Accrued interest

The unpaid interest which is accumulated on a security, either from

the date of issuance or the previous coupon Payment Date, to the
present date. The accrued interest is paid at determined payment
intervals throughout the life of the security.

Actively Managed
An investment strategy that will consistently take significant active
bets vs. a benchmark. Active exposures include common factors,
such as size, style or sectors. The active exposures can also come
from security selection, where security weights differ from the
benchmark weights.

Actively Managed ETF

An Exchange Traded Fund (ETF) that attempts to replicate the
exposures of a designated actively managed portfolio. (See also
Exchange Traded Fund).

Alpha
A measure of investment performance on a risk-adjusted basis. Alpha
measures the excess of return over the level of risk

Arbitrage
A strategy to take advantage of profitable opportunities in different
markets arising from differential price anomalies.

Ask
The price at which a trader or market maker is willing to sell a
contract.

Bankruptcy
It is a legal status of a person or other entity that cannot repay the debts
it owes to creditors. In most jurisdictions, bankruptcy is imposed by
a court order, often initiated by the debtor.

Beta
A number describing the correlated volatility of an asset in relation to
the volatility of the benchmark to which the asset is being compared.
This benchmark is generally the overall financial market and is often
estimated via the use of representative indices, such as the S&P 500. A
beta of more than 1 indicates that the stock is more volatile than the
market and a beta of less than 1 indicates that the stock is less volatile
than the market.

Bid price
The price at which a trader or market maker is willing to purchase a
contract to enter into a transaction.

Bull Market

A financial MARKET of a group of securities in which prices are rising or

are expected to rise. The term "bull MARKET" is most often used to refer
to the stock market, but can be applied to anything that is traded, such
as bonds, CURRENCIES and commodities.

Bear Market
A MARKET condition in which the prices of securities are falling, and
widespread pessimism causes the negative sentiment to be self-
sustaining. As investors anticipate losses in a bear market and selling
continues, pessimism only grows.

Benchmark
A set of conditions against which a product or business is measured.

Bid-Ask Spread
The bid-ask spread is the difference between the price at which a market
maker is willing to buy an asset and the price it is willing to sell at.

Cash Settlement
The discharge of an obligation by payment or receipt of a net cash
amount (as opposed to delivery of the physical asset).
Clearing House
An agency or separate corporation of a futures exchange responsible
for settling trading accounts, clearing TRADES, collecting and
maintaining margin monies, regulating delivery and
reporting TRADING data. Clearing houses act as third parties to all futures
and options contracts - as a buyer to every clearing member seller and a
seller to every clearing member buyer

Clearing Member
A member of an exchange clearinghouse, responsible for
executing client trades and other financial commitments of customers

Compounding
The process by which the value of an investment increases by adding the
accumulated interest back on the principal amount. In effect, the
investment is earning interest on interest as well as principal

Correlation
A statistical measurement of the extent to which the movements of two
variables are related. In finance, it is normally used to describe the
relationship between the price movements of two financial instruments.
Correlations range from -1(directly opposite) to +1(same direction). The
value of 0 signifies that the price movement/return is independent.

Corporate Action
Any event initiated by a corporation which impacts its shareholders. For
some such events, shareholders may or must respond to the corporate
action or select from a list of possible actions. Examples include mergers,
spinoffs, stock buybacks, and stock splits

Circuit Breaker
A circuit breaker is a mechanism employed by a market in order to
temporarily suspend trading in certain conditions, including sudden, deep
price falls. One aim of the use of circuit breakers is to prevent mass panic
selling and to prevent associated herd behaviours.

Collateral
A guarantee that is used by the collateral provider to secure an obligation
to the collateral taker. Collateral usually takes the form of cash or
securities. It is also referred to as margin.
Day Order
An order that expires automatically at the end of each day’s trading
session if it has not met its conditions for execution.

Day trading
When a security or commodity underlying is bought and sold within the
space of a single trading day

Delisting
The process of removing the quotation of the price of a listed company’s
share on the Exchange on which it trades, thereby preventing the
purchase or sale of that stock through the Exchange. Delisting normally
occurs if a company declares bankruptcy, following a merger, acquisition
or other Succession Event, or if the company ceases to satisfy the listing
rules of the relevant Exchange.

Delivery
The physical movement from Seller to Buyer of the underlying asset
on which the derivative is based.

Dealer
A dealer is an entity that will buy and sell securities on their own account,
acting as principal to transactions

Dividend
A distribution of corporation profits after tax to shareholders. Dividends
can be paid to stockholders in the form of Stock or Cash.

Equity
The value of ownership interest in the business, calculated by deducting
liabilities from assets

Ex-dividend date
The date from which the price of a share is reduced by the upcoming
unpaid dividend (henceforth called ex-dividend) announced by the share
issuer. If a share is sold between this date and record date, Seller instead
of the Buyer will be entitled for the dividend

Exchange
A central marketplace with established rules and regulations where
buyers and sellers meet to trade securities or futures and options
contracts.

Fixed Rate
A rate which does not vary during the life of a transaction

Financial Instrument
A financial instrument is an asset or evidence of the ownership of an
asset, or a contractual agreement between two parties to receive or
deliver another financial instrument

Hedging
Hedging is the practice of offsetting an entity's exposure by taking out
another opposite position, in order to minimise an unwanted risk. This can
also be done by offsetting positions in different instruments and markets.

Hybrid Instrument
Any security that includes more than one component. For example, a
hybrid security might be a fixed income note that includes a foreign
exchange option or a commodity price option

Initial Public Offer (IPO)

When a company first offers shares on the stock market to sell them to
the general public. Also known as floating on the stock market.

Index
A synthetic portfolio of underlying assets calculated and published by
a designated index sponsor and used to give an indication of market
trends and to measure the performance of the specific market or
sector to which the index relates.

Index arbitrage
The simultaneous purchase (sale) of stock index futures and the sale
(purchase) of some or all of the component stocks that make up the
particular stock index to profit from sufficiently large inter-market spreads
between the futures contract and the index itself

Liquidity
Liquidity is a complex concept that is used to qualify the markets and the
instruments traded on these markets. It aims at reflecting how easy or
difficult it is to buy or sell an asset, usually without affecting the price
significantly. Liquidity is a function of both volume and volatility. Liquidity
is positively correlated to volume and negatively correlated to volatility. A
stock is said to be liquid if an investor can move a high volume in or out
of the market without materially moving the price of that stock. If the
stock price moves in response to investment or disinvestments, the stock
becomes more volatile

Leverage
The magnification of gains and losses by only paying for part of the
underlying value of the instrument or asset.

Loss
A measure for determining Termination Payments following an Event of
Default or Termination Event under the 1992 ISDA Master Agreement.
Loss is defined as the total losses and costs (or gain) incurred by the
Non-Defaulting Party (or Affected Party) with respect to
terminated transactions, including costs of funding and the re-
establishment of any hedge or related trading position. Loss is determined
by the Non-Defaulting Party (for an Event of Default) or Non-Affected
Party (for a Termination Event) acting reasonably and in good faith. The
terminating party must be able to show in reasonable detail how the loss
was calculated.

Margin
The sum of money or value of securities required to be transferred
and maintained, in order to provide protection to the recipient of
margin against default by a counterparty to a trade.

Market order
An order to buy or sell a futures contract or option at the prevailing
market price when the order reaches the floor of the exchange

Market-Maker
A participant in the financial markets who guarantees to make
simultaneously a bid and an offer for a financial contract with a pre-set
bid/offer spread (or a schedule of spreads corresponding to different
market conditions) up to a pre-determined maximum contract amount..
Net present value
The difference between the initial investment amount and the sum of
present values of all future cash flows arising from the investment. It is a
measure of the profitability of an investment

Offer/Ask price
The price at which a trader or market maker is willing to sell a contract

Operational risk
The risk of loss resulting from inadequate or failed internal processes,
people and systems or from the impact of external events

Portfolio
A collection of open positions (securities or other assets) held by an
investor

Price Discovery
Price discovery refers to the mechanism of price formation on a market,
based on the activity of buyers and sellers actually agreeing on prices for
transactions. Price discovery is affected by factors such as: supply and
demand, liquidity, information availability and so on.

Primary Market Operation

Primary Market Operations are transactions related to the issuance of new
securities. They differ from secondary market operations which deal with
the trading of securities already issued and admitted to trading.

Prospectus
A prospectus is a document that describes a financial security for
potential buyers. A prospectus provides investors with information about
the security or offers concerned such as a description of the company's
business and financial statements, a list of material properties and any
other material information. In the context of an individual securities
offering, such as an initial public offering, a prospectus is distributed by
underwriters or brokerages to potential investors.

Range
The lowest and highest price of the stock recorded during a specific
trading period

Redemption
The repurchase of a security (such as a bond, preferred stock, or mutual
fund) by the issuing company from the holder of that security, at par or at
a Premium price, at maturity, or before if it is cancelled by the company.

Redemption Date
The date on which a security (bond or loan stock) matures and the
issuer redeems the security by paying the investor the principal and any
interests.

Redemption Price
The price at which a security (bond or preferred stock) can be redeemed
by the issuer.

Speculation
Taking positions in financial instruments without having an underlying
exposure that offsets the positions taken.

Standard Deviation
In finance, a statistical measure of dispersion of a time series around its
mean; the expected value of the difference between the time series and
its mean; the square root of the variance of the time series

Secondary market
A market where previously issued securities are bought and sold

Short
The sale of a borrowed security, commodity or currency with the
expectation that the asset will fall in value

Tick
The minimum price movement of a financial contract, expressed in
fractions of a point

Treasury bill
A zero coupon US government debt instrument with an original maturity
of one year or less, generally issued with 13, 26 or 52 week maturities.
Treasury bills are sold at a discount from par with the interest earned
being the difference between the face value received at maturity and the
price paid.

Treasury bond
US Government-debt security with a coupon and original maturity of more
than 10 years. Interest is paid semi-annually.
Treasury note
US Government-debt security with a coupon and original maturity of
one to ten years.

Warrants
The permission issued to purchase an underlying asset at a
stipulated price (usually higher than current market value, but
lower than future market value) within a long-term time period.

Yield
The rate of return on an investment, normally expressed as an annual
percentage rate.