Stock Market Glossary
Stock market terminology can be quite confusing so we have compiled this list of the main terms used in the UK financial industry as a reference guide. We will be expanding this section in the near future. You can also play a game of hangman with these terms
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- Advance / Decline Ratio
- The ratio of the number of stocks increasing in price to the number of stocks decreasing in price. Also called the "breadth of the market."
- Agent
- One who acts for another. When a firm acts as agent, it is acting as a broker, bringing together a buyer and a seller. As agent it does not buy or sell for its own account.
- Alpha
- A statistical measurement used to determine the percentage of the change in a stock's price due to factors internal to the company, rather than to the stock market's fluctuations.
- Amortization
- (i) A reduction in a debt or fund by periodic payments covering interest and part of the principal. (ii) Writing off an intangible asset investment over the projected life of the assets.
- Analyst
- A person with expertise in evaluating financial investments; he or she performs investment research and makes recommendations to institutional and retail investors to buy, sell, or hold.
- Annual Report
- A booklet sent by companies to shareholders once a year dipicting the company operations and describes earnings, balance sheets, profits, sales and other important facts about the company.
- Arbitrage
- Taking advantage of minor aberrations in the market to try to profit as the market returns to normal.
- Arbitration
- A method of settling disputes. The parties present their arguments to a panel of one or more arbitrators who will render a decision. There are no appeals from arbitration.
- Ask Price
- Lowest price at which a dealer is willing to sell a security, commodity or currency (alternative term to Offer).
- Asset Allocation
- Allocating your investment assets over a number of investments, (stocks, mutual funds, bonds, money market account, etc).
- Assets
- Any possessions that has value in an exchange.
- Average Maturity
- The average time to maturity of securities held by a mutual fund. Changes in interest rates have greater impact on funds with longer average life.
