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here are some of the commonly used words which u hear frequently and some times u dont understand which is what? i tried to gather here all the common words here u might find it helpful. dont thank me coz i collected them form various web sources,i just wish it helps some one. thanks.

A



Authorised capital: The amount of capital that a company has been authorized to raise by way of equity and preference shares through the Articles of Association / Memorandum of Association of the company. This is typically the capital at the time it has been incorporated. The face value is also closely linked to the first issue of authorized capital.



B



Basel II is an international business standard that requires financial institutions to maintain enough cash reserves to cover risks incurred by operations. The Basel accords are a series of recommendations on banking laws and regulations issued by the Basel Committee on Banking Supervision (BSBS). The name for the accords is derived from Basel, Switzerland, where the committee that maintains the accords meets.



The three essential requirements of Basel II are:

Mandating that capital allocations by institutional managers are more risk sensitive.



Separating credit risks from operational risks and quantifying both.



Reducing the scope or possibility of regulatory arbitrage by attempting to align the real or economic risk precisely with regulatory assessment.



Basel II has resulted in the evolution of a number of strategies to allow banks to make risky investments, such as the subprime mortgage market. Higher risks assets are moved to unregulated parts of holding companies. Alternatively, the risk can be transferred directly to investors by securitization, the process of taking a non-liquid asset or groups of assets and transforming them into a security that can be traded on open markets







Bear Market: a period when most stocks are declining in value.



Bid Price: the price you’re offered when you’re selling a stock



Blue Chips: large, stabile companies.



Bond: a long-term promissory note issued by a corporation



Book Value: total shareholder’s equity from balance sheet divided by the

number of shares outstanding.



Book building method: please visit this page to understand what is the process of book building method.



http://www.scribd.com/doc/36341735/Book-Building-Method-in-Security-Market-of-Bangladesh



Bottom Line: after-tax earnings. Literally, the bottom line on an income statement (a.k.a. net income or profit).



Bought Deal: rather than simply acting as an agent, an investment bank or other underwriters directly purchase securities from the issuer, usually at a discount to the market price, and then sells them to investors.



Breakout: a charting (technical analysis) term meaning a stock price has moved above or below a previous trading range.



.

Bull Market: a period when most stocks are increasing in value.



C



Capital Gains Distribution: payments to mutual fund holders representing the fund holders share of the fund's profits resulting from the sale of stocks in the fund's portfolio. The fund reduces its share price by the same amount, so the fund holder doesn't gain from the transaction, however the fund holder is liable for payment of any resulting capital gains taxes.



Cash & Cash Equivalents: cash in bank and all securities that can readily be converted to cash within three months or less.



Cash Flow: After tax income minus preferred dividends and general partner distributions plus depreciation, depletion, and amortization (Market Guide definition). See Operating Cash Flow and Free Cash Flow.



Charting: making buy and sell decisions based entirely on stock price and volume history (same as technical analysis).



Commission: fees paid to a broker to execute a stock or mutual fund trade.



Commodities: minerals such as gold or silver, food such as corn or wheat, animal products, and the like.



Common Stock: shares of a publicly held corporation, usually includes voting rights. Common stock has lower priority in event of liquidation than preferred shares.



Consolidation: a charting term meaning a stock price is in a trading range, not moving significantly up or down.



Contrarian: similar to value investor. Looks for stocks with prices beaten down out of proportion to fundamentals.



Convertible Bond: a bond that can be exchanged for shares of stock.



Cost of Sales: cost of materials and labor required to produce products or services. Gross profit is sales minus cost of sales.



Coupon Rate: the interest rate on a bond.



Current Ratio: current assets (cash, inventories, and accounts receivables) divided by liabilities due within one-year.



D



Diluted Earnings (a.k.a. fully diluted earnings): total of after tax (bottom line) earnings divided by number of common shares including unexercised stock options, and unconverted preferred stock and convertible bonds. Undiluted earnings would be after tax earnings divided by issued stock only, not considering outstanding options, etc.

Direct Stock Purchase Plan (DSP): a plan implemented by a corporation allowing purchase of shares, or fractions of shares, directly from the company, usually on a regular basis.



Discount: the difference between a bond's face value and its current market price.



Dividends: cash or stock paid to shareholders, usually on a quarterly schedule.



Dividend Reinvestment Plan (DRIP): a plan implemented by a corporation to allow investors to collect dividends in shares (usually fractions of shares) of stock rather than in cash.



Discount Broker: a stockbroker charging lower commissions than full-service brokers. Discount brokers do not give investment advice.



Dividend Yield: total of 12-month's dividends paid (historical or forecast) divided by the latest share price.



Downtick: a stock trade executed at a lower price than the previous trade.



Downtrend: stock price is heading down.



E



Earnings per Share (EPS): after tax 12-month's earnings divided by the number of shares outstanding.



Ex-Dividend: the day after dividends are paid.



Execution: a trade completion. For instance, your trade was executed at taka1200.00

.

Extended Hours Trading: trades executed outside normal market hours.



F



Fair Value: the true value of a stock based on criteria of the user’s choosing.

A stock is said to be overvalued when the share price exceeds the fair value.



Fiscal Year: any 12-month period designated by a corporation as their accounting year. Once set up, a corporation's fiscal year does not change.

free Cash Flow: operating cash flow minus amounts spent on plants and equipment and minus dividends.



Front-End Load: sales charge paid when purchasing a mutual fund.



Full Service Broker: a stockbroker offering investment advice and other services not usually offered by discount brokers.



Fully Diluted: number of shares outstanding including options granted but not yet exercised.



Fundamental Analysis: analyzing stocks by looking at earnings, sales, profit margins, etc



G



Goodwill: the amount of a company's shareholder's equity that exceeds the value of its hard assets.



Green Shoe: an agreement allowing the lead underwriter to buy additional shares of an IPO at the offering price after the IPO begins trading.



Gross Margin: gross profit divided by sales.



Gross Profit: profit a company makes on goods and services before considering overhead expenses. Gross profit is sales minus cost of sales.



Growth Stocks: companies with consistent annual earnings and sales growth of at least 15%.



I



Index: a composite representing the value of a group of stocks.



Industry Group: companies in related businesses.



Initial Public Offering (IPO): first sale of stock to the public by a corporation.

Insiders: Officers, directors and anyone else owning more than 10% of stock outstanding.



Insider Ownership: number of shares owned or controlled by insiders.



Insider Trading: shares bought and sold by company insiders. It’s legal as long as they follow the SEC’s reporting requirements.



Intangibles: soft assets such as patents, trademarks, etc.



Intraday: stock trading tracked in periods shorter than one day.



Investment Bank: an organization, usually a stock brokerage firm, involved in taking a new company public (IPO), consulting on mergers and acquisitions, handling corporate borrowing, etc.



L



Liquidity: a measure of the number of shares, or dollar value of shares traded daily. Mutual funds and other institutional buyers prefer high liquidity stocks so they can easily move in and out of positions.



Load: a sales commission paid when you buy (front-end) or sell (back-end) a mutual fund.



Lockup Period: time after IPO, typically 180 days( depends), when insiders are prohibited from selling their shares.



Long-Term Investments: balance sheet item reflecting investments in other companies, etc

Margin: borrowing funds from your broker to buy stock.



M



Margin Account: a brokerage account with approved credit so you can buy stock on margin.



Market Capitalization: latest stock price multiplied by number of shares outstanding (shares issued).



Market Maker: intermediary for stocks traded on us or uk, and for off-hours trading in NYSE stocks. When you trade us or uk stocks, you buy your shares from the market maker. When you sell shares, you sell them to the market maker. The market maker keeps the difference between the bid and asked prices.( not yet introduced in our country)



Market Order: order with broker to buy or sell stock at current market price.



Message Board: a location on a Web site dedicated to the discussion of a particular topic, usually a single stock or industry sector. Discussions are not real-time. Someone posts a message, and then others respond over a period of hours or days.



Money Supply: the amount of money in circulation. The Federal Reserve Board attempts to control the growth of the US economy by regulating the increase in money supply.



Moving Average (MA): the average closing price of a stock over a specified period. For instance, the 10-day MA is the average closing price for the past 10 days. Stocks are said to be in an uptrend when above their MA and in a downtrend when below. The most widely followed MAs are 50 days and 200 days. Long-term investors tend to look at the 200-day MA while active traders are more likely to pay attention to the 50-day MA. Many investors look at both. As a general rule, it's best to avoid stocks trading below both their 50- and 200-day MAs



N



Net Asset Value: value of all stock and other assets owned by mutual fund divided by total number of shares fund has outstanding.



Net Income: After-tax earnings (a.k.a. bottom-line or profit). Earnings per share (EPS) is net income divided by the number of outstanding shares.

Non-Operating Expenses: expenses not due to basic business of company.

Non-Operating Income: income not derived from basic business of company.

Normalized Earnings: profits a company can be expected to achieve taking out cyclical effects and unusual events such as one-time write-offs caused by late product releases, customer bankruptcies and the like.



O



Operating Earnings: not the same as operating income. See pro forma earnings.



Operating Income: sales minus all expenses except income taxes and other items not related to basic business.



Operating Margin: operating income divided by sales.



P



Paid up capital: Paid-up capital is essentially the portion of authorized stock that the company has issued and received payment for.

The total amount of shareholder capital that has been paid in full by shareholders.



Payout Ratio: Percentage of earnings paid out in dividends.



Price to Book Ratio (p/b): latest share price divided by book value stated in latest report.



Price to Earnings Ratio (p/e): latest share price divided by 12-month earnings

per share (eps). Also a measure of the market's enthusiasm for a company.

Price to Sales Ratio (p/s): latest share price divided by 12-month sales per share.



PRIMARY MARKET Market for new issues of securities, as distinguished from theSecondary Market, where previously issued securities are bought and sold. A market is primary if the proceeds of sales go to the issuer of the securities sold.

This is part of the financial market where enterprises issue their new shares and bonds. It is characterised by being the only moment when the enterprise receives money in exchange for selling its financial assets.





Profit Margin: bottom line (after tax) earnings divided by sales.



Pro Forma Earnings: (as if) earnings without considering certain expenses such as inventory write downs, severance pay, depreciation and amortization charges, or just about anything else the company feels like excluding to make its earnings look better. Also known as core earnings, ongoing earnings, earnings excluding special items, or operating earnings.

Property, Plant and Equipment (PPE): all hard assets such as buildings, airplanes, machinery, etc.



Prospectus: a document circulated to potential investors prior to an IPO describing a company’s business plan.



R



Redemption Fee: Fee charged when you sell a mutual fund, if you haven’t held the fund for the prescribed minimum time.



Relative Strength: stock price performance compared to the S&P 500, or to the entire stock market. Can measure performance over any time span, but most often uses 12 months. Relative strength is different from RSI (Relative Strength Indicator) indicator used in technical analysis.



Research and Development (R&D): costs of developing new products and services.



Return on Assets: after tax income divided by total assets

.

Return on Capital (return on invested capital): after tax income (latest 12 months) divided by total of shareholder’s equity plus long term debt, plus other long term liabilities.



Return on Equity: after tax income (latest 12 months) divided by shareholder’s equity (from balance sheet).



Revenues: a company’s sales.





S



SECONDARY MARKET The market where securities are traded after they are initially offered in the primary market. Most trading is done in the secondary market.

To explain further, it is Trading in previously issued financial instruments. An organized market for used securities.



Shareholders Equity: the difference between the total of assets and liabilities shown on a company’s balance sheet. Book value is the shareholders equity divided by the number of outstanding shares.



Shares outstanding: the total number of shares issued by a corporation.



Sharpe Ratio: An attempt to compare a fund’s performance to risk. Higher Sharpe Ratio funds are said to be better performers than lower ratio funds.



Short Interest: number of shares borrowed by short sellers.



Short Interest Ratio: number of days it would take to cover short interest at average daily volume (short interest divided by average daily volume).



Short Sale: selling stock you don’t own. You hope it drops in price so you can buy it back later at a lower price. You must have a margin account with your broker to sell short.



Short Squeeze: a sharp move up in stock price forcing short sellers to liquidate their positions.



Short-term Debt: borrowings that must be repaid within one-year.



Short-term Investments: stocks and other liquid securities.



Spot market: 3 days before the record date. Only matured money is able to buy a script.

.

Spread: the difference between the bid and ask prices for a stock.



T



Technical Analysis: making buy and sell decisions based entirely on stock price and volume history (same as charting).



Top: a charting term meaning the stock price is going down from here.



Top-Line: sales or revenues.



V



Value Investor: one who looks for out of favor (value priced) stocks.



Value Stocks: companies currently out of favor with investors. These companies usually have low valuation ratios (price/earnings less than the S&P 500, price/sales ratio less than 2, price/book ratio less than 2).

Venture Capitalist: an investor involved in financing a company’s operations before going public in exchange for an ownership percentage.



Volume: number of shares traded during a specified time, usually one day.

Watch Portfolio: a group of stocks or funds that you are tracking, but don’t currently own.



W



WEBS (World Equity Benchmark Shares): country-specific indexes that trade like stocks. WEBS give investors the opportunity to invest in 17 different foreign countries.



Y



Yield: Interest and dividends paid to mutual fund shareholders as a percentage of share price (Net Asset Value). Also the effective interest rate on