Glossary of Stock Market

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C

CAGR
The year-over-year growth rate of an investment over a specified period of time. It's an imaginary number that describes the rate at which an investment would have grown if it grew at a steady rate

Call Option
An option where the buyer gets the right to buy the underlying security at a specified
 future date.

Capital Employed
Total liabilities and equity less non-interest bearing liabilities.

Capital Gain
An increase in the value of a capital asset (investment or real estate) that gives it a higher worth than the purchase price. The gain is not realized until the asset is sold.

Capital Gains Distribution
Payments to mutual fund shareholders of profits from the sale of securities in a fund's portfolio. Capital gains distributions (if any) are usually made annually.

Capital Turnover
Annual total Revenue as a percentage of total assets.

Capitalization
The value of a company as measured by the market price of its common shares, multiplied by the total number of shares that have been issued

Capitalize
When costs of items such as buildings, equipment and other items with a useful lifetime exceeding one year are categorized as assets to be depreciated over a number of years, rather than being expensed in the year of purchase.

Capital Gains Tax
A type of tax levied on capital gains incurred by individuals and corporations. Capital gains are the profits that an investor realizes when he or she sells the capital asset for a price that is higher than the purchase price.

Carry Forward
Settlement where positions are carried forward from one settlement to another settlement.

Cash Flow Statement
This document provides aggregate data regarding all cash inflows a company receives from both its ongoing operations and external investment sources, as well as all cash outflows that pay for business activities and investments during a given quarter.

Cash Flow per Share
Cash flow from operating activities divided by average number of shares.

Cash Settlement
Payment for transactions done in one settlement on the due date.

Change in Stock Price
The change in stock price is recorded in points. The fraction amount depends on the security being traded. The change in stock price is the difference between the opening stock price and the current price the stock is selling at. For example, if stock XYZ opened at 10, and is now selling for 11.50 it would be up +1.50. The +1.50 is the change in stock price.

Circuit Breaker
A mechanism used to restrain the market when it gets overheated. The Exchange may relax the limit after a cooling off period of about half an hour.

Clear Title
A title to an asset proves your legal ownerships of that asset. That asset be mortgaged, sold, rented or otherwise transferred, temporarily or permanently, to another person. This represents an encumbrance on the title. Banks are reluctant to authorize loans against assets which have encumbrances and prefer a clear title.

Clearing House

It is a legal counter party to both legs of every trade. The netted purchase and sale positions of the trading. Members are settled through the clearing house

Choppy Market
A stock market condition whereby prices swing up and down considerably but with no resulting overall price movement in either direction.

Closely Held Shares
The shares held by individuals closely related to a company.

Closing Price
The final price at which a security is traded on a given trading day.

Close
The closing price is the last traded price for the stock on a particular day. The previous close is the price a stock closed on the previous day.

Closed-End Fund

Investors of such a fund buy shares from other share holders and sell shares to other investors. Share price is determined by supply and demand for fund

Collateral
It is used to provide a guarantee for a loan. Can be encased by the bank if you default in any way on repayment of interest or principle of your loan or other obligations. It includes negotiable instruments, shares or goods and titles to immovable assets. If you feel that your bank works at a snail's pace, try defaulting on a loan - the bank will encase your collateral so fast you'll never know what hit you till it is too late.

Commodity
A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often used as inputs in the production of other goods or services.

Common Stock
Equity or ownership in a corporation. Stockholders participate in a company's profits or losses through dividends and changes in the stock's market value.

Commission
A fee charged by brokers for their service in facilitating investment has to be handled through brokers registered on that exchange.

Commodity Index
An index that tracks a basket of commodities to measure their performance.

Common Shareholder
An individual, business or institution that holds common shares in a company, giving the holder an ownership stake in the company. This will also give the holder the right to vote on corporate issues such as board elections and corporate policy, along with the right to any common dividend payments.

Consensus Estimate
A figure based on the combined estimates of the analysts covering a public company. Generally, analysts give a consensus for a company's earnings per share and revenue; these figures are most often made for the quarter, fiscal year and next fiscal year.

Correction
Corrections are generally temporary price declines, interrupting an uptrend in the market or asset.

Crash
A major decline in a financial market.

Cum Rights

A share is described as cum rights when the purchaser is entitled for current rights

 

 

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