Glossary

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A

Absolute return funds

Funds aiming to deliver returns in both rising and falling markets. Compared to traditional fund managers these funds have greater scope to use derivatives, short positions, and exotic securities.

Accredited derivatives advisers

Person employed by an ASX Market Participant who has been accredited to advise or make a recommendation to retail clients in relation to exchange traded options and warrants.

Accredited futures adviser

Person employed by an ASX Market Participant who has been accredited to advise or make a recommendation to retail clients in relation to ASX futures.

Actively managed

Where the fund manager has the discretion to select the securities in a fund and looks for opportunities to buy and sell to increase its performance.

Adjustment to options contracts

Made when certain events occur that may affect the underlying securities. Examples of adjustments include changing the number of shares per contract and/or the exercise price of options in the event of a new issue or a reorganisation of capital by the issuer of the underlying securities.

AGM

Annual meeting of shareholders required by law where directors inform shareholders of company performance and future prospects. Shareholders vote on board elections and significant company issues.

Algorithmic trading

Computerised, rule-based system responsible for executing orders to buy or sell a security.

All Ordinaries Accumulation Index

Measure of performance of securities in the All Ordinaries index taking into account income as well as share price movement. It assumes dividends are reinvested.

All Ordinaries Index (All Ords)

Capitalisation weighted index of performance of share prices of about 500 of the largest Australian companies. Established by ASX at 500 points in January 1980.

Allotment of shares

Allocation of shares in a company by the directors, following an application or offer to take up the shares. Decisions as to the persons to whom shares are allotted, and the number allotted to each, are at the discretion of the directors, subject to compliance with the Corporations Law.

American Depositary Receipts

Negotiable certificates that represent a non-U.S. company's publicly traded equity or debt. Depositary Receipts are legal, US. Securities that trade freely on a major exchange or in the over the counter (OTC) market in U.S. Dollars, pay dividends or interest in dollars, and settle, clear and transfer according to standard U.S. practices.

American exercise, American style

Type of option or warrant contract which allows the holder to exercise at any time up to and including the expiry date. Most equity options listed on ASX are American Style. See European exercise, European style.

AMV

Aggregate market value.

annual report

Financial report or statement issued by a publicly listed company to its shareholders. Contains a statement of financial performance, a statement of financial position, a statement of cash flow, as well as notice of the Annual General Meeting (AGM) and business resolutions to be discussed.

annual yield

Also known as dividend yield, it represents the dividend return from an investment. Calculated by dividing the dividend per share by the share price, converted to a percentage.

annualised return

Return or profit, expressed on an annual basis, that the writer of the option contract receives for buying the shares and writing that particular contract. See Buy and Write.

annuity

Series of identical fixed payments to be made for a specified number of years.

approved financial product

Financial Product approved under Section 8 of the ASX Settlement Operating Rules.

AQUA market

Market for the trading of products that can be quoted under the AQUA Rules. Products are third-party issued products that give investors exposure to an underlying asset or set of assets, but where the value of the assets is not under the control of the issuer. The value of the product is linked to the performance of the underlying assets rather than the financial performance of the issuer itself.

arbitrage

Simultaneous buying and selling of the same or equivalent securities in different but related markets. Purpose is usually to profit from price discrepancies.

articles of association

Formerly, the rules adopted by a company when it formed that governed the company's internal affairs and other matters affecting the shareholders and the company. These matters are now dealt with in the company constitution.

as-at-date

Date at which the relevant information is recorded.

assessed value payment

If you hold in the money deliverable warrants but do not exercise them before or at expiry you may be entitled to a cash payment, often called an 'Assessed Value Payment' (or AVP).

asset allocation

Proportion of total capital invested in the different asset classes.

asset backing

Net assets of a company (in $) / number of issued shares. For example: XYZ Ltd with $100,000 net assets and 10,000 shares issued has an Asset Backing of $10.00 per share.

assets

Probable future economic benefits obtained or controlled by an entity as a result of past transactions or events affecting the entity.

assignment

Random allocation by ASX Clear to a writer of an exchange traded option exercise obligation. This is carried out by ASX Clear Pty Limited.

associated company

One company may be associated with another company if certain types of arrangements exist between the two bodies. Companies may also be considered to be associated when one company has an equity interest in the other.

ASX (Australian Securities Exchange)

ASX is a multi-asset class, vertically integrated exchange group that functions as a market operator, clearing house and payments system facilitator. It oversees compliance with its operating rules, promotes standards of corporate governance among Australia’s listed companies and helps educate retail investors.

ASX Clear (Futures) or ASXCLF

The clearing facility and central counterparty (CCP) for futures and options in interest rate, equity, energy and commodity products that are traded on ASX Trade24. ASX Clear (Futures) also offers clearing services for certain OTC (over the counter) and block trading related transactions.

ASX code

Unique code used to identify listed companies.

ASX International Services Pty Ltd

Wholly owned subsidiary of the Australian Securities Exchange Limited that executes and settles sales and purchases of participating international securities on behalf of the broker.

ASX Settlement and Transfer Corporation (ASTC)

ASTC is now known as ASX Settlement Pty Limited. It is licensed as a Clearing and Settlement Facility under the Corporations Act.

ASX Settlement Pty Limited

ASX Settlement Pty Limited is licensed as a Clearing and Settlement Facility under the Corporations Act.

ASX Trade

Screen based trading system used for the trading of cash market equities, exchange traded options, interest rate securities and warrants. ASX Trade is a NASDAQ OMX ultra-low latency trading platform based on NASDAQ OMX's Genium INET system.

ASX Trade24

24 hour trading platform for products including including futures and options contracts listed over Treasury Bonds, bank bills, cash rates, S&P/ASX Equity Indices, energy and commodities as well as ASX Listed CFDs.

at-the-money

Option or warrant with an exercise price equal to the current market price of the underlying asset.

Australian Clearing House (ACH)

ACH is now known as ASX Clear Pty Limited.  It is a subsidiary of ASX which clears options and futures traded on ASX.

Australian financial services licence (AFSL)

Australian Financial Services Licence.

Australian Government Bond

Bonds issued by the Commonwealth Government which are direct, unconditional, unsubordinated and irrevocable obligations of the Australian Government.

Australian Government Bonds traded on ASX

The holder of an Australian Government Bond (CGB) traded on ASX has beneficial ownership of an Australian Government Bond in the form of a CHESS Depository Interest (CDI). The holder of an AGB traded on ASX obtains all the economic benefits (including payments) attached to legal ownership of the Australian Government Bond over which the CDI has been issued.

Australian Real Estate Investment Trusts (A-REITS)

Australian Real Estate investment Trusts (see REITs).

authorised capital

Amount of share capital which a company is permitted to issue. Also called nominal capital. See issued capital, uncalled capital, and paid up capital.

automatic exercise

Exercise by ASX Clear of an in the money option at expiry. Requires the client account to be pre-set to automatic exercise by the client's broker.

average daily volume

Typical trading activity for a day. Calculated by the annual volume divided by the total number of working days in that year.

aware

An entity becomes aware of information if a director or executive officer (in the case of a trust, a director or executive officer of the responsible entity or management company) has, or ought reasonably to have, come into possession of the information in the course of the performance of their duties as a director or executive officer of that entity.

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B

backwardation

Where futures market prices are progressively lower in the future delivery months than in the nearest delivery month. For instance, if the wool quotation for March is 480¢/kg and that for July is 450¢/kg then the backwardation for five months against March is 30¢/kg. Opposite of contango.

barriers/barrier level

Defined level that causes some event to occur in relation to a warrant. The disclosure document will provide details.

basis point

One per cent of one per cent (0.01%).

basis risk

Risk that movements in the price of an asset do not correlate exactly with movements in the price of the underlying financial instrument or commodity.

bear market

When prices are falling and further falls are expected.

bearish

View that prices will fall.

benchmark

A benchmark is a standard or measure that a fund manager uses to compare the performance of their fund to. This is typically an index, such as the S&P/ASX 200 Index which may be used as a benchmark for large-cap Australian shares.

beta

Measure of how changes in a share price correlate to overall movements in the share market as a whole.

bid

Price at which someone is prepared to buy shares Opposite to offer.

block trade

Off-market trading mechanism enabling market users to arrange and transact orders of significant size in specified contracts.

blue chip

Larger companies with a long history of profitability and stability.

board of directors

Elected body or persons formed to control the planning and implementation of corporate objectives.

bond

A tradeable debt security, usually issued by a government or semi-government body to raise money. Holders of the bond have lent money for which they receive a fixed rate of interest over a set period of time. The bond is repaid with interest on the predetermined maturity date. Bonds can be traded on the sharemarket.

bonus dividend

An extra dividend in addition to the normal dividend. See bonus share, bonus issue.

bonus share plan

Usually a plan whereby shareholders may elect to receive all or a portion of the dividend in shares instead of cash.

bonus share, bonus issue

Additional shares issued by the company to existing shareholders for free, usually in a pre-determined ratio to the number of shares already held.

books close date

Date at which a company's share-register is closed off to identify the shareholders and to calculate any entitlement to new issues and dividends.

borrowing costs

Interest and other costs incurred by an entity in connection with the borrowing of funds.

break

Sharp decline or a sharp rise in price, usually after a sustained period of little or no movement.

broker

Trader or trading company given responsibility for the acceptance and/or execution of an order.

brokerage

Fee paid to a stockbroking firm for buying or selling of shares.

bull market

When prices generally are rising and further rises are expected.

bullish

View that prices will rise.

business cycle

Also known as the economic cycle. The rise and fall of the economy, from a peak, or boom, to a trough and back to a peak.

business day

Monday to Friday inclusive, except New Year's Day, Good Friday, Easter Monday, Christmas Day, Boxing Day, and any other day that ASX declares is not a business day.

business rules

The ASX Market Rules govern the operations and behaviour of Market Participants of ASX and Affiliates. The Market Rules set out the requirements to become a Market Participant (commonly referred to as 'stockbroking organisations') and an Affiliate. The ASX Settlement Operating Rules govern the operation of CHESS, the electronic transfer and settlement system, and the CHESS sub-register.

buy and write

Strategy requiring the simultaneous purchase of underlying securities and the writing of call options over those securities representing the same number of those securities.

buy back

Offsetting purchase to "cover" or liquidate a short sale. Also refers to when a company repurchases existing shares to reduce the number of shares on issue.

buy on open

To buy at the beginning of a trading session at a price within the opening price range. 

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C

call

No Liability (N.L.) and sometimes Limited Liability (Ltd.) companies have shares that are not fully paid. A call may be made for the payment of part, or all, of this outstanding capital. Holders of shares in N.L. companies may choose not to pay the call and forfeit their shares, hence the name No Liability. Holders of shares in Limited Liability companies cannot forfeit the shares and are legally obliged to pay a call. See contributing share.

call option/warrant

Option / warrant contract which gives the holder the right, but not the obligation, to buy the underlying asset at the exercise price at or before a fixed expiry date.

cap

Defined level which limits the upside potential of an investment product.

capital gain

Difference between the proceeds from the sale of a security and the initial cost of the investment. If the proceeds exceed the cost this is said to be a capital gain.

capital gains tax

Tax on the profit from the sale of capital assets such as shares or property.

capital growth

Increase in the value of an asset such as an investment in shares.

capital loss

When the proceeds from the sale of a security are less than the cost of the investment.

capital protected warrants

Warrants where the issuer promises that the investor gets back at least a certain value set out by the issuer.

cash

Currency, coins, cheques, and balances in bank accounts - a current asset.

cash commodity

Actual physical asset underlying a futures contract. Sometimes called "spot commodity".

cash covered

Derivatives position, such as a written option contract, where the option writer meets their margin obligations with cash.

cash extraction

Strategy where investors apply with their shares to receive a similar amount of instalment warrants plus a cash payment. Not available to self-managed superannuation funds.

cash issues

New issue of shares for cash made to existing shareholders in proportion (e.g. 1 new share for every 2 shares held) to their existing shareholding for the purpose of raising additional capital for the company. It is usually issued at a discount to the market price.

cash market

The market for securities and physical commodities. Often referred to as the underlying market.

cash price

Price in the market place for actual cash or spot commodities to be delivered via customary market channels.

cash settled warrant

A warrant for which settlement obligations are met by payment of cash from issuer to holder, rather than the purchase or sale of an underlying asset.

cash settlement

Where settlement is completed by a cash payment rather than sale of an underlying asset.

CDIs CUFS and DIs

A CHESS Depository Interest (CDI) is a financial product quoted on the Australian Securities Exchange which confers a beneficial interest in the foreign financial product to which it relates.  CDIs are a type of depository receipt.  There are two types of CDIs, CHESS Units of Foreign Securities (CUFS); and Depository Interests (DIs).

Centre Point

ASX trade matching facility for anonymous execution at the prevailing midpoint of the best bid and offer in ASX TradeMatch.

certificated sub-register

That part of an Issuer's register for a class of its securities that is administered by the Issuer and records legal title to securities through a paper certificate in that class. Note: The register may be of shares, options or other securities.

charting

See technical analysis.

CHESS

ASX's Clearing House Electronic Sub-Register System which is ASX's settlement system and central register for electronic transfer of share ownership and associated cash payments.

CHESS sub-register

That part of an Issuer's register for a class of Approved Financial Products that is administered by ASX Settlement and records legal title to Financial Products  through uncertificated holdings in that class. Note: The register may be of shares, options, managed investments or other financial products that are Approved Financial Products under the ASX Settlement Operating Rules.

class

Securities are in the same class only if the same rights and obligations attach to them. Differences arising from the requirements of the listing rules relating to restricted securities are to be ignored. Example: Partly paid securities are in a different class to fully paid securities. Fully paid securities that rank equally except for the next dividend or distribution are in the same class (but may be traded separately until they merge with the other shares in the class). Fully paid ordinary securities classified as restricted securities are in the same class as fully paid ordinary securities that are not classified as restricted securities.

class of options

Option contracts of the same type - either call options or put options - covering the same underlying instrument/underlying security.

classified asset

Asset of a kind referred to in paragraph (a) of the definition of restricted securities in ASX Listing Rules.

clearing

The process of matching, registering and guaranteeing transactions. 

clearing account

Either an accumulation account (a holder record maintained in CHESS by a broker to facilitate settlement of CHESS approved securities with clients who are not participants) or a settlement account (a holder record maintained in CHESS by a participant non-broker to facilitate settlement of CHESS approved securities with other participants).

clearing house

Either ASX Clear or ASX Clear (Futures) depending on the instrument.

clearing participant

Participant of ASX Clear to whom fulfilment of all contracts, registered in their own names, is guaranteed.

closed end fund

Fund that has a fixed number of shares or units on issue.

closing out

To liquidate a position by taking an equal and opposite position, e.g. a trader who has bought a futures contract, would close out, or get out of the contract, by taking out a contract to sell.

closing purchase

Trade that liquidates an investor's written position.

commission

Fee that an advisor or a fund manager may receive for the buying or selling of securities.

company name

Complete name of listed company, as reported to the Australian Securities Exchange.

company options (exchange traded options)

Right to take up certain securities on specified terms within or at a specified time.

company secretary

Person required to be appointed under the Corporations Law and usually having the responsibility for all the record-keeping within the company.

confirmation

Written document confirming a transaction between two dealers or a broker and a client which details the costs, type and quantity of shares traded. Also known as a 'Contract note'.

conservative

Style of investing that seeks to achieve stable returns.

contango

Situation in which futures market prices are progressively higher in the future delivery months than in the nearest delivery month. Contango is the opposite of backwardation.

contract interest

Contract interest is paid daily by holders of long positions and received daily by holders of short positions in ASX CFDs. The Contract Interest Rate is fixed to the target overnight cash rate as determined by the Reserve Bank of Australia.

contract month

Month in which delivery or cash settlement is to be made in accordance with a futures, options or warrant contract.

contract multiplier

Number used to determine the dollar value of an index future, option, warrant or CFD contract.

contract note

Written document confirming a transaction between two dealers or a broker and a client which details the costs, type and quantity of shares traded. Also known as a 'Confirmation'.

contract size

The number or quantity of the underlying represented by a futures, options or warrant contract.

contract unit

Amount of the underlying asset to which the contract refers.

contract value

Value or worth of a contract at the time of making that contract.

contracts for difference (CFD)

Leveraged instruments that enable you to gain exposure to shares, indices and commodities. Traders can take positions on both rising and falling markets. Profits and losses are magnified. Both long and short positions are exposed to potential margin calls.

contributing share

Shares that have been partly paid for. At a future date the shareholder will be required to pay the balance outstanding, unless the company is a no liability company in which case shares can be forfeited instead.

controller

Person who, in ASX's opinion, has a substantial interest in the equity of the holder of, or a substantial economic interest in, restricted securities and each intermediate entity through which that interest occurs.

convergence

Process whereby the price of a derivative contract aligns with the price of the underlying financial instrument or commodity. This usually occurs at maturity.

conversion ratio

Number of warrants that must be exercised to require the transfer of the underlying instrument.

convertible debt security

Unsecured note or debenture that is classified as an equity security because it is convertible into an equity security.

convertible note

Loan made to a company at a fixed rate of interest with the right to be either redeemed (i.e. repaid by the company) for cash or converted into ordinary shares at a predetermined date or within a certain period.

convertible securities

Bond or other debt instrument that can be exchanged for shares of the issuer.

corporate action

Action taken by an entity for the purpose of giving an Entitlement to Holders of a class of the entity's securities. Examples of corporate actions include rights issues, bonus issues, dividends or other payments, or offers under a buy- back scheme.

corporation

A corporation includes all bodies corporate and certain types of unincorporated bodies, but excludes certain corporate bodies.

corporations law

A national scheme of legislation dealing with the regulation of companies and the securities and futures industries.

cost of carry

Cost factored into the pricing of derivatives instruments (excluding CFDs). It reflects the cost of holding the underlying over the life of the contract, less the amount that the contract holder would receive in income from the underlying, such as dividends, during this time.

coupon

Interest payment paid at regular intervals by the issuer to owners of Interest Rate Securities.

coupon rate

The income a bond pays expressed as a percentage of its face value.

cover

To cancel a short position in an asset by the purchase of an equal quantity of the same asset. Also known as short covering.

covered warrant

Warrant issuer places the securities of an underlying warrant in a trust or other custodial arrangement. See also fully covered warrant.

crossed trade

Where both the buy and sell parties (unrelated entities) are from the same market participant.

cum (general)

Meaning "with". Cum dividend means that shares are being traded with the current dividend attached and thus the buyer rather than the seller receives the dividend declared. Cum-Rights Shares quoted "cum-rights" entitle the buyer to participate in a New Issue of shares then current.

cum-dividend

Cum means 'with'. Shares quoted cum dividend entitle the buyer to the current dividend. The price of the shares will usually reflect the amount of the dividend. Similarly, shares 'cum rights' entitle the buyer to participate in the new issue of shares. The opposite is ex-dividend.

cumulative preference dividends

Dividends on preference shares that accrue as a commitment of the company if they are not paid in any year. Arrears of cumulative preference dividends must be paid before any dividends are paid to ordinary shareholders. Unless specifically stated to be non-cumulative, dividends on all preference shares are deemed to be cumulative.

currency warrants

Give holders exposure to movements in two different currency exchange rates.

current assets

Cash or other assets of the entity that would in the ordinary course of operations of the entity be consumed or converted into cash within twelve months after the end of the last financial year of the entity.

current delivery (month)

The derivatives contract which matures and becomes deliverable during the present month; also called the spot month.

current liabilities

Obligations that are expected or could be required to be discharged on demand or within twelve months. In a company's annual report, this figure shows the amount of debt due to be repaid within twelve months.

current ratio

A measure of liquidity that shows a company's ability to pay its short-term debts. <br>Current Ratio = (Current assets / Current liabilities) = number of times covered

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D

daily settlement price

The official daily quotation for each option contract available for each delivery or cash settlement month as determined by the Exchange for the purpose of margining by the Clearing House.

day orders

Orders which automatically expire at the close of the day's trading if not filled during the day on which they are received.

DCS

ASX Clear operates the Derivatives Clearing System (DCS) to clear and settle equity-related derivative products.

debenture

Loan to a company at a fixed rate of interest and for a fixed term, usually one to five years. The debenture is secured by a trust deed over an asset, or assets, of a company.

debt funding/finance

Process of financing through issuing debentures or bonds; or increasing other liabilities to finance operations. Alternative to equity funding.

debt security

As defined in the Listing rules.

debt to equity ratio

Relationship between funds provided by borrowing and funds provided by shareholders. The debt to equity ratio shows to what extent a company is financed by debt (also called the gearing or leverage ratio).

Debt to equity ratio = (total debt / shareholder equity) x 100

deferred delivery

Shares quoted "dd" are the result of a reconstruction of the company's share capital where shareholders have surrendered old scrip to the company but the company has yet to issue new scrip. Shareholders who wish to sell must do so on a "dd" basis so buyers know that they cannot yet expect delivery of scrip.

deferred settlement

Settlement in which the obligation to settle on a trade date plus two (2) business days (T+2) basis is deferred until the time following the despatch date that ASX fixes.

delisted

When a company is removed from the Official List and its shares are no longer quoted.

deliver not enforceable

Securities quoted as "del" are the result of a new issue for which CHESS statements have not yet been issued.

deliverable types

The actual types or grades of the underlying asset which may be delivered in settlement of a futures contract for which the underlying is a commodity.

deliverable warrant

Settlement of a warrant by transfer of the underlying asset rather than by payment of cash.

delivery

The tender and receipt of the underlying physical asset, or warehouse receipts covering such commodity, in settlement of a futures contract.

delivery month

Specified month during which actual delivery of the physical asset may be made under the terms of a futures contract.

delta

Measure of the sensitivity of an option or warrant price to movement in the price of the underlying asset.

derivative

Instrument that derives its value from an underlying instrument (such as shares, share price indices, fixed interest securities, commodities, currencies etc). General usage includes futures, exchange-traded options, contracts for difference and warrants. Often involves leverage. Corporations Act characterisation may differ from general usage for example some warrants are not classified as derivatives under the Corporations Act.

direct market access (DMA)

Where a Market Participant gives their clients the ability to submit orders to the Participant, which then routes the orders through its internal systems and controls and onto the trading platform.

directors

Persons elected by shareholders who are responsible for the implementation of corporate objectives.

discount

When a derivative is trading at a price less than its fair value. With futures, sometimes used to refer to the price differences between futures of different delivery months, as in the phrase "July at the discount to May", indicating that the price of the July future is lower than that of May.

discretionary account

An investment account for which an authorised adviser makes investment decisions on behalf of the client in accordance with the adviser's authority.

distribution

Payment to unit holders of a fund out of the profits of the fund. These are allocated on a per unit basis.

diversification

Spreading investments over a variety of investment categories with different performance characteristics, in order to reduce risk.

diversified portfolio

Portfolio that holds a variety of assets with different performance characteristics.

dividend

Distribution by a company to shareholders. Usually expressed as a number of cents per share.  Many ASX listed companies (see listed company) pay dividends twice each year, usually as a smaller 'interim' dividend and a larger 'final' dividend.

dividend amount

Dividend shown as cents per share. For example a figure of 19 represents $0.19 and a figure of 7.5 represents $0.075.

dividend cover

Ratio showing the number of times a company's dividend is covered by its net profit.

Dividend Cover ratio = (net profit / dividend paid)

dividend imputation

Tax credits passed on to a shareholder who receives a franked dividend. Imputation credits entitle investors to a rebate for tax already paid by an Australian company.

dividend in arrears

Dividends on cumulative preference shares that have not been declared each period in accordance with the terms of their issue. See cumulative preference dividends.

dividend income

See dividend.

dividend or distribution plan

Plan which gives holders of securities the opportunity to accept securities in place of dividend, distribution or interest payments (either partly or wholly). Also called a 'Dividend Reinvestment Plan'.

Dividend Reinvestment Plan (DRP)

An alternative to cash dividends, allowing shareholders to receive new shares instead of cash.

dividend type

Either interim or final. The last dividend in the company's financial year is classified as final and all others are classified as interim. Some dividends may also be classified as 'special' in accordance with the advice given by the company about the dividend. Ordinarily the term 'special' is used to indicate that the dividend is not one that is paid regularly each year but the term may be used differently by different companies.

dividend yield

Dividend shown as a percentage of the last sale price of securities.

dps adjusted

Total dividend, in cents per share, for the year, adjusted by a dilution factor to take account of issues and reconstructions.

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E

earnings

Income or profit of an entity. May be expressed as gross or net.

Earnings Per Share (EPS)

Measures of earnings attributed to each equivalent ordinary share over a twelve month period. Calculated by dividing the company's earnings by the number of shares on issue in accordance with AASB 1027 'Earnings per share'.

electronic holding statement

Evidence of securities ownership in the form of a holding statement. All security holdings on ASX are registered electronically.

employee incentive scheme

For the purposes of ASX Listing Rules, a scheme for the issue or acquisition of equity securities in the entity to be held by, or for the benefit of, participating employees or non-executive directors of the entity or a related entity.

entry fee

Fee set by the fund manager for buying units in a managed investment expressed as a percentage of the amount invested. The fee is deducted from the amount invested by the fund manager.

equities

Often used as a synonym for shares. Represents part-ownership of a company, as distinct from debt securities such as bonds and debentures.

equity capital or equity funding

Capital raised by a company by issuing shares. An alternative to debt funding.

equity securities

For the purposes of ASX Listing Rules:

1. shares in a body corporate or an unincorporated body other than redeemable preference shares which are Loan Securities in accordance with paragraph; (c)of the definition of Loan Securities

2. prescribed interests except those referred to in paragraph (d) of the definition of Loan Securities

3. renounceable and non-renounceable rights to subscribe for Securities other than Loan Securities

4. options over unissued Securities other than Loan Securities

5. convertible notes

6. any Securities which are determined by the Exchange to be Equity Securities, but does not include option contracts or Securities determined to be Loan Securities by the Exchange.

equity warrants

Warrants for which the underlying asset is a security (for example, shares in companies).

escrow

Depositing an instrument of title to securities with a third party custodian in order to prevent the holder from transferring those securities during a period agreed.

European exercise, European style

Where the holder of an option or warrant can exercise their right to buy or to sell only on the expiry date.

ex rights

Securities entitling the seller to retain the right to participate in a New Issue then current.

ex-bonus, ex-bonus date

Where the seller retains the bonus shares being issued. The ex bonus date occurs two business days prior to and including the Record Date.

The share price may fall on the ex bonus date to reflect the dilution effect as the company's assets are spread over a greater number of shares on issue.

exchange for physical

The exchange of a physical holding in the underlying to a futures or CFD position or the exchange of a futures or CFD position for a physical holding in the underlying.  EFPs are not always transacted at market and therefore do not have to be traded within the current market bid and offer. They are omitted from the calculation of first, high, low and last prices.

Exchange Traded Commodity (ETC)

ETFs that invest in and track the performance of a commodity such as silver or gold rather than an equity index and which allows for applications and redemptions in the primary market on a daily basis either in -specie or in cash.

Exchange Traded Fund (ETF)

Open-ended investment fund designed to typically track the performance of an asset such as a share price index and which allows for applications and redemptions in the primary market on a daily basis either in -specie or in cash.

Exchange Traded Options (ETO)

Option contracts where counterparties are novated with ASX Clear interposed between taker and writer and which are bought and sold on the options market operated by ASX.

ex-date

Date on which shares change from being quoted "cum" to "ex". It is usually the business day prior to the record date.

ex-dividend

Shares which, when sold, entitle the seller to retain the current dividend. Shares are usually quoted ex-dividend one business day before company's Record Date.

ex-dividend date

One business day before the company's Record Date. To be entitled to a dividend a shareholder must have purchased shares before the ex-dividend date.

exercise

Notification by the buyer (taker) of an option or warrant of their decision to buy or sell the underlying asset or in the case of cash settled contracts to receive a cash payment.

exercise price

Price at which the taker (buyer) of an option or warrant may buy/sell the underlying asset. Also known as the strike price.

exit fee

Fee set by a fund manager for selling units in a managed investment expressed as a percentage of the amount invested. The fee is deducted from the amount invested by the fund manager.

exotic instruments

More complex instruments which may involve one or a number of unusual features.

expiry, expiry date, expiration

Date on which all unexercised options, warrants in a particular series or futures in a particular expiry month expire.

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F

face value

Amount at which securities or debt instruments are issued. In relation to bonds and other debt instruments it also refers to the value at maturity.

fair value

Current value of the underlying shares or index, plus an amount referred to as the 'cost of carry'. An estimate of the price an option should sell at in an efficient market.

fidelity fund

Fund available in limited circumstances for clients who have suffered a loss because of a defalcation or fraudulent misuse of money or other property by the broker. Funds are not available to compensate for trading losses.

final payment (loan amount)

Usually the second payment amount outstanding for an Instalment, which must be paid to take delivery of the underlying asset. May also be referred to as the exercise price.

Financial Institutions Duty (FID)

Financial Institutions Duty.

first payment

Initial payment (capital plus interest and fees) to purchase the shares via an Instalment Warrant.

fixed interest

Security for which the return when held to maturity is fixed. Fixed interest securities normally receive periodic interest payments and repayment of principal at maturity.

float

Initial capital raising by public subscription to an offering of securities.

forward agreement

Contract to exchange a particular good or financial instrument at a set price on a future date.

franked dividend

Dividend paid by a company out of profits on which the company has already paid tax. The investor is entitled to an imputation credit, or reduction in the amount of income tax that must be paid, up to the amount of tax already paid by the company.

franking rate

Tax rate at which the dividend is franked.

fully covered warrant

Warrant series for which the warrant issuer has placed the underlying shares in a trust or cover arrangement.

fund manager

Individual or organisation in charge of investing funds on behalf of a financial institution.

fundamental analysis

Method of analysis using ratios and percentages calculated from financial data of a company to assess the company's quantitative and qualitative aspects.

futures / futures contract

An agreement to buy or sell an asset or cash equivalent at a date in the future at a price agreed today. The contracts are traded on a futures market. The contract is then novated with a clearing house interposed between buyer and seller.

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G

gearing

See leverage

Global Industry Classification Standard (GICS)

Set of global sector and industry definitions. See Standard & Poors.

government bond

Debt security issued by the government.

GST

Goods and Services Tax.

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H

hedge

Transaction which partly or totally offsets the risk of a current holding.

hedge funds

See absolute return funds.    

historic volatility

Annualised standard deviation of daily changes in the price of the asset underlying a futures, options or warrant contract.

holder identification number (HIN)

Number identifying registration on the CHESS subregister.

holding lock

Facility that prevents securities from being deducted from, or entered into, a holding pursuant to a Transfer or Conversion.

HOT or High yield instalments

Instalments containing a high gearing level (usually between 70% to 110%).

hybrid ETFs

Exchange Traded Fund (ETF) that can either be based on an index or be actively managed.

hybrids

Preference share which is a type of interest rate security.

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I

imputation credits

Tax credits passed on to a shareholder who receives a franked dividend.

index (indices)

A measure of a change in value for a group of assets.

index arbitrage

Where a trader tries to profit from pricing discrepancies, between an index based derivative a related index product or the shares comprising the index.

index futures

Futures contract which has as its underlying asset an index, typically a share price index.

index LEPOs

European call option over a share price index with a 1 point strike price.

index options

Options over a share price index. Index options are European style and cash settled on exercise.

index warrants

Warrants over a share price index. Index warrants are European style and cash settled on exercise.

infrastructure fund

Managed investment that invests in infrastructure assets, such as transport, telecommunications, materials handling and utilities.

initial margin

Minimum deposit determined by the Clearing House on all futures contracts and exchange traded options and exchange traded CFDs. This margin must be paid by the Clearing Participant to the Clearing House. The client must pay the Clearing Participant.

instalment warrants/instalments

Warrants give holders the right to buy the underlying shares or instrument by payment of several instalments (usually two) during the life of the warrant. The Final payment is usually between 40% and 60% of the price of the underlying instrument at the time of issue. Instalment warrants are often covered warrants with the underlying asset being held in trust / custody for the benefit of the holder. A common feature of instalment warrants is that the holder is entitled to any dividends or distributions and possibly franking credits paid by the underlying asset during the life of the warrant. An interest component is usually part of the payments due.

interest cover

Ratio showing the number of times interest payments are covered by earnings before interest and tax (EBIT). The higher the interest cover, the greater the company's ability to meet interest payments. 

Interest Cover = Earnings Before Interest and Tax (EBIT) / Net Interest Payments = number of times covered.

interest rate security

Security that pays a fixed or floating rate of return. The issuer usually promises to pay a specified rate of interest per annum over the life of the security and to repay the principal at maturity.

interim dividend

When a dividend is paid more than once a year, dividends other than the final one are called interim dividends. Typically, dividends are paid twice a year, one interim and one final dividend.

in-the-money

Call (put) option or warrant with an exercise price below (above) the current market price of the underlying asset.

intrinsic value

Difference between the current market price of the underlying asset and the exercise price of the option or warrant, but not less than zero. For warrants, the conversion ratio needs to be taken into account.

investment

Asset acquired for the purpose of producing income and/or capital gains for its owner.

issue date

Date by which an Issuer must have entered Financial Products into holders' uncertificated holdings. Generally would result from corporate actions such as dividend reinvestment plans, rights issues, share buy backs, share purchase plans and initial public offerings (IPOs).

issued capital

Value of securities allotted in a company to its shareholders and debt holders.

issued shares

Shares of a company that have been allotted to shareholders.

issuer sponsored sub-register

Register of shares managed by the listed entity itself for the registration of shares in their company alone.

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L

leverage

The extent to which an investor or business is using borrowed money.

LICs

Listed Investment Companies.

limit

Price limit for an order, e.g. a bid of $3.00 means that the buyer is not willing to pay more than $3.00 for the security.

limit order

Instruction to a broker to buy or sell a security at a specified price or better.

limited liability company

Company whose members have liability limited by shares or guarantee. In the case of the former, liability is limited to the amounts unpaid on the shares, in the case of the latter by the amount undertaken to be contributed in the event of a winding up of the company.

liquid assets

Assets that can be bought or sold easily and with little impact on price.

liquid market

Where buying and selling can be accomplished with ease and with little impact on price because of sufficient volume on offer.

liquidity

Measure of the ability to buy or sell assets easily and with little impact on price.

listed company

Company which has agreed to abide by ASX Listing Rules so that its securities can be bought and sold on ASX.

listing rules

Rules governing the procedures and behaviour of all entities listed on ASX.

long

Trader who has bought or who holds a position that will benefit from rising prices.

lot

Unit of trading equivalent to one futures contract. 

low exercise price options (LEPOs)

European style options with a strike price of 1 cent, in the case of stock LEPOs, or 1 point, in the case of index LEPOs.

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M

managed investments

Professionally managed portfolio of assets.

Management Expense Ratio (MER)

Fee paid to the manager of an investment fund. The MER is normally expressed as an annual percentage or "basis point" charge (where one basis point equals one hundredth of a percent) on the fund's net asset value.

mandatory settlement

Process whereby cash options or futures contracts still open at expiry are closed out by mandatory cash settlement.

margin

Amount calculated by the clearing house as necessary to cover the risk of financial loss on options contracts, futures contract and CFDs.

margin call

Professionally managed portfolio of assets.

margin interval

Probable maximum one day move in the underlying asset as calculated by the clearing house. Expressed as a percentage, and used in the calculation of margins for options and futures.

market announcements office

The office designated by ASX to process company announcements for release to the market.

market capitalisation

Total number of shares on issue multiplied by their market price. This can be applied to work out the market value of one company or of the value of all companies listed on the exchange.

market order

Order to a broker to buy or sell at the current market price at the time the order is given.

market participants

Prevailing price of shares traded on ASX. May be the last price at which the shares traded, or the most recent price offered or bid for the shares.

market price

Prevailing price of shares traded on ASX. May be the last price at which the shares traded, or the most recent price offered or bid for the shares.

market risk

Risk of a general decline in the market.

maturity

When the term of a contract or agreement finishes. May involve cash or physical settlement.

memorandum of association

Part of a company's constitution, the formal document subscribed by those wishing to form a company and giving details of the company, e.g. its name, objects and particulars of capital.

merger

When two or more companies combine either by takeover or creation of a new entity.

MINIs

Highly leveraged share-tracking warrants providing exposure movement in the price of an underlying asset on a one to one basis for a fraction of its price. They can be considered as a CFD - style product with an embedded stop loss feature.

mortgage

A charge over property given by the owner (borrower/mortgagor) to a lender (mortgagee) to secure repayment of a loan or to ensure satisfaction of a debt.

mutual fund

American term to describe a managed investment.

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N

National Guarantee Fund (NGF)

The NGF is a compensation fund available to meet certain types of claims arising from dealings with Participants of ASX and, in limited circumstances, Participants of ASX Clear.

Net Asset Value (NAV)

Book value of a company's assets divided by the number of shares on issue.

net position

Difference between the open derivatives contracts held long and the open derivatives contracts held short in any one contract. 

Net Tangible Assets (NTA)

Calculated as the total assets of a company, minus intangible assets such as goodwill and less all liabilities.

new

When recently issued shares do not rank equally with existing shares in terms of dividends.

no liability company

Mining company not entitled to calls on the unpaid issue price of shares. Such companies are denoted N.L.

non-renounceable rights

Rights offer that may only be taken up or forfeited, and cannot be traded on the market.

novation

Process undertaken by the clearing house whereby it substitutes itself between the buyer and the seller of a trade, acting as the ‘middleman’ to guarantee the obligations of each party. 

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O

off market transfer

The transfer of shares between parties without going through the market place. Off-market transfers are executed through the use of an "Australian Standard Transfer Form".

offer

Price at which someone is prepared to sell securities. (opposite of bid). 

offer period

"In relation to a takeover bid, the period for which offers under the bid remain open; or in relation to a Scheme, the period from the date an announcement of intention to propose a Scheme is first received by the Exchange until the date on which the Scheme is effected".

official list

Names of securities permitted quotation and so, trading on ASX. Referred to in the Listing Rules as the Official list.

open ended fund

Managed investment where there is no restriction on the number of units in the fund that will be issued. ETFs are open ended funds.

open interest / open position

Number of contracts outstanding or 'open' in a particular class or series of options or futures.

opening price (or range)

Price (or price range) recorded during the period when an instrument commences trading. 

option

Contract between two parties giving the taker (buyer) the right, but not the obligation, to buy or sell a pre-existing underlying asset at a particular price on or before a particular date.

ordinary share

The most commonly traded security in Australia. Holders of ordinary shares are part-owners of a company and may receive payments in cash, called dividends, if the company trades profitably. They have no preferential rights as to either dividends out of profits or capital on a winding up.

OS

Trading condition code. See overseas trade. 

OSXT

Combination of two trading condition codes, OS and XT.  One market participant buying / selling outside Australian market hours. 

out-of-the-money

Call (put) option or warrant for which the current market price of the underlying asset is below (above) the exercise price.

overseas home exchange

Defined in the Listing Rules as the place of an entity's primary listing. 

overseas trade

A trade consummated in a foreign country outside of Australian market hours by a resident of that country through an approved exchange during their open hours. 

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P

paid-up capital

Amount paid by shareholders or recorded as paid on issued shares.

parent company or entity

Controlling company or entity.

pari passu

On an equal footing, or proportionately. A term frequently used with respect to share issues to indicate that the new shares being issued will rank equally in all respects with previously issued shares either immediately or at some specified time in the near future.

participating dividend

Dividend paid to preference shareholders in addition to the normal preference dividends payable.

participating preference shares

Share with a claim to profits ahead of ordinary shares. These shares may also have access to any additional dividends to be paid after ordinary shareholders have received theirs.

partly paid shares

"Shares which have been issued with only part of their value paid, for example shares may be issued with a par value of $1.00, of which only 50 cents has been paid, with a further 50 cents still owing. 

Also known as Contributing Shares."

percentage franked

Dividend paid by a company out of profits on which the company has already paid tax. The shareholder is entitled to an imputation credit, or reduction in the amount of income tax that must be paid, up to the amount of tax already paid by the company. The % figure represents the % of tax already paid by the company. Sometimes the percentage franked is also referred to in company announcements as a franked amount or imputed credit.

physical market

Underlying market on which the derivative is based. For example, shares, equity indices, interest rate, physical commodities and currencies.

placement

Allotment of shares, debentures, etc. made directly from the company to investors.

preference shares

Shares that rank before ordinary shares in the event of liquidation.

premium (option)

Amount payable by the taker of the option to the writer of the option on buying the option.

premium margin

"Current market value of an exchange traded option based on the previous day's closing market price and represents the current cost of liquidating the position."

price range for day or week

Highest and lowest price at which an instrument has traded over the course of a day or week.

Price-Earnings Ratio (PE)

"The number of times the price covers the earnings per security over a twelve month period. Investors commonly use this ratio to measure the attractiveness of particular shares and to compare shares in one company with those in another."

private equity fund

Investment fund not available to the general public that often makes concentrated investments directly into companies.

pro rata issue

Issue offered to all holders of securities in a class on a pro rata basis.

promissory note

An unconditional written promise to pay a specified sum of money on demand or at a specified date.

property trusts

Trusts that enable investors to purchase an interest in a diversified portfolio of real estate assets. Investors in property trusts gain exposure to the value of the real estate the trust owns, and receive rental income through distributions the trust pays to investors.

proxy

Written authorisation given by one person to another so that the second person can act in place of the first person, e.g. attending and voting at shareholders' meetings. The person authorised to act is also known as the proxy.

put option / warrant

Option / warrant contract giving the holder the right, but not the obligation, to sell the underlying asset at the exercise price.

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Q

quotation

Securities in a listed entity are quoted on ASX for trading. Defined in the Listing Rules as Official Quotation.

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R

Real Estate Investment Trusts (REITs)

Trusts providing exposure to the value and rental income from properties owned by the trust.

receiver

Person appointed either by a court or by an individual under a power contained in a statute, or an instrument, to investigate the affairs of a company which has run into financial difficulties.

recognised trustee

Under the ASX Settlement Operating Rules a trustee company within the meaning of State or Territory Trustee Companies legislation or a Public Trustee of a State or Territory.

reconstruction

An alteration to the issued capital of a company. Includes share splits, consolidations, capital reductions (partial repayments) schemes of arrangement and name changes.

record date

The date used in determining who is entitled to a dividend or other entitlement associated with a security. Those on the register on the record date are eligible for the entitlement. To allow for settlement of trades, ex-dividend dates and other ex-entitlement dates are usually set to one business day prior to the record date.

redeemable preference shares

Shares issued on the terms that they may be redeemed by the company at a later date, either by payment out of profits which would otherwise be available for dividends or out of proceeds of a fresh issue of shares.

redemption

Paying off or cancelling of a debt.

related company

Company which controls or is controlled by another company via ownership of subsidiaries.

renounceable rights

Issue of rights where the offeree can choose to take up the rights offered, let them lapse, or trade them on the market. See also rights issue.

rental income

Income received from an asset that a property trust owns which is then distributed to unit holders.

reset date

In relation to Rolling Instalments, the Reset Date is the date upon which the Final Payment for the Loan Amount is reset for the next period.

restricted securities

Defined in the Listing Rules as certain types of securities which during the escrow period restrict the holder from disposing of the restricted securities, creating any security interest in them or doing, or omitting to do, any act which would have the effect of transferring effective ownership or control of the restricted securities.

return, return on investment

Earnings from investments over a given period - usually expressed as a percentage per year of the amount invested.

revenue

Revenue is defined as the company's actual value normalised to reflect the default currency and corporate actions (e.g. stock splits).  Revenue (or Sales) is a corporation's net revenue, generally derived from core business activities.  For non-financial companies, the calculation of net revenue (or net turnover) in most markets generally involves subtracting transportation and related operational costs from gross revenue/sales.  

Revenue recognition practices vary significantly from market to market, though generally the recording of revenue is based upon sale invoices issued (or anticipated for forecast purposes) during the accounting period.

reweighting, rebalancing

Changing the proportion of the total portfolio which each investment represents.

rights issue

Privilege granted to shareholders to buy new shares in the same company.

risk

Chance or probability that an investment will result in a loss to an investor. Can also be referred to as the level of volatility returns attached to a particular investment.

risk margin

Margin for futures and exchange traded options required to cover the likely one or two day probable worst case movement against the position.

roll

Close out one position and at the same time open another over the same underlying asset with a later expiry date.

rolling instalments

"Type of instalment, having a longer life (up to 10 years) with a periodic reset date (usually yearly).

On the reset date, the issuer may adjust the exercise price (often called the 'Loan Amount' of the Instalment) with the objective of maintaining a desired gearing level."

routine transaction statement

Statement sent by the Issuer outlining all investor's transactions in that security.

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S

S&P ASX 200

Investable benchmark for the Australian equity market. The S&P/ASX 200 is comprised of the S&P/ASX 100 plus an additional 100 stocks.

secondary market

Trading on market after the primary issue.

Securities Exchanges Guarantee Corporation (SEGC)

Trustee of the National Guarantee Fund (NGF).

security reference number (SRN)

Allocated by an issuer to identify a holder on an issuer sponsored or certificated subregister.

sell a contract

Enter into a futures contract to sell a specified underlying asset at a future date. 

series

All option contracts of the same class having the same expiry date. See expiry, expiry date, expiration and the same exercise price.

settlement day

The day in which cash settlement or delivery resulting from expired futures or options contracts is conducted. 

settlement month

The calendar month in which the last day that the contract can be traded falls.

share capital

Company's issued and paid-up capital.

share certificate

"Also known as a scrip. A document with an identifying number that states that the person is a registered holder of a number of securities. Replaced by electronic holding statement in January 1999."

share indices

Measure of movement in the price of a nominated group of shares.

share registry

Organisation which, on behalf of a company, records changes in share ownership, issues share holding statements and makes adjustments for dividend payments, bonus and rights issues.

shares

Part-ownership in a company.

short

Trader who has sold or who holds a position that will benefit from falling prices.

short selling

Where an investor or fund manager borrows a security and subsequently sells the security with an obligation to purchase back the security and return it at a later date.

Single Traded Auction Price (STAP)

"The single traded auction price methodology: The STAP algorithm matches at a single price the most trades possible. Accordingly there is only one traded price each day. The indicative STAP price is visible to all during the market pre-open period."

SPAN

SPAN = Standard Portfolio Analysis of Risk. SPAN is the margin calculation engine used by ASX Clear and ASX Clear (Futures) to calculate margins.

special transaction statement

Defined in the Listing Rules as a statement of transactions in a security holder's account issued by the entity at the request of the holder.

specific cover

CHESS Securities lodged as collateral to cover call options written over those specific CHESS securities. For example 1,000 BHP shares lodged to cover one written BHP call option.

split

Share split or stock split involves the increase of the total number of shares outstanding, accompanied by a proportionate decrease in the price of each share.  The aggregate value of the shares on issue remains the same.

split holder

Splitting shares into units of lesser value.

spot month

Nearest expiry month to the present.

stapled security

Security where investors are purchasing both a trust and a related company through one security. This structure binds the investment portfolio together with a related business that may include a funds management company and/or property development company.

STIR

Short Term Interest Rate.

stock

Equities or shares. Can also be used to describe inventories held by a business.

stock exchange

A market on which securities are bought and sold.

stop loss

Predetermined sell (buy) order at a price below (above) the current price intended to minimise losses in event of further falls (rises).

strike price

See exercise price.

subscribers

Initial purchasers in the primary issue.

subsidiary

Company controlled by another company. The subsidiary company is an entity in its own right and pays its own tax.

substantial shareholder

Person/company holding more than 5% of a company's voting rights.

SYCOM

Sydney Computerised Market (SYCOM) is the previous name for the automated dealing system used to trade futures and ASX Listed CFDs. Now called ASX Trade24.

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T

tailor made combination

The extent to which an investor or business is using borrowed money.

takeover

Acquisition of a controlling interest in a company through the purchase of shares.

taker

Buyer of an option contract.

technical analysis

Method used to identify investment opportunities through the study of price action. A chart representing past price movements is the principle tool used to identify trends on which analysts can base their future predictions.

terms of the scheme

As defined in the Listing Rules, it includes terms, conditions, rules, regulations or guidelines formulated to introduce or administer an employee incentive scheme.

tick

Smallest allowed movement in price.

time value

Amount by which an option premium exceeds intrinsic value.

trading halt

Defined in the Listing Rules as an interruption to trading at the request of an entity that is not a suspension from quotation.

trust deed

Lays down the rules for a Trust, its investment guidelines and how benefits will accrue to beneficiaries and account holders.

trustee securities

Securities that meet the legal requirements of relating to the use of funds by trustees.

trusts, unit trusts

Collective fund which holds a portfolio of securities on behalf of the investors who hold units in the trust.

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U

uncalled capital

Total amount of capital that as yet has not been called up on the shares which are currently issued.

underlying instrument underlying security

Asset that the holder of a derivative has the right to buy or sell, or against which a cash payment is made on exercise of an option or warrant. The underlying instrument may be a security (such as shares in a company), a share price index, a commodity or a currency.

underwriting underwriter

Party that agrees, for a fee, to purchase any unsold shares in an issue of shares.

unit

Unit in a trust.

unit nav

Unit NAV = fund net asset value/number of units on issue in the fund.

unlisted company

A company that is not listed. Securities issued by unlisted companies generally cannot be traded on ASX.

unsecured notes

Loan made to a company for a fixed period of time at a fixed rate of interest. They are issued mainly, but not only, by finance companies for between three months and three years. They offer a higher rate of interest than a debenture of the same maturity, but do not have the same security as a debenture.

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V

variation margin

Call made by the clearing house for additional funds or eligible security to be lodged to cover an unfavourable movement in the price of futures, options or exchange traded CFDs.

volatility

Measure of the amount of fluctuation in price.

VWAP

Volume weighted average price.

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W

warrant code

Six-letter code used to identify and to trade ASX quoted warrants. The first three letters of the code identify the underlying security. For most equity warrants this is the same as the three-letter ASX code of the underlying company shares. The fourth letter of the code identifies the type of warrant, the fifth letter the warrant issuer, the sixth letter is a sequential code.

warrant series

All warrants with the same terms of issue and underlying asset and having the same warrant issuer, exercise price, expiry date and settlement procedure. Each warrant series has a separate warrant code.

warrants

Financial instruments traded on ASX. Broadly split into products with investment purposes and those for trading purposes; warrants may be issued over securities (such as shares), a basket of securities, a share price index, currencies or commodities.

wholesale broker

An ASX trading participants that provide market access and services to financial institutions, intermediaries, advisers and industry participants.

wrap account

Consolidation of investments under one administrative umbrella. Investments are wrapped into one single account.

writer

Seller of an option contract.

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X

XT

Trading condition code. See crossed trade.

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Y

yield

Return on an investment expressed as a percentage.

Yield to maturity (YTM)

A total return measure for bonds which takes account of both capital gain (or loss) and income earned. YTM is calculated using purchase price (not face value) and assumes the instrument is then held to maturity.

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