Asset-backed securities; ie. securities backed by mortgage loans or such like which are obtainable if the creditor defaults.
The total deposit required from a client at any one time based on the size of the trade
American Depositary Receipt. These are shares of foreign companies listed on exchanges in the USA
After hours deal
Making a trading outside of market opening hours. For example the London stock exchange officially closes at 16:30, however it is possible to buy and sell shares after this time with some spreadbetting firms.
Austrian Futures and Options Exchange
Annual general meeting. Companies legally need to hold AGMs at least annually to give shareholders the opportunity to vote on key issues and company policies, such as the election of the directors,
The Alternative Investment Market. A UK trading market used by smaller companies looking to raise finance. AIM listed shares avoid full compliance with LSE rules.
A document showing that you have been allotted a certain number of newly issued shares
An option that can be exercised at any time during the life of the contract. European options, on the other hand, can only be exercised on the expiry date.
The listing rules require listed companies to produce an annual report to the shareholders that has been independently audited.
At a point in time, if you are able to place positions on a market with more than one counter party such that regardless of the outcome, you make money, this situation represents arbitrage.
As a simplistic example to illustrate this, if you are quoted a price to buy the FTSE at 5500 with one firm, and to sell the FTSE with another at 5505, then you have arbitrage, because if you place an equal stake with each firm, whatever level the FTSE finishes, you will win 5 x your stake (ignoring counterparty risk).
Stake = £1. FTSE closes at 5600.
Buy FTSE at 5500 = Win £100
Sell FTSE at 5505 = Lose £95
Win = £5 (ie 5 x your stake)
Arbitrage trading is a strategy used by investors to exploit price differentials between different firms to their own advantage.
Articles of Association
A legal document detailing key administrative information about a company..
Ask (also ‘offer’)
Spread bets are quoted in two parts: ‘buy’ and ‘sell’. The buy price is always the higher end of the quote as is referred to as the ask or offer price. Opposite to Bid
At the money
A term used to describe the state of an options contract, meaning that the option is current equal to the current market level.
An economic indicator that is considered by traders to determine the state of the economy.