange)

AG – Aktiensgesellschaft or public limited liability company (in Germany, Austria, Switzerland)

Arbitrage – the tactic of taking advantage in differentials between two different market prices, to secure a profit

ASX - the Autralian Stock Exchange


File:Bulle und Bär Frankfurt.jpg
Bull and bear in front of the Frankfurt Stock Exchange

Bear Market – one where share prices (also those for commodities or bonds) are falling, or expected to fall during the medium period, if not longer (see also Bull market)

Bearer sharesee Shares

Bond – a loan or debt security which the issuer – government or private - promises to repay with interest when it reaches its date of maturity

Bookrunner – the bank or funder which leads, or manages, the issuance of corporate loans, debt or other securities, usually in association with other such financiers

Bought deals – are ones between brokers and a company, where the former by an entire stock issue from the latter in a private transaction, then sell the shares on to private purchasers (see also Brokers)

Brokers/brokerages – place shares on behalf of companies, selling them to private clients who want to invest in those companies. Banks, as well as specialised brokerage Houses, act as brokers (see also Bought Deal)

Bull market – one where share prices (also commodities and bonds) are rising or expected to rise over the medium period, if not longer (see also: Bear market)

BV – a limited company whose shares are privately registered and not freely transferable (in Netherlands)


CDIs – CHESS Depositary Interests are the form in which ordinary shares and some options are traded electronically on the ASX (see also: DIs)

Collateral – a guarantee to meet a debt, usually by ceding an asset, in the event that the debtor is unable to repay the loan

Common sharessee Ordinary shares

Contrarian investors buy (sometimes sell) stocks in the belief that they have been mis-priced by the “market”; the aim is, of course, to make a profit by doing so

Convertible bonds – bonds which can be exchanged for stock in the company which issues them on terms set at their issue

CSD/ICSD – An (International) Central Securities Depository holds securities/bonds and settles trades between them. The Depository Trust Company (DTC) in the US holds more than US$2 trillion in non-US securities and ADRs (qv)


Debenture – a bond which is not secured by property or collateral

DIs – Depositary Interests are UK-registered securities that enable trading in non-UK incorporated and registered company shares, to be undertaken and settled within the UK in electronic/paperless form

DR – a Depositary Receipt, enables investment in a company registered offshore, through one’s home-domiciled bank.

Derivative – literally something which “derives” from something else; in financial markets, futures and options contracts are used to bet on the rise or fall of value of an equity, credit “product” or other type of security (See also: Appendix - 2 in the Introduction).

Distressed situationssee Special Situations

Dividend – that portion of a company’s net profits, proposed by its board and confirmed at an annual shareholders’ meeting, which represents revenue on a share


EDR – European Depositary Receipt (see DR)

Event driven – a euphemism for the hedge fund strategy of profiting from falls in the value of a company’s shares (see also: Special situations)

ETFs/ETNs – Exchange Traded Funds/ Exchange Traded Notes (See also: Appendix - 1 in the Introduction)

Equity/Equitiessee Shares and Private Equity


Floating rate – a debt subject to periodic changes in interest rates

Flow Through shares - see Appendix - 3 in the Introduction

Fund of Funds – a portfolio held in a number of investment funds, rather than directly in equities or bonds, viz a “Hedge Fund of Funds”

FY – Financial Year; usually running for twelve months from middle or late calendar year


GDR – Global Depositary Receipt (see DR)

GmbH – a company with limited liability (in Germany, Austria, Switzerland and in Central Europe)

Grey Market - securities neither listed on any stock exchange, nor even via the Pink Sheets (qv). Such trades are reported to a Self-regulatory organization (SRO) which then passes the information on to market data companies.


IPO – the Initial Public Offering om a stock exchange of shares in a specific company


Junior – a mining company registered on a stock exchange (eg. TSE, TMX, AIM, ASE, AltX), seeking venture (or “start up”) capital, usually for exploration purposes.

JV – Joint Venture


File:LME entrance sign.jpg
London Metal Exchange

LBO (Leveraged Buy Out) – where a company raises debt finance to acquire another

LLC – Limited Liability Company

London Metal Exchange (LME) – the world’s premier forum for daily trading in the prices of aluminium, copper, nickel, zinc, other nonferrous metals and (from 2009) iron ore. It was taken over by the Hong Kong Exchange (HKex) in late 2012.

Contracts are agreed by means of “open cry” across a physical space, to which only eleven named Ring Traders are admitted, and which are purportedly backed by physical supply held in LME warehouses

LP/LLP – Limited (Liability) Partnership


Managed Fundsee Mutual fund

MBO (Management Buyout) – where managers acquire a company for which they work

M & As – Mergers and Acquisitions

MarCap/Market Capitalisation – the value of a company’ shares, consolidated between their price(s) on one or more stock exchanges at any given moment

Mutual Fund – one which pools money from many clients, to invest in stocks, bonds et al. Known in Europe as a Unit Trust; in the US as an OEIC (qv) and in Australasia as a Managed Fund


Nominees – brokers, or banks acting as such, which hold a named person’s shares in a non-paper form, rather than as a share certificate (see Footnote 2).


OEIC (Open-ended investment company) - arranges for customer’s money to be added to that of other investors and spread across a wide range of equities and/or fixed interest securities

Ordinary shares – those which normally carry voting rights (see also Shares and Preference shares)


P/E – Price to Earnings ratio, which evaluates dividend received against the price, paid for a share; the higher the P/E then, usually, the less attractive the stock.

Pink Sheets - a private company that facilitates the exchange of securities between qualified independent brokers; it is not a stock exchange.

PLC (Plc, plc) – Public Limited Company (in UK and Ireland)

PLUS market - is the London junior exchange which "prepares" companies for a launch on the London Stock Exchanges' AIM (qv).

Preference shares – grant the owner dividends, even when ordinary shareholders may not receive them, as well as the first pick of proceeds when a company is liquidated. They normally do not carry voting rights

Private Equity – share holdings not listed on a registered stock exchange; see also Venture Capital

Pty Ltd – Proprietary Limited (in Australia)


Re-insurance – insuring an insurer and thus spreading liability

Revolving credit/debt – a flexible facility by which loans are made and repaid with interest over time, up to an agreed limit and without a fixed rate of repayment

Ring tradersee London Metal Exchange

Royalties – payments made for the use of an asset (in the case of mining usually a produced metal or mineral) delivered to the “owner” of the asset (usually a government), either at gross or net value of the asset, as determined by the owner


File:Bruxelles Bourse.jpg
Stock market of Brussels

SE – Stock Exchange

Securitiessee Bond

Senior debt/debenture – a debt which has priority in any conversion to equity etc.

Shares – also called “equities” or stock – is that portion of a limited company’s capital, registered either in the owner’s name or in an account held by a bank, stock broker, or other intermediary (known as a Bearer share). (See also Footnote 2).

Share option – a privilege, sold by one party to another that gives the buyer the right, but not the obligation, to buy (call) or sell (put) a stock at an agreed-upon price within a certain period, or on a specific date.

Share warrant – a paid-up share which can be transferred by its holder to another party without any need for a registered transfer (UK) (see also Warrant)

Special situations – hedge fund jargon for taking advantage of failing companies, usually by “shorting” the asset – i.e. betting on the failure itself. The term is also a euphemism for “vulture funds” which buy failing equity or bonds, and government debt, at a cheap rate, in order to cash in on their collapse

SPVs/SPEs – Special Purpose Vehicles or Entities provide a means of isolating risks taken by a bank or other firm, often in order to escape taxation or regulation. They were one of the main concoctions used by Enron, to criminally conceal its vast financial losses during the late 1990s

Standy Equity Distribution Agreements (SEDAs) enable a publicly traded company to raise additional equity capital by selling new stock without making a “seasoned equity offering” – in effect it is a type of private placement.

Pioneered in 2001 by the Yorkville Advisors hedge fund, SEDAs allow a funder to privately purchase a defined maximum number of shares in a company over a specified period, at a discounted price. The scheme has been wide open to abuse and allegations of fraud (See: Yorkville Advisors).

Stock – ordinary or common shares held in a company

Sub-account – a category of general insurance, aimed at a specific sector (e.g. buildings, shipping, accident)

SWF – Sovereign Wealth Fund: an investment agency of a state government in onshore and offshore companies


Underwriting – the process by which an issue of equity, debt, bonds, is afforded credit worthiness

Unit – the minimum amount of stocks, bonds, commodities, or other securities accepted for trading on an exchange. While one unit often equates to one share, it may also include a subscription warrant (qv)"


Venture Capital – start-up funding provided for new companies (in the case of mining, usually junior exploration companies) and generally classified as part of private equity (qv)

Voting sharessee 0rdinary shares


Warrant – a piece of paper which entitles the owner to purchase shares in a specific company, at a specified price (known as “exercising” the warrant(s)