| Cable | |
| Cable refers to the British Pound / US Dollar currency pair on the foreign exchange market. | |
| CAC 40 | |
| The index of 40 of the largest companies on the official list of the French Stock Exchange. | |
| Call | |
| A further instalment due on shares which are only partly paid. For example, there were two calls on British Telecom shares of 40p each | |
| Call Option | |
| The option, but not the obligation, to buy a security at a fixed price on or before a predetermined date. A call option gives the holder the right to buy an instrument for a particular price within a set time. It involves the right, but not the obligation, to buy a market at a specified price (the strike price) on a particular date in the future. | |
| Callable | |
| Callable bonds give an investor the right to redemption at a set price on a set date. | |
| Call profit/loss | |
| for a long call, equal to the call value minus the premium. For a short call, equal to the premium minus the call value. | |
| Capital | |
| The money used to set up a business. Share capital is the money which is raised by selling ordinary and preference shares to shareholders. Loan capital is long-term borrowings. Authorised capital is the total amount in shares a company is empowered to issue. Paid-up capital is the amount of shares the company has sold to shareholders. | |
| Capital Gains Tax | |
| Capital Gains Tax (CGT) is a tax required to be paid to the Irish Revenue Commissioners on the profits made on the sale of an asset. You are required to pay CGT on the profits made on the sale of any shares you own. As such tax paid for profits made on an asset that has been held for a certain period of time. One of the advantages of spread trading is that currently there is no CGT liability on profits made because you as an individual never take ownership of the shares or other securities that you spread trade. Check here for a comprehensive explanation of our understanding of the tax rules regarding spread betting. | |
| Capitalisation issue | |
| See Bonus issue. Also known as scrip issue. | |
| Cash and Carry | |
| This is a forex strategy involving selling a low interest-rate currency and using the money to buy a currency that yields a higher rate. If for instance you sold a currency with a 2% interest rate and bought another with a 7% interest rate, you would gain 5% as long as the exchange rate between the currencies doesn't change. This strategy doesn't work in high volatility environments. | |
| Cash call | |
| a demand from a spread betting company for extra funds to cover a bet that is losing money. Also called margin call. | |
| Cash flow from operations | |
| Is the cash flow that a company has received from the normal operations of its business. Cashflow is one of the measures of a companies financial health often used by those who trade based on fundamental analysis. It is a company's cash receipts minus it's cash payments over a period of time. Some investors consider it the true measure of profitability. | |
| Cash Flow Statement | |
| In any business cash is king. Look at the annual, or interim accounts and there will be a cash flow statement setting out the sources and uses of the company's hard earned spondooliks. | |
| Cash price | |
| current market price of the actual physical share or commodity. Also called 'spot price' in the currency market. | |
| Cash settlement | |
| Some deals such as Gilts and traded options are done for cash rather than for account settlement. These deals have to be settled the day following the deal. | |
| CD | |
| See 'Certificate of Deposit' above. | |
| Certificate of Deposit | |
| A 'CD' is a Certificate of Deposit (time deposit). You can get these at any bank. You'll have to deposit a decent amount, maybe a minimum of 1,000.00 for a certain amount of time, maybe 1, 2 or 5 years. In return, the bank will offer you BOTH your money back at the end of the time, and a guaranteed payment for letting them keep it (that's 'interest'). Because they know they can have your money for a whole year, they will give you more interest (but not much more) than a standard savings account. | |
| CFD | |
| Contract for Difference (see our section on CFDs). CFD stands for Contract For Difference. It is a financial instrument that is very similar to a spread bet. | |
| CHAPS | |
| Clearing House Automated Payment System. A system in the Uk to make cash payments in pounds. The receiver gets the fund on the same day. | |
| Chapter 11 | |
| US system of bankruptcy protection. | |
| Charts | |
| Graphs plotting share price and market movements used to determine what might happen in the future. | |
| Chartist | |
| one which engages in technical analysis. | |
| Charts | |
| graphs that show the movement of a traded product. Chart patterns are used to make trading decisions. See technical analysis. | |
| Chart Patterns | |
| Commonly occurring chart patterns may be used to predict likely stock movements. There are two main types of chart patterns: continuation and reversal. Continuation patterns indicate that the direction of the current trend may continue. And reversal patterns indicate that the direction of the current trend may be reversing. | |
| Chief Executive | |
| Boss boss of a company. | |
| Chinese Walls | |
| Imaginary barrier constructed to ensure information from part of investment bank doesn't permeate to another. For instance a bank's reputation would be ruined if its dealers got wind of a big takeover organised by its M&A team. | |
| Circuit Breakers | |
| When an exchange imposes the closure of trading after prices have fallen by a certain percentage - a move designed to restrict so-called panic selling. | |
| Close to the money | |
| an option contract for which the strike price is close to the current market price of the underlying security. | |
| Closing price | |
| The price at which a product was traded to close an open position. See 'closing trade'. It may also refer to the price of the last transaction in a day's trading session. The price of the last transaction that a share was traded at on a given trading day. Most financial websites will post the closing price of all shares listed. In a spread trading context the closing price is the price at which you closed out an existing position. | |
| Closing trade | |
| a second bet of equal size to the initial bet, but in the opposite direction, and therefore taking a profit or loss. For example, a closing trade for a buy bet is a sell bet. Also called a closing bet. | |
| CME | |
| The Chicago Mercantile Exchange. | |
| Cocktail Swap | |
| A mixture of different kinds of swaps. Often used to spread risk on large deals. | |
| Collateral | |
| Assets pledged as margin in place of cash. As such assets pledged by an investor or borrower to cover the payment of a loan in the event of default. | |
| Compensation fund | |
| A fund maintained by the Stock Exchange to make good any losses to the public if a stockbroker should fail. | |
| Commercial Paper | |
| Form of short term IOU. | |
| Commission | |
| The cash you hand over for share dealing services. | |
| Commodities | |
| Commodities are any physical substance which investors can buy or sell. Examples include Gold, Silver, Oil, Natural Gas, Grain, Soybeans, etc.. As such physical products, such as foods or metals, which are processed and resold. Investors usually buy or sell these products through futures contracts. | |
| Consideratioin | |
| The price paid for something. | |
| Consolidation | |
| a price patterns characterized by extended sideways movement. It's a point in the stocks trading where there is no longer interest provided by the traders in pushing the stock, but investors believe there still could be gains in the longer term. | |
| Consumer Price Index | |
| The Consumer Price Index, used by the government as a measure of inflation. | |
| Contract Expiry Date | |
| The date on which a futures contract (or spread bet) expires. | |
| Contingent orders | |
|
A contingent order is used to manage risk on an already active position. A contingent (or 'if done') order is where a stop or limit order is placed and, 'if done,' a second order is automatically set against the new open position. In other words it is a mechanism by which first a stop or limit order is placed; then, if and only if the order is triggered, a second order is automatically set against the new position. Orders contingent on another event happening are a popular way of managing a position. A contingent order will be executed once certain conditions have been met on the traders position(s). One such contingent order would be if a trader were to place a stop loss on a trade in order to minimise their total exposure and exit a bet should it go against them. In the most common scenario, a limit or stop order is placed which will be executed if the market reaches a certain level. A contingent order is then placed against this first order when triggered. The second part of the order cannot be acted upon unless the first part has been executed. Example: The £/USD CFD quotes at 1.9550-1.9553. You set an order to sell 250,000 CFDs above the current market quote at 1.9600. If this order is filled and opens a position, you wish to work a stop order at 1.9700 and a limit order at 1.9500. |
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| Contract month | |
| The month during which a futures contract (or spread bet) expires. The month in which futures or spread bets must be settled. In the commodities market it would be the month that a commodity would be satisfied by making or accepting delivery. Also called delivery month. | |
| Contract length | |
| The length of time a position is open for before it expires. | |
| Contango | |
| A situation in which futures prices rise progressively as the maturity date moves further away from spot. The increase reflects the added cost of storage and insurance for commodities. As such a situation where the spot price of a commodity (price for immediate delivery) is lower than the future price (price for delivery at a future date). Often associated with the current and future price of Crude Oil. The opposite of Contango is Backwardation. Contango is the opposite of backwardation and is the normal relationship between spot and future prices. | |
| Contract Note | |
| Terms of your contract with a stock broker other intermediary.. | |
| Contrary opinion | |
| the general theory that one can profit by doing the opposite of the majority of traders are bullish, it implies that most market participants who believe prices are going higher are already long, and hence the path of least resistance is down. | |
| Controlled risk bet | |
| a bet which has a strictly limited maximum loss. In other words a controlled risk bet is a bet where the maximum loss is predefined (i.e. a bet with a guaranteed stop loss) | |
| Contract size | |
| the smallest amount at which a futures or options product can be traded in. Also called a lot size. | |
| Contract month | |
| the month during which a bet expires, often quarterly for financial markets. | |
| Contracts for difference (CFDs) | |
| a taxable derivative where the bid-offer price is quoted is very similar to that of the underlying product. It is a type of margin trading because only a margin of 10% to 20% of the full cost of the trade is required at the outset. | |
| Controlled risk bet | |
| see guaranteed stop-loss | |
| Convertible stock | |
|
A form of loan stock convertible into ordinary shares usually on a specified date, or
between specified dates. For example, a convertible loan stock 9% 2002 pays a regular 9% interest a year, but you have the choice to convert it into ordinary shares in the company at a specified rate of exchange (e.g. 2 ordinary shares for each £1 of loan stock) on say 1 June 2002. In some cases you are given a choice of dates and rates of exchange. For example, a convertible loan stock 2002/4 could offer you the choice of converting to ordinary shares on 1 June 2002 at 10 ordinary shares per £1 stock, or 1 June 2004
at 8 ordinary shares per £1 stock. It can be said that convertible stock offers a two-way bet because you continue to receive regular interest, but if the ordinary shares go up so will the price of the stock in accordance with the underlying value of the terms of the conversion. On the other hand, if the ordinary shares fall you can keep the convertible stock until its redemption date and continue to receive the regular interest payments. |
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| Corporate action | |
| an event that will change the capital structure of a company including a rights issue, scrip issue or special dividend. | |
| Corporate Governance | |
| Refers to the way a company is run. In the wake of disasters such as Enron and WorldCom, the market is keen to see companies have the right checks and balances in place to avoid wholesale fraud or abuse of office. | |
| Contract note | |
| A written confirmation from the broker that a bargain (buying or selling) has been carried out. | |
| Convertible stock | |
|
A form of loan stock convertible into ordinary shares usually on a specified date, or
between specified dates. For example, a convertible loan stock 9% 2002 pays a regular 9% interest a year, but you have the choice to convert it into ordinary shares in the company at a specified rate of exchange (e.g. 2 ordinary shares for each £1 of loan stock) on say 1 June 2002. In some cases you are given a choice of dates and rates of exchange. For example, a convertible loan stock 2002/4 could offer you the choice of converting to ordinary shares on 1 June 2002 at 10 ordinary shares per £1 stock, or 1 June 2004
at 8 ordinary shares per £1 stock. It can be said that convertible stock offers a two-way bet because you continue to receive regular interest, but if the ordinary shares go up so will the price of the stock in accordance with the underlying value of the terms of the conversion. On the other hand, if the ordinary shares fall you can keep the convertible stock until its redemption date and continue to receive the regular interest payments. |
|
| Coupon | |
| Rate of interest paid on a security. Coupon is the amount of interest payable on a fixed interest stock. | |
| Cover | |
| To exit or buy back a short position. An off setting transition to limit liability. | |
| Credit account | |
| This is an account with a spread betting providers where you do not have to put the full margin amount upfront as margin to open positions. You do, however, have to provide proof that you have the assets to cover any potential losses. In other words this is a type of account where the client does not need to deposit funds. However, proof that shows the client's assets are enough to cover margin and payments is required. The opposite of a deposit account. | |
| Credit limit | |
| This represents the maximum amount of losses you can incur in your account before a margin call is issued. In other words the total losses a client with a credit account can run on open bets before it is necessary to send in extra funds (or before a margin call). | |
| Credit Rating | |
| The evaluation given by a credit to a company or country based on its overall ability to pay its debts. The assumed creditworthiness of a company or sovereign nation issuing debt securities and their ability to repay the investor. Credit ratings affect the ability of a government or company to secure financing from banks and also inform the price their securities might command on the open market. | |
| Cross corners | |
| In sports spreads this is the total number of corners gained by the home team in a football match multiplied by the total number of corners gained by the away team. | |
| Cum | |
| Means including. Those good old public schoolboys that used to run the City dropped in the odd latin phrase just to confuse people. For instance cum dividend simply means the shares you buy entitle you to a dividend payment. | |
| Cum dividend | |
| Shares sold entitling the buyer to receive the next dividend. | |
| Cum rights | |
| A share bought together with the rights issue attached to it. | |
| Cum scrip | |
| A share bought together with the scrip issue attached to it. | |
| Currencies | |
| money in public circulation. | |
| Currency cross | |
| The exchange rate between two currencies. | |
| Current Assets | |
| Cash and the like that can be liquidated in one year. | |
| Current Liabilities | |
| Debts that need to be paid in the next year. | |
| Current Ratio | |
| Is a measure of short-term liquidity. It measures how easily or otherwise a company can pay its short-term (i.e. within one year) commitments. Current ratio = Current assets / Current liabilities As a rule of thumb, values between 1 and 2 are normal. But it all depends on the type of company in question. For example, companies operating in a high cash turnover business such as a supermarket can operate with a lower current ratio than a low turnover business such as an aeroplane manufacturer. |
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| Cut and reverse | |
| closing an existing position and opening a new position through one trade. For example, you can buy 20 Dec Lloyds and sell 30 Dec Lloyds, resulting in a sell 10 Dec Lloyds. Also called overclosure | |
| Cyclical stocks | |
| Stocks that rise and fall quickly in line with economic growth. | |
