Short Position
A position in which a person's interest in a particular series of options is as a net seller (writer) meaning that the number of contracts sold exceeds the number of contracts bought. It is similar in case of futures contracts.
Short Sale
A Short sale occurs when a person believing that the prices of shares will fall, sells shares that he does not own with the intention of purchasing the shares at lower price at the time delivery has to be made. This is also known as forward sale.
Slump
The bottom of a trade cycle when prices and employment are at their lowest, reflected in the downward movement of share prices, Recovery from a slump is often slow.
Spot
Spot purchase or sale implies that the deal is for immediate cash and the shares are to be delivered immediately.
Spreads
Options and futures transactions involving two or more series of the underlying asset.
Stag
A stag is an investor or speculator who subscribes to a new issue with the intention of selling them soon after allotment to realise a quick profit.
Strike Price
also called exercise price. The price for which the underlying stock index or other asset may be purchased (in the case of a call) or sold (in the case of a put) by the option buyer (holder) upon exercise of the option contract.
Secondary Market
The market in existing securities provided by the Stock Exchange.The secondary market, by providing a method of buying and selling securities, overcomes the basic mis-match between the needs of
savers/investors who provide new money and the requirements of capital raisers/borrowers.
The market in existing securities provided by the Stock Exchange.The secondary market, by providing a method of buying and selling securities, overcomes the basic mis-match between the needs of
savers/investors who provide new money and the requirements of capital raisers/borrowers.
Settlement
The payment of cash for securities and, conversely, the delivery of securities against payment - the conclusion of a securities transaction by delivery. Settlement is the payment or receipt of an outstanding due at the end of the settlement period.
The payment of cash for securities and, conversely, the delivery of securities against payment - the conclusion of a securities transaction by delivery. Settlement is the payment or receipt of an outstanding due at the end of the settlement period.
Settlement Day
The day on which bought securities are due for delivery to the buyer and the appropriate consideration to the seller.
The day on which bought securities are due for delivery to the buyer and the appropriate consideration to the seller.
Share certificate
This is a legal document which can be used as proof of ownership of a shareholding. But with 30,000 plus share transactions a day going through the London stockmarket in the early 1990's, a lot of paper was being
generated. A more efficient way of handling share settlements is to do it electronically as happens in many other countries.
This is a legal document which can be used as proof of ownership of a shareholding. But with 30,000 plus share transactions a day going through the London stockmarket in the early 1990's, a lot of paper was being
generated. A more efficient way of handling share settlements is to do it electronically as happens in many other countries.
Security
A Security is a valid and unique combination of Symbol and Series. Securities are traded in the Capital Market. Shares and Debentures are some examples of securities.
Seller
The trading member who has placed the order for selling the security.
Special Terms
The dealer can place an order that carries special conditions and restrictions regarding the way the order value can be matched. These terms are called Special Terms. The typical special terms are Minimum Fill and All or None.
Spot market
Orders that have spot settlement are entered into the Spot market.
Stop Loss
The dealer can enter a regular lot or a special term order with a 'trigger' price. Such orders are called Stop Loss orders. The stop loss orders are not taken for matching unless the trigger price is either reached or if it is surpassed by the last traded price for the security. Once the market price reaches or surpasses the trigger price, the 'stop loss' attribute is removed and the order is taken up for regular matching process.
Settlement guarantee
Settlement guarantee is the guarantee provided by the clearing corporation for settlement of all trades. This implies that the trade will be settled even if one of the parties to the trade viz; the buyer or the seller defaults. This prevents a cascading effect in the market due to the default of one party. The clearing corporation has set up a settlement guarantee fund through contributions from the members which is used for this purpose.
Splitting/Consolidation
The process of splitting shares that have a high face value into shares of a lower face value is known as splitting. For e.g: A share with a face value of Rs 100/- may be split into ten shares of Rs 10/- each. The reverse process of combining shares that have a low face value into one share of higher value is known as consolidation.
Spot trading
A market in which securities are traded for immediate delivery, as distinct from a forward market. Spot in this context means ‘immediately effective’, so that spot price is the price for immediate delivery. The actual delivery of securities takes place either on the same day of the contract or on the next day. Trading by delivery of shares and payment for the same on the date of purchase or on the next day.
Stop transfer
The instruction given by a registered holder of shares to the company to stop the transfer of shares as a result of theft, loss etc,. This is done in order that the shares are not unlawfully transferred in the event of loss or theft of the share certificates.
Settlement Period
For administrative convenience, the stock exchange divides the year into a number of settlement periods each of generally one week duration. The first and the last day trading of each settlement period are fixed in advance and so are settlement days for delivery and payment.
Specified Shares
For the purpose of trading, a security is categorised either as a 'specified' shares or a 'non-specified' shares. This is done by stock exchange authorities.
Stamp Duty
The ad valorem duty of 1/2 per cent payable by buyers for transfer of shares in their name.
share swap
An arrangement by which shares of one company are swapped for another in a specified ratio
stock option
An option given to a person to buy stock at a predetermined price at a future date
Screen Based Trading
Screen based trading uses modern telecommunications and computer technology to combine information transmission with trading in financial assets. Trading members are connected to the Exchange from their workstations to the central computer located at the Exchange via satellite using VSATs (Very Small Aperture Terminals). Buy and sell orders from the brokers reach the central computer located at NSE and are matched by the computer.
Screen based trading uses modern telecommunications and computer technology to combine information transmission with trading in financial assets. Trading members are connected to the Exchange from their workstations to the central computer located at the Exchange via satellite using VSATs (Very Small Aperture Terminals). Buy and sell orders from the brokers reach the central computer located at NSE and are matched by the computer.
Solicitor
A Solicitor is the auction participant who is on the opposite side of the Initiator's order. If the Initiator is a buyer then the solicitor will enter sell orders for the same security.
A Solicitor is the auction participant who is on the opposite side of the Initiator's order. If the Initiator is a buyer then the solicitor will enter sell orders for the same security.
Stock split
Splits are about as exciting as getting change for a Rs100 note. Depending upon the split ratio one share of a company is split into the decided number. This is done by reducing the face value of the scrip. Stock splits are expected to improve liquidity in a stock.
Trade
When a buy order matches with a sell order following the price-time priority logic, a trade takes place. The system generates a unique trade number for each trade.
Turnover Limit
This indicates the aggregate trade value limit on a daily basis set for a trading member. The Exchange sets the limit for each trading member of the Capital Market. The trade value for both buy and sell for a day are accumulated and the total is checked against this upper limit after every potential trade match.
Trade guarantee
Trade guarantee is the guarantee provided by the clearing corporation for all trades that are executed on the Exchange. In contrast the settlement guarantee guarantees the settlement of trade after multilateral netting.
Trading for delivery
Trading conducted with an intention to deliver shares as opposed to taking up a position and squaring off within the settlement.
Transfer deed
A transfer deed is a form that is prescribed by the Registar of Companies for effecting share transfer and is valid for a specified period. This transfer deed is the instrument that accompanies the share certificate while registering a transfer with a company. The transfer deed must be duly stamped and signed by or on behalf of the transferor and be complete in all respects.
Time Conditions
1. DAY - A day order, as the name suggests is an order which is valid for the day on which it is entered. If the order is not matched during the day, the order gets cancelled automatically at the end of the trading day.
2. GTC - A Good Till Cancelled (GTC) order remains in the system until it is cancelled by the user. It will therefore be able to span trading days if it does not get matched. The Exchange may however set an upper limit to the number of working days an order can stay in the trading system. At the end of this period, GTC orders are cancelled automatically from the system.
3. GTD - A Good Till Day (GTD) order allows the user to specify the number of days up to which the order should stay in the trading system. At the end of this period, the order gets flushed out from the system if it is not traded or is not cancelled by the trading member.
4. IOC - An Immediate or Cancel (IOC) order allows a user to buy or sell a security as soon as the order is released into the market, failing which the order is removed from the market. There could be a partial match for such an order resulting in one or more trades, in which case the balance order will be removed from the market.
All reference to days in the trading system would refer to working days. Thus, each day is counted on a working day basis i.e. intervening holidays are not considered. The days counted are inclusive of the day on which the order is placed. However, for Repo term, days are counted on a calendar basis.
Trader Workstation
A dealer can participate in the Capital Market only from the trader workstation, where the trading functions are available.
A dealer can participate in the Capital Market only from the trader workstation, where the trading functions are available.
Trading Member
It refers to a member of the BSE/NSE who is authorised to place orders in the Capital Market System. The term Broker or Brokerage house is also used to convey the same meaning.
It refers to a member of the BSE/NSE who is authorised to place orders in the Capital Market System. The term Broker or Brokerage house is also used to convey the same meaning.
Transmission
Transmission is the lawful process by which the ownership of securities is transferred to the legal heir/s of the deceased.
Unit of Trading
The minimum number of shares of a company which are accepted for normal trading on the stock exchange. All transactions are generally done in multiple of trading units. Odd lots are generally traded at a small discount.
Unquoted Shares
Shares in some companies, often smaller ones, are not traded on any stock exchange. Companies are not quoted (or listed) because either: they do not wish to be and prefer to run their businesses in relative privacy, orThey do not meet the listing requirements, such as minimum market capitalisation. In other words they are too small to join a stockmarket.For people interested in investing in unquoted shares, there are investment trusts which specialise in this area.
Shares in some companies, often smaller ones, are not traded on any stock exchange. Companies are not quoted (or listed) because either: they do not wish to be and prefer to run their businesses in relative privacy, orThey do not meet the listing requirements, such as minimum market capitalisation. In other words they are too small to join a stockmarket.For people interested in investing in unquoted shares, there are investment trusts which specialise in this area.
User
A person is recognised as a user of the Capital Market system, when he or she possess a valid user identifier and password, both of which are essential requirements for accessing the system.
A person is recognised as a user of the Capital Market system, when he or she possess a valid user identifier and password, both of which are essential requirements for accessing the system.
Underwrite
Under writing is effectively a guarantee wherein the underwriter (usually a bank, broker or financial institution) agrees to purchase a certain number of shares in the event the issue is under-subscribed for a certain fee.
