Found:  24 Items

Back Office

Bank or brokerage house departments not directly involved in sales or trading. Support the trading of the securities including trade confirmation and settlement, record keeping, and regulatory compliance.

Base Rate

Annual interest rate on which lending charges are calculated by British banks.

Basis Point

Usually one hundredth of a percentage point (0.01 per cent), used in quoting movements in interest rates or yields on securities.

Bear

Someone who believes or speculates that a particular security or the securities in a market will decline in value is referred to as a bear.

Bear Market

A bear market is a market in which a group of securities falls in price or loses value over a period of time. A prolonged bear market may result in a decrease in market prices by 20% or more. A bear market in stocks may be due to investor’s expectations of economic trends; in bonds a bear market results from rising interest rates.

Bearer Stocks

Stock not registered in the name of an owner, who can thus remain anonymous. Common on the continent of Europe.

Bed and Breakfast

Now obsolete overnight UK capital gains tax related manoeuvre intended to establish a tax loss benefit.

Benchmark

A measurement or standard that serves as a point of reference by which process performance is measured.

Benchmarking

A structured approach for identifying the best practices from industry and government, and comparing and adapting them to the organization's operations. Such an approach is aimed at identifying more efficient and effective processes for achieving intended results, and suggesting ambitious goals for program output, product/service quality, and process improvement.

Bid Price

The price at which investors will redeem their investment ie net asset value per share or unit.

Big Bang

Changes in UK stock exchange practices that took place in 1986. They abolished the segregation between brokers and jobbers (securities market makers) and ended the system of fixed commissions.

Big Five

The big Anglo-American accountancy firms: Arthur Andersen; Deloitte & Touche; Ernst & Young; KPMG; and PricewaterhouseCoopers. Mergers have reduced them from an original Big Eight. Individual country arms of the groups may have slightly different names. Big Four In Japan, the largest securities houses: Daiwa, Nikko, Nomura and Yamaichi. In the UK, once the four largest English 'high-street' banks: Barclays, Midland (now HSBC), Lloyds (now Lloyds TSB) and National Westminster (now part of Royal Bank of Scotland); takeovers have made the term obsolete.

Blue Chip

Refers to companies that have become well established and reliable over time, demonstrating sound management and quality products and services. Such companies have shown an ability to function throughout both good and bad economic time, usually paying dividends to investors even during lean years.

Blue Chips

See Blue Chip

Bond

A debt instrument (written promise) whereby the issuer usually promises to pay the holder a specified amount of interest for a specified length of time and to repay the loan on maturity or expiry date; can be short-term (maturity in one to three years), medium-term (three to ten years) or long-term (over 10 years). Bondholders are creditors of the issuer and they do not have ownership privileges. A bond may be registered either by issuing certificates in the bondholder's name, book-entry or in bearer certificates. There are many different kinds of bonds and different methods of evidencing bond ownership. The most common types are: Secured bonds are backed by collateral that may be sold if the issuer fails to pay interest and principal when they are due. Unsecured bonds or debentures are only backed by the full faith and credit of the issuer. There is no specific collateral. Convertible bonds give holders the right to exchange the bonds for other securities of the issuer at a future date, under prescribed conditions.

Bonds

Interest-bearing securities which entitle the holder to interest during the life of the bond and repayment of the loan at maturity.

Bonus Issue

Also called a scrip issue or capitalisation issue, a bonus issue is when the company gives to each shareholder, free of charge, a number of new shares for each share he or she already holds. After the bonus issue, the company's share price is likely to fall to reflect the number of new shares issued.

Bottom-Up

Refers to the process of building an investment portfolio by identifying the companies in which to invest rather than choosing countries / sectors first and companies last (opposite of Top-down).

Broker/Dealer

Firms that act as securities dealers or brokers, or perform both functions. A broker is an individual or firm who acts as an intermediary between a buyer and seller, usually charging a commission, while a dealer is any person or company in the business of buying and selling securities for his or her own account, through a broker or otherwise

Brokerage

Used interchangeably with broker when referring to a firm rather than an individual. Also called brokerage house or brokerage firm.

Bull

Someone who believes that a particular security or the securities in a market will increase in value is known as a bull.

Bull Market

A long period of rising prices of securities, usually by 20% or more. Bull markets generally involve heavy trading and are marked by a general upward trend in the market, independent of daily fluctuations. A bull market in bonds is generally caused by declining interest rates.

Buy Side

Financial organisations such as mutual funds, insurance companies and money managers which buy large portions of securities thus effecting trades for an institutional investor.

Buy Side analyst

An analyst employed by a non-brokerage division of a firm who provides research for the company’s own money managers ( as opposed to individual investors). Unlike that of the sell-side analysts employed by brokerage firms, research produced by buy-side analysts is usually unavailable outside of the firm that hired the analyst.