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List of Glossary Terms

The PDSnet Glossary of Terms contains definitions and explanations for over 2600 financial market terms. These definitions are constantly kept up-to-date with current topical examples from the markets. They are also updated for changes in legislation and current events like COVID19 and the July 2021 civil unrest.

The terms in the Glossary are directly linked to all PDSnet articles, confidential reports, lecture modules and other material. This means that a client reading one of our publications can immediately see which terms are defined in the Glossary and click through to read the definition. Terms within the definitions in the glossary are similarly linked, which gives the Glossary an enormous educational depth share market investors.

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z Numeric Latest


A PRIORI

A Latin phrase meaning "known ahead of time" or more precisely, known without any empirical evidence or experience. The classical example would be a mathematical... read more

 
A2X

The A2X is a South African stock exchange which competes directly with the Johannesburg Securities Exchange (JSE). It is currently operating only... read more

 
ABANDON

An option contract which is not enforced because it is out-of-the-money. Options confer a right to either buy (call) or sell (put) a certain quantity... read more

 
ABANDONED BABY

A rare candlestick pattern which can indicate either a new bullish or a new bearish trend. A bullish abandoned baby pattern occurs where there... read more

 
ABC

Elliott wave terminology for a three-wave countertrend (or downtrend) price movement in an Elliott cycle. Wave "a" is the first down-wave... read more

 
ABNORMAL ITEM

An income or expense which may be part of the company's normal business but which is abnormal in amount. So, an unusually high expense or... read more

 
ABOVE-THE-LINE

Any normal expense or income which has been included in the calculation of a company's gross profit and which is a part of its normal... read more

 
ACCELERATED BOOKBUILD

An offering of new shares in the short term which is non-promoted to institutional investors in order to raise capital. An accelerated bookbuild... read more

 
ACCEPTANCE

Where a bank "accepts" some kind of debt instrument usually at a discount. Debt instruments are basically IOU's written by one organisation... read more

 
ACCEPTANCE DATE

The date on which the right acquired by a shareholder, as a result of a rights issue, must be exercised. Listed companies often raise... read more

 
ACCOMMODATION

The extension of credit by the Reserve Bank to commercial banks. The central bank acts as a banker to the commercial banks, lending them money... read more

 
ACCOUNTANCY

A set of conventions for recording and gathering financial transactions in an organisation. The academic discipline which is accountancy has established a set... read more

 
ACCOUNTING CONSERVATISM

Accountants are notoriously conservative people. Conservatism applies to incomes, expenses, liabilities and assets of unknown amounts.... read more

 
ACCOUNTING CONVENTION

These are conventions developed by the accounting profession to ensure that the financial statements display a clear and accurate picture of the progress... read more

 
ACCOUNTING PERIOD

The period of time over which the financial affairs of a company are being accounted for in the financial statements. The matching principle... read more

 
ACCOUNTING POLICY

A policy established by the board of directors for the allocation of transaction entries into the books of account. For public, listed companies,... read more

 
ACCOUNTING RECORDS

The books of a business. These are the books of first entry and other working papers used by the accountants to draw up a company's financial statements.... read more

 
ACCOUNTS PAYABLE

Amounts owing to the company's creditors in the balance sheet. These appear under current liabilities. These amounts are owed by the... read more

 
ACCOUNTS RECEIVABLE

Amounts owing to the company, usually by customers who have bought products on credit. This is another term for "debtors" and appears in the balance... read more

 
ACCRUAL

A balance sheet item that consists of an expense or income which has not yet been paid or received. So, for example, if a company owes rent... read more

 
ACCUMULATION

When the volumes traded in a share start to pick up while the share price moves sideways or upwards, this is known as an "accumulation... read more

 
ACID TEST RATIO

An accounting ratio used to determine whether a company's current assets excluding its stock (i.e. just its debtors' book... read more

 
ACID TURN RATIO

The ratio os a company's turnover to its assets. The ratio is calculated by dividing a company's total sales by the average... read more

 
ACQUISITION

This is when one company acquires more than 50% of the shares of another or obtains a controlling interest in its shares. The company acquiring the... read more

 
ACT OF GOD

A completely unpredictable event or "black swan" (see "The Black Swan" by Nasssim Talbert) event, usually but not always occurring as a result of some natural... read more

 
ACTIVIST SHORT SELLER

An activist short seller is an investor who takes a short position in a listed company and then publicly attacks them to... read more

 
ACTUALS

(1) Refers to actual physical commodities, as distinguished from the futures on those commodities. So, for example, there is a "spot... read more

 
ACTUARIES INDEX

Most stock market indexes, except for the very simplest are calculated by actuaries. This is because the calculation must take into account... read more

 
ACTUARY

An actuary is an expert in mathematics and statistics who is capable of calculating the probability of key commercial events or of calculating the changing weightings... read more

 
ACZ

An actuary is an expert in mathematics and statistics who is capable of calculating the probability of key commercial events or of calculating the changing weightings... read more

 
ADAM SMITH

The first person to study and write about economics. Adam Smith (1723 - 1790) is regarded as the father of the discipline of economics. His book "An Inquiry... read more

 
ADJUSTED TOTAL EQUITY

This is also known as "adjusted shareholders' equity" and refers to the total amount of money which the shareholders have in a business - the adjustment made is... read more

 
ADMINISTERED PRICE

Prices of certain products in South Africa are determined, not by the forces of supply and demand, but by various government departments and institutions.... read more

 
ADRS

Certificates that are issued by a bank of US origin and traded in the U.S. as domestic shares. The certificates represent the foreign securities that the... read more

 
ADVANCE VOLUME DECLINE INDEX

A breadth indicator which gives a ratio of the volumes of shares with rising prices to shares with falling prices, developed... read more

 
ADVANCE/DECLINE RATIO

This is a refinement of the net advance/decline line (Net A/D), calculated by dividing the difference between the total number of shares up and the... read more

 
ADVANCE/DECLINE RATIO
Your software includes a net advance/decline line (Net A/D) for each sector of the market. These are "breadth indicators" which show the extent of the markets move for various sectors and the... read more
 
ADVERSE EXCURSION

The loss attributable to price movement against the position in any one trade from the time that the trade began. So, for example, if XYZ shares were bought for... read more

 
ADVERSE OPINION

An audit opinion which indicates that the company's financial statements do not accurately reflect the company's performance during the accounting period or its... read more

 
ADVICE

Investment advice has become a big industry in South Africa and world-wide. Lay people with surplus cash obviously wish to generate a return which... read more

 
AFFECTED TRANSACTION

A transaction defined in the Companies Act (71 of 2008) as one which will result in a change in the control of the company. This could be... read more

 
AFRICA BOARD

A division of the JSE which was abandoned in June 2012. The Africa board was originally supposed to attract companies from the rest of Africa to list... read more

 
AFRICAN AND OVERSEAS
05- 09- 2020
This is the holding company of Rex Truform (RTO) which is also listed on the JSE. Rex Trueform (RTO) is an extremely thinly-traded company listed on the JSE - which makes it... read more
 
AFRICAN DAWN CAPITAL
03 - 09 - 2020
This is a small micro-lending company, listed on the Alt-X in 2004. Its share price rose as high as 550c in November 2007, but has since fallen back to 13c. The company is... read more
 
AFRICAN GROWTH AND OPPORTUNITY ACT

An American Act which allows certain African countries to export to America duty free. Altogether, 37 countries in Africa benefit from this piece of American... read more

 
AFRICAN PHOENIX INVESTMENTS LIMITED
06 - 03 - 2020
Phoenix (AXL) is a black-controlled investment holding company whose principal asset is its 100% subsidiary, Standard General Insurance (Stangen). African Bank Investments... read more
 
AFRICAN STOCK EXCHANGE

A stock exchange located somewhere in Africa. The largest stock exchange in Africa... read more

 
AFRIMAT CONSTRUCTION INDEX

An economic index of activity in the construction sector prepared and produced by the economist Roelof Botha, on behalf of Afrimat, every quarter.... read more

 
AFTER TAX EARNINGS

The profit of the company after taxation has been deducted. This figure is shown in the income statement and is used for calculating... read more

 
AFTER TAX INCOME

The profit of the company after taxation has been deducted. This figure is shown in the income statement and is used for calculating... read more

 
AFTER-TAX PROFIT

The profit of the company after taxation has been deducted. This figure is shown in the income statement and is used for calculating... read more

 
AFTERNOON FIX

Twice every trading day members of the London Gold Market Fixing meet on a conference call to decide the gold price - at 10.30am (the morning fix)... read more

 
AGE REBATE

The Income Tax Act (58 of 1962) offers three rebates - primary, secondary and tertiary. In the tax year ending on 28th February 2021, the primary... read more

 
AGENT

A natural or juristic person who acts on behalf of another such person in a commercial transaction. When a stockbroker acts on behalf of his/her... read more

 
AGGREGATE DEMAND

This is an economics term which refers to the total expenditure within the economy. It is a method of calculating gross domestic product.... read more

 
AGM

This is a meeting of the shareholders of a company, which is required in terms of section 61 of the Companies Act (71 of 2008). The AGM must... read more

 
AGOA

An American Act which allows certain African countries to export to America duty free. Altogether, 37 countries in Africa benefit from this piece of American... read more

 
AGRICULTURAL PRODUCTS DIVISION

A division of the JSE that runs spot markets and derivatives markets in agricultural grain products. The main products are soya... read more

 
AGRICULTURE

An industry engaged in the production of a wide variety of products, both animal and vegetable, by means of cultivating the land. This industry is a major... read more

 
AIM

A part of the London Stock Exchange which caters for smaller companies - in a similar way to the JSE's Alt-X. Some South African companies... read more

 
ALAN GREENSPAN

The Chairman of the Federal Reserve Bank of America (Fed) from 1987 to 2006. Alan Greenspan is notable because he ushered in the idea of stimulating... read more

 
ALCO

A committee of senior executives in a large company that manage the cash flow of the business to ensure that there is sufficient liquidity... read more

 
ALGO

Trading automatically, usually without human intervention, through a computer system that is directly connected to an organised exchange. This type of trading... read more

 
ALGORITHMIC TRADING (ALGO)

Trading automatically, usually without human intervention, through a computer system that is directly connected to an organised exchange. This type of trading... read more

 
ALL SHARE INDEX

All stock exchanges have indexes which provide averages of the prices of their listed shares. These averages are normally... read more

 
ALLOCATION

The number of shares actually sold to a person who has applied to participate in a new issue. Where the shares of an initial public offer (IPO) are... read more

 
ALLOTMENT LETTER

Formerly a letter which was issued to inform someone who had applied for shares, either in a rights issue or a public issue, that they had been apportioned... read more

 
ALPHA

Premium that an investment portfolio earns above a given point of reference; a measure of stock performance independent of the market. Unit... read more

 
ALPHAMIN RESOURCES CORPORATION
12 - 08 - 2020
Alphamin (APH) is a tin mining and exploration company operating out of Mauritius. Its primary asset is just over 80% of Alphamin Bisie Mining which has a tin mine in the... read more
 
ALT-X

The Alt-X is part of the JSE. It is a board which is available to those companies which cannot qualify to list on the "main board".... read more

 
ALTERABLE PROVISION

The Companies Act (71 of 2008) distinguishes between alterable and unalterable provisions. An alterable provision is one which may be changed to suit the... read more

 
ALTERNATE DIRECTOR

An individual appointed to take the place of existing director in certain specific circumstances, or at times when he is not available. The Companies Act... read more

 
ALTERNATIVE ASSET

This is an asset which is not traded on any organised exchange in a conventional manner. So, for example, properties are alternative assets, but the shares... read more

 
ALTERNATIVE EXCHANGE (ALT-X)

The Alt-X is part of the JSE. It is a board which is available to those companies which cannot qualify to list on the "main board".... read more

 
ALTERNATIVE INVESTMENT MARKET

A part of the London Stock Exchange which caters for smaller companies - in a similar way to the JSE's Alt-X. Some South African companies... read more

 
ALUMINIUM

A silvery white, soft, non-magnetic and ductile base metal. It is noted for it's low density and ability to resist corrosion. It is used in the transportation... read more

 
AMALGAMATION

This occurs where two or more companies come under the control of one, whose shareholders then become the shareholders of the companies that were... read more

 
AMERICAN DEPOSITORY RECEIPT

Certificates that are issued by a bank of US origin and traded in the U.S. as domestic shares. The certificates represent the foreign securities that the... read more

 
AMERICAN OPTION

An options contract that allows the holder to exercise the option at any time up to and on the expiration date. This is as opposed to a European... read more

 
AMERICAN STOCK EXCHANGE

Originally an overflow of companies that were too small to list on the New York Stock Exchange, the "Amex" or "the curb" as... read more

 
AMEX

Originally an overflow of companies that were too small to list on the New York Stock Exchange, the "Amex" or "the curb" as... read more

 
AMORTISATION

Accounting method in which an asset's cost is spread out over a period of time. For example, a vehicle costing R100 000 might be amortised or "depreciated"... read more

 
ANAUME

Candlestick formation. An exceptional exhaustion pattern (meaning "gap filling") composed of five candles. The anaume occurs when the gap... read more

 
ANDREWS METHOD

This is a technical analysis technique (also known as "Andrews' pitchfork" because of its shape) for establishing upper and lower support and resistance... read more

 
ANNUAL EARNINGS CHANGE

The historical earnings change between the most recently reported fiscal year's earnings and the preceding or a forecast. Paragraph 3.4(b) of the... read more

 
ANNUAL FINANCIAL STATEMENTS

Sometimes known as an Annual Report or just the "financial statements", this is a document required by the Companies Act (71 of 2008) to be... read more

 
ANNUAL GENERAL MEETING

This is a meeting of the shareholders of a company, which is required in terms of section 61 of the Companies Act (71 of 2008). The AGM must... read more

 
ANNUAL NET PROFIT MARGIN

The percentage that the company earned from gross sales (also called "turnover") for the most recently reported fiscal year. In other... read more

 
ANNUAL REPORT

Sometimes known as an Annual Report or just the "financial statements", this is a document required by the Companies Act (71 of 2008) to be... read more

 
ANNUAL RETURN

Every company is required in terms of section 33 of the Companies Act (71 of 2008) to submit a return to the Companies and Intellectual Property... read more

 
ANNUAL SALES CHANGE

The percentage change in sales (turnover) between the most recently reported financial year and the preceding. You should note that unless... read more

 
ANNUALISE

The process of adjusting performance or return which has been made over a period of less than or more than a year so that it can be compared with the annual... read more

 
ANNUITY INCOME

An income which comes in regularly, usually as the result of a contractual obligation and a pre-arranged bank debit order. When analysing a share,... read more

 
APEC

APEC is a group of 21 countries formed in 1989 to encourage trade among the Pacific rim countries. The countries in APEC are: United States; Australia; Brunei... read more

 
APH
12 - 08 - 2020
Alphamin (APH) is a tin mining and exploration company operating out of Mauritius. Its primary asset is just over 80% of Alphamin Bisie Mining which has a tin mine in the... read more
 
APPLICANT

An investor who applies for shares in a company's new issue. Sometimes, if the company is seen to be a very good investment,... read more

 
APPLICATION

This is a form completed by someone who wishes to buy shares as part of a primary market offer. When companies list on the stock exchange,... read more

 
APPRAISAL RIGHTS

Where a minority shareholder does not agree with a fundamental transaction (i.e. one which will change the control of the company,... read more

 
ARBITRAGE

Simultaneous trading in assets, currency or bills of exchange in different international markets, to take advantage of the different rates of return... read more

 
ARMS INDEX

Also known as TRading INdex (TRIN): An advance/decline stock market indicator. A reading of less than 1.0 indicates bullish demand, while greater... read more

 
ARMS RICHARD

Richard Arms was an American technical analyst and wrote books on technical analysis. He was most famous for his book "The Arms Index", but wrote... read more

 
ARTICLES OF ASSOCIATION

Prior to the Companies Act (71 of 2008), this was a document, drawn up by the subscribers of a company at its inception, which governed the... read more

 
ASCENDING FORMATION

A formation, which is part of an uptrend, where the share price forms a triangle bounded by a horizontal resistance line at the top... read more

 
ASCENDING SCALLOP
Similar to the cup and handle formation, this chart formation occurs when price dips momentarily, forming a cup, before resuming its upward course. Typically bullish, the scallop form can be... read more
 
ASIA PACIFIC ECONOMIC COOPERATION (APEC)

APEC is a group of 21 countries formed in 1989 to encourage trade among the Pacific rim countries. The countries in APEC are: United States; Australia; Brunei... read more

 
ASK

The price at which an investor who is holding a share (or other security) is willing to sell. Also referred to as the "offer price." The JSE's... read more

 
ASSESSED LOSS

A loss made by a business which has been accepted as valid by the Receiver of Revenue. Such assessed losses can be carried forward and off-set against... read more

 
ASSET

An item on the balance sheet that means the possessions of a company, an organisation or an individual. Assets can be tangible (e.g. a vehicle),... read more

 
ASSET BACKING

A strong asset backing indicates that a company has large resources of assets. These may reside in a parent company, or they may belong to... read more

 
ASSET BASE

A concept which came from the previous Companies Act and its doctrine of Capital Preservation. Money raised by a company as a result of issuing shares... read more

 
ASSET BUBBLE

An asset bubble is a period where the price of a particular asset reaches unsustainable levels due to investor enthusiasm. Over the centuries there... read more

 
ASSET CLASS

A category of assets which all have similar characteristics. Thus shares, property, commodities, and fixed interest investments bonds... read more

 
ASSET LIABILITY COMMITTEE (ALCO)

A committee of senior executives in a large company that manage the cash flow of the business to ensure that there is sufficient liquidity... read more

 
ASSET MANAGEMENT

The management of listed or unlisted assets (equities, options etc.) by a "fund manager". Asset management is a very well-developed... read more

 
ASSET MANAGER

The JSE is dominated by institutional investors which account for as much as 90% of all trades. These institutions are pension funds, insurance... read more

 
ASSET MARKET

An asset market is the spot market for a particular asset. Thus, the gold market or the oil market or the market for pork bellies... read more

 
ASSET OF LAST RESORT

An asset which will hold its value irrespective of any developments in the economy. Investors are primarily concerned with achieving a balance... read more

 
ASSET STRIPPING

This occurs where a company is purchased because the market price of its shares is less than the value of its assets. Assets are then... read more

 
ASSET TURN RATIO

The ratio of a company's sales or turnover to the average value of assets held over the accounting period. The objective... read more

 
ASSETS HELD FOR SALE

In terms of International Financial Standards Reporting (IFRS) 5, when a company's board decides that a particular asset or group of assets... read more

 
ASSIGNMENT

When a trader sells short an option, he may be assigned in the event that the purchaser exercises the option. A trader with a short call... read more

 
ASSOCIATED COMPANY
A company in which between 20% and 50% of the share capital is held. Where less than 20% is held then the shares would be considered an "investment" and where more than 50%... read more
 
ASTROPHYSICAL CYCLE

Any earthly cycle that has been scientifically related to the physics of the planetary system. Some technical analysts say that share market cycles have a correlation... read more

 
ASX

Formed in 1987 with the amalgamation of the six state exchanges, the ASX offers organised exchanges in equities, derivatives, fixed interest... read more

 
AT BEST

An instruction given to a stockbroker by his clients to sell or buy "at best" would give the broker freedom to purchase or sell the shares concerned... read more

 
AT CALL

The term used to describe money placed, usually with a bank, which can be drawn immediately - as opposed to money which is tied up for a period of time.... read more

 
AT MARKET

An order to be transacted immediately against the best opposite order in the book at the time of making such entry.

 
AT-THE-MONEY
An option whose strike price is nearest the current price of the underlying deliverable.
 
ATS

ATS (see SETS). In 1996 the open outcry trading floor was closed on 7 June and replaced by an order driven, centralised, automated trading system known... read more

 
ATTRIBUTABLE EARNINGS

That part of a company's profit which is "attributable" to the ordinary shareholders. In other words, after the normal operating expenses... read more

 
ATTRIBUTABLE PROFIT

That part of a company's profit which is "attributable" to the ordinary shareholders. In other words, after the normal operating expenses... read more

 
AUDIT

All companies listed on the JSE have to produce at least two sets of audited financial statements each financial year - interim... read more

 
AUDIT DISCLAIMER

This is an audit opinion given when the auditor cannot obtain sufficient documents and information to support their opinion. This can happen because management... read more

 
AUDIT OPINION

An audit opinion where the auditor refuses to give an opinion because he feels that he can place no reliance on the underlying financial accounts.... read more

 
AUDITOR

A person who is qualified to conduct an audit on a company or other organisation. Auditors are either internal auditors working for the company that... read more

 
AUDITOR-GENERAL

The auditor-general of South Africa (AGSA) is an appointment in terms of Chapter 9 of the constitution (section 181). The AGSA is tasked with conducting regular... read more

 
AUDITORS' REPORT

A part of the annual financial statements required by the Companies Act where the auditors state that they have examined the financials and... read more

 
AUSTRALIAN SECURITIES EXCHANGE (ASX)

Formed in 1987 with the amalgamation of the six state exchanges, the ASX offers organised exchanges in equities, derivatives, fixed interest... read more

 
AUTHORISED CAPITAL

The number of shares in each class which a company is authorised to issue to the public or in exchange for assets. The authorised shares must... read more

 
AUTHORISED SHARES

The number of shares in each class which a company is authorised to issue to the public or in exchange for assets. The authorised shares must... read more

 
AUTHORIZED SHARE CAPITAL

The number of shares in each class which a company is authorised to issue to the public or in exchange for assets. The authorised shares must... read more

 
AUTO CATALYST

A stainless-steel cylinder containing a honeycomb coated with a solution of rhodium, platinum and palladium. It is installed on a vehicle's exhaust system to convert... read more

 
AUTOMATED TRADING SYSTEM

ATS (see SETS). In 1996 the open outcry trading floor was closed on 7 June and replaced by an order driven, centralised, automated trading system known... read more

 
AUTOREGRESSIVE INTEGRATED MOVING AVERAGE (ARIMA)

A linear stochastic model forecasting methodology described by Box and Jenkins in their book "Time Series Analysis, Forecasting and Control".

 
AVERAGE

The mean of a set of numbers. Averages are used extensively in the share market for the determination of market indexes and economic... read more

 
AVERAGE COST

A method of valuing shares in a portfolio at the average of what they cost. For example, if 100 shares are bought for 100 cents each and then... read more

 
AVERAGE DIRECTIONAL MOVEMENT INDEX

Indicator developed by J. Welles Wilder to measure market trend intensity. Average Directional Movement Index Technical Indicator (ADX) helps... read more

 
AVERAGE NUMBER OF SHARES IN ISSUE

Certain statistics for listed companies on the JSE are given in the form of "per share" data - such as earnings per share and... read more

 
AVERAGE TRUE RANGE

A moving average of the true range. Developed by J. Welles Wilder and introduced in his book, "New Concepts in Technical Trading Systems" (1978),... read more

 
AVOIDANCE
The organisation of a person's financial affairs in such a way as to minimise their tax liability within the requirements of the Income Tax Act (58 of 1962). In other words, avoidance... read more
 
AVOISION

Taking advantages of those parts of the Income Tax Act (58 of 1962) which are not well defined to get out of paying tax. This practice runs the risk that... read more