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


C.A.

A member of the South African Institute of Chartered Accountants (SAICA). A chartered accountant (CA) is a person who has passed his bachelors degree (usually... read more

 
CA

A member of the South African Institute of Chartered Accountants (SAICA). A chartered accountant (CA) is a person who has passed his bachelors degree (usually... read more

 
CAC INDEX
The Cotation Assistee en Continu is an index of the 40 largest shares trading on the Paris stock exchange, now known as the Euronext Paris. It commenced with a base value of 1000 in 1987. It... read more
 
CAC40

The trading system used in the 1980's and 1990's by the Paris Bourse in France. This system gave way to the Nouveau Systeme de Cotation (NSC) in 2000, but the... read more

 
CALL ACCOUNT

An account with a bank where the funds on deposit can be withdrawn immediately without notice. Call accounts typically attract a lower rate of interest... read more

 
CALL OPTION

The purchased right to buy (call) specified securities at a specified price (strike price) within a specified period (American) or on a specified... read more

 
CALL WARRANT

This is a securities contract which gives the holder the right to purchase a specified quantity of a company's shares on or before a specific... read more

 
CALMAR RATIO

The average rate of return for the last 36 months divided by the maximum drawdown for the same period. It is usually calculated on a monthly... read more

 
CANCEL ORDER

To abort a pending or working order. Occasionally, a trader may attempt to cancel an order that has already been executed but not yet reported as... read more

 
CANDLE VOLUME

This is a variation of standard candle stick charts whereby the width of the candle reflects the volume traded on that particular day.... read more

 
CANDLE VOLUME CHART

A candlestick chart where the width of the candles is determined by the volume traded during the day. Obviously this leads to an irregular... read more

 
CANDLESTICK

An individual display of the high, low, open and close of a specific security over a period of time. A candlestick chart... read more

 
CANDLESTICK BODY

In candlestick charting, the body of the candle is drawn between the opening price and the closing price and is coloured... read more

 
CANDLESTICK CHARTING

A charting method which offers an alternative to the bar chart method of displaying daily weekly or monthly data. This method originated in Japan.... read more

 
CAP ISSUE

Also called "bonus issues", these do not involve transfer of cash between the company and its members. They occur when a company feels it desirable... read more

 
CAPE TOWN STOCK EXCHANGE

Previously the 4 Africa Exchange (4AX), the Cape Town Stock Exchange began operations as a South African stock exchange in March 2017. To differentiate... read more

 
CAPESIZE SHIP

A ship which is too large to pass through the Suez or Panama Canals and so has move from one ocean to another by going around Cape Town in South Africa or ... read more

 
CAPEX

An abbreviation for capital expenditure. It is often used when referring to gold mines. It refers to expenditure of a capital nature - in other words, used... read more

 
CAPITAL
Money which is used to supply working capital or to purchase capital goods, which are to be used to generate the income of the company. Capital can also include the reserves... read more
 
CAPITAL ACCOUNT

An element of the Balance of Payments (BOP) which shows the movement of capital into and out of a country. For example, it shows overseas investors... read more

 
CAPITAL ADEQUACY RATIO

The Reserve Bank's capital requirement for commercial banks set in terms of their risk weighted assets (RWA). The bank's RWA is made up of... read more

 
CAPITAL ALLOWANCE

A capital allowance enables a company to deduct a portion of any capital cost which they may have incurred during the tax year for... read more

 
CAPITAL BASE

This is the capital which the private investor has available for investment. This can include the equity in your house, your stock market... read more

 
CAPITAL EMPLOYED
An out-dated term referring to the liabilities side of the balance sheet. 
 
CAPITAL FLOWS

The movement of capital into and out of a country as shown in the capital account of their balance of payments. In any financial period there... read more

 
CAPITAL GAIN

A profit made because an investment is sold for more than its purchase price. The term "capital gain" should not be confused with the definition of Capital... read more

 
CAPITAL GAINS DISTRIBUTION

A distribution to investment company shareholders from net long-term capital gains realised by a regulated investment company on the... read more

 
CAPITAL GAINS TAX

A tax levied on the sale of an asset at a profit. For example, if you buy a piece of land and then later sell it for R100 000 more than you paid... read more

 
CAPITAL INTENSIVE

A term which describes those businesses which use huge amounts of capital to make a profit. Maybe they have plant, machinery and land tied up in... read more

 
CAPITAL LOSS
Losses incurred when capital assets are sold for a price which is lower than the original purchase price.
 
CAPITAL MARKETS

A broad term which incorporates any market where capital is raised. Mostly this means either the stock market or the bond market. Capital... read more

 
CAPITAL PRESERVATION

A policy of keeping the cash which a business has in the company rather than paying it out in the form of dividends or using it for capital... read more

 
CAPITAL REDUCTION

This is an unusual corporate action which involves the return to the shareholders of a company of part of the capital which they contributed... read more

 
CAPITAL STRUCTURE

This is the way in which a company has raised the capital needed to establish and expand its business activities or, more specifically, the number... read more

 
CAPITALISATION ISSUE

Also called "bonus issues", these do not involve transfer of cash between the company and its members. They occur when a company feels it desirable... read more

 
CAPITALISING LOANS/INTEREST

This is the process when loans or interest payable are converted to capital. This alters the gearing or borrowing ratio of the... read more

 
CAPITALISM

A socio-economic system in which the factors of production are substantially controlled by the private sector rather than the government. Adam Smith... read more

 
CAPITALIST

A socio-economic system in which the factors of production are substantially controlled by the private sector rather than the government. Adam Smith... read more

 
CAPITALIZE

This refers to the  conversion of an expense from the income statement into an asset on the balance sheet. This is one of the... read more

 
CAPITULATION

This is a charting term which refers to the lowest point in a bear trend. It is the point where even the most optimistic of the bulls... read more

 
CAPPED INDEX

An index where the influence of components of the index is limited to a specific percentage of the total. For example, the JSE Top 40 index has a... read more

 
CARBON CREDIT

The is a policy established in terms of the Carbon Tax Act (15 of 2019) in terms of which taxpaters who are subject to carbon tax may make use of certain allowances... read more

 
CARBON DIOXIDE TAXATION

A tax introduced by President Cyril Ramaphosa from 1st June 2020 in terms of the Carbon Tax Act (15 of 2019). In terms of this Act, companies will be taxed... read more

 
CARBON FOOTPRINT

The amount of greenhouse gas (GBG) emissions (particularly carbon) put into the air by a person, company or other organisation. Your carbon footprint... read more

 
CARBON IN LEACH

A technique whereby cyanide leaching and granulated activated carbon are used to absorb precious metals. The "loaded" carbon is then separated and the gold... read more

 
CARBON NEUTRALITY

This means achieving a position of zero net emissions of greenhouse gases (GHG) by off-setting emissions with carbon credits or by carbon removal. Some... read more

 
CARBON OFFSET

The is a policy established in terms of the Carbon Tax Act (15 of 2019) in terms of which taxpaters who are subject to carbon tax may make use of certain allowances... read more

 
CARBON TAX

A tax introduced by President Cyril Ramaphosa from 1st June 2020 in terms of the Carbon Tax Act (15 of 2019). In terms of this Act, companies will be taxed... read more

 
CARRY TRADE

The movement of cash from a low interest country or area to a high interest country. Emerging economies typically have considerably higher interest... read more

 
CARRYING BROKER

A member of a futures exchange, usually a clearing house member, through which another firm, broker or customer chooses to clear all or some... read more

 
CARRYING CHARGE

The cost of storing a physical commodity, such as grain or metals, over a period of time. The carrying charge includes insurance, storage and interest... read more

 
CARTEL

A group of companies that together have a sufficiently large share of a particular product or industry so that they can force prices up by not competing... read more

 
CASH

A balance sheet asset which appears among the current assets as "Cash and Bank Balances" . Cash is part of the company's working capital... read more

 
CASH ASSET

A company which has cash or near-cash as its only asset. Besides the income derived from investing this cash, these companies... read more

 
CASH COMMODITY
The actual physical commodity as distinguished from the futures contract based on the physical commodity. Also referred to as Actuals.
 
CASH CONVERSION RATIO

The ratio of operating cash flow to EBITDA (earnings before interest, taxation, depreciation and amortisation).... read more

 
CASH EQUIVALENT
Money held in various accounts by a company where it can only be liquidated after a delay. Thus the money in the company's bank account is immediately availabe, but the company... read more
 
CASH FLOW

This is the amount of cash coming into a company less the amount going out. Cash flow is important because a profitable company can... read more

 
CASH MARKET

A place where people buy and sell the actual commodities (i.e., grain elevator, bank, etc.) also often known as a "spot market" to distinguish... read more

 
CASH RATIO

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

 
CASH SETTLEMENT

A method of settling certain futures or options contracts whereby the market participants settle in cash (rather than delivery of the... read more

 
CASUS FORTUITUS
In law this refers to an unpredictable event which prevents one party from completing its obligations in terms of a contract. Most major contracts contain a force majeure clause which allows... read more
 
CATAPULT FORMATION

A formation usually associated with point & figure charting where the chart makes a triple top, breaks above that top and then... read more

 
CAUTIONARY ANNOUNCEMENT

This is a publicly advertised announcement made by a listed company to urge shareholders to exercise caution when trading in its shares.... read more

 
CBI

Contingent business interruption (CBI) is a type of business insurance that covers a business against the interruption of its business by a disaster. The business... read more

 
CBOT

Chicago Board of Trade. The CBOT is a global commodity futures exchange trading treasury bonds, corn, soybean, wheat, mini-sized Dow,... read more

 
CENSURE

The JSE has very strict rules about what listed companies can and cannot do. If these rules are ignored or broken the JSE sometimes issues... read more

 
CENTRAL BANK

A government or quasi-governmental organization that manages a country's monetary policy. For example, the U.S. central bank is the Federal Reserve, and... read more

 
CENTRAL ENERGY FUND (CEF)

This is a state-owned and controlled company established in terms of the Central Energy Fund Act (38 of 1977) which was originally established by the National... read more

 
CENTRAL SECURITIES DEPOSITORY

The role of a central depository is to maintain records of all purchases and sales of securities on organised exchanges within the country. In South... read more

 
CENTRAL SECURITIES DEPOSITORY PARTICIPANT

A CSDP is a person authorised to perform custodial, administrative or settlement duties. The central securities depository (CSD) in South Africa is known... read more

 
CEO

The leader of a company's board of directors. The CEO is in charge of and responsible for everything that happens in the company. However,... read more

 
CERTIFICATE OF DEPOSIT
A commercial "I.O.U", usually issued by a commercial bank. It is a certificate representing a deposit usually of at least R100 000 which entitles the holder to a rate of annual interest and the... read more
 
CERTIFICATED SECURITY

A security which is represented by a certificate. This can be the case for equity shares in South Africa, but since dematerialisation... read more

 
CERTIFIED FINANCIAL PLANNER

To become a certified financial planner (CFP) you must have a post-graduate qualification from one of the recognised Financial Planning Institute's (FPI) approved... read more

 
CFD

A derivative contract that is not guaranteed by any organised exchange - which means that the counter-party risk is carried by the person... read more

 
CFO

The Chief Financial Officer (CFO) is the senior executive responsible for managing the financial affairs of a company. The CFO's duties include tracking cash flow,... read more

 
CGT

A tax levied on the sale of an asset at a profit. For example, if you buy a piece of land and then later sell it for R100 000 more than you paid... read more

 
CHAIKIN OSCILLATOR

An oscillator created by subtracting a 10-day Exponential Moving Average (EMA) from a three-day EMA of the accumulation /distribution line. This... read more

 
CHAIRMAN OF THE BOARD OF DIRECTORS

The chairman of the board of directors of a company is usually appointed by the directors. His position is in no way different from the other... read more

 
CHAIRMAN'S REPORT

Most annual financial statements contain a Chairman's report, although this is not a requirement of the Companies Act. It is worth reading the chairman's... read more

 
CHAMBER OF MINES
Previously known as the Chamber of Mines, this organisation represents employers in the mining industry in South Africa. Its objective is to support and promote mining in this country. It was... read more
 
CHANNEL

A technical analysis term which refers to a period during which a data stream oscillates between upper and lower parallel channel lines. You will... read more

 
CHAPTER 9 INSTITUTIONS

Those institutions which are established in terms of Chapter 9 of the Constitution of South Africa. There are six chapter 9 institutions - the Electoral Commission,... read more

 
CHARISMATIC LEADER

Many companies listed on the JSE were founded or are run by a charismatic leader. The problem with this is that when that leader leaves the... read more

 
CHARLES DOW

Charles Dow was one of the founders of Dow Jones & Co. and the originator of the famous Dow Jones indexes. He developed the "Dow Theory" of market... read more

 
CHART

In the context of the share market, this is a display or picture of a security that plots price and/or volume (the number of shares... read more

 
CHARTERED ACCOUNTANT

A member of the South African Institute of Chartered Accountants (SAICA). A chartered accountant (CA) is a person who has passed his bachelors degree (usually... read more

 
CHARTING

The analysis of group investor behaviour, as reflected in the patterns of share prices and volumes, indices, exchange... read more

 
CHARTING STYLE

The manner in which the five data points for a share are displayed in a chart. Every trading day, every share has a price for its high,... read more

 
CHARTIST
A person who studies and makes use of patterns within the prices of shares and other securities. Technical analysis aims to develop a profitable trading strategy... read more
 
CHEAP

The meaning of the word "cheap" in the share market is not the same as it is in common parlance. When a share is regarded as cheap, then it is perceived... read more

 
CHICAGO MERCANTILE EXCHANGE

The Chicago Mercantile Exchange (CME). The CME is the largest futures exchange in the United States and also owns and operates the largest futures... read more

 
CHIEF EXECUTIVE OFFICER

The leader of a company's board of directors. The CEO is in charge of and responsible for everything that happens in the company. However,... read more

 
CHIEF FINANCIAL OFFICER (CFO)

The Chief Financial Officer (CFO) is the senior executive responsible for managing the financial affairs of a company. The CFO's duties include tracking cash flow,... read more

 
CHINESE WALL

A communications barrier between members or departments of a financial institution to prevent the transfer of price sensitive information. Chinese... read more

 
CHROME

A hard, corrosion-resistant, brittle metal processed through a smelter into ferrochrome and used as an additive to make stainless steel. South Africa produces... read more

 
CHROMIUM

A hard, corrosion-resistant, brittle metal processed through a smelter into ferrochrome and used as an additive to make stainless steel. South Africa produces... read more

 
CIPC

Established by the Companies Act, this commission is responsible for registering companies in South Africa and maintaining a register of all companies.... read more

 
CIRCUIT BREAKER

A system of limiting trading highs and price limits on equities and derivatives markets designed to provide a cooling-off... read more

 
CISCA

This Act replaces the Unit Trust Control Act and the Participation Bonds Act and it came into effect in 2003. It regulates any scheme where members of the... read more

 
CIVIL UNREST

Any substantial disturbance conducted illegally by a large group of civilians. South Africa is no stranger to civil unrest. In fact it is estimated that there... read more

 
CLAIMS RATIO

A ratio used by the insurance industry to determine its profitability. The ratio is the total of claims as a percentage of insurance premiums earned.... read more

 
CLASS

Some listed companies may issue a variety of different shares with different risk profiles to entice investors to support them.... read more

 
CLAW BACK CLAUSE

This is a clause in an agreement which allows one of the parties to retrieve monies already paid under certain specific circumstances. Typically, employee contracts... read more

 
CLEAR
The process by which a clearing house maintains records of all trades and settles margin flow on a daily marked-to-market basis for its clearing members.
 
CLEARING HOUSE
An agency or separate corporation of a futures exchange that is responsible for settling trading accounts, collecting and maintaining margin monies, regulating delivery and reporting... read more
 
CLEARING MEMBER

A member of an exchange clearing house responsible for the financial commitments of its customers. All trades of a non-clearing member must... read more

 
CLIMATE CHANGE

A major shift in the earth's climate, almost certainly caused by the build-up of so-called greenhouse gases like carbon dioxide and methane. Current research... read more

 
CLOSE

This is the price at which the last transaction of a particular share took place during the trading session being reported on. The uncrossing... read more

 
CLOSE CORPORATION

A type of juristic person designed for use by small businesses to give them the benefits of limited liability but without the red tape and... read more

 
CLOSE OF TRADE

When the share market stops trading at the end of each trading day. The share price at the close is what is used in all charts... read more

 
CLOSED PERIOD

The time between the end of a company's financial year and the publication of its audited financial statements. For JSE companies,... read more

 
CLOSED TRADES
Positions that have been either liquidated or offset.
 
CLOSED-END FUNDS
A mutual fund that does not sell unlimited shares; one with a specific number of outstanding shares.
 
CLOSING DAY OF OFFER

Last day on which an offer made by a company to its shareholders may be accepted (e.g. in the case of a rights offer or an offer to... read more

 
CLOSING PRICE

This is the price at which the last transaction of a particular share took place during the trading session being reported on. The uncrossing... read more

 
CLOSING RANGE
A range of prices at which futures transactions took place during the close of the market.
 
CLOSING STOCK

At the end of the accounting period, stock (also called "inventory") must be valued to determine the company's "cost of sales". The... read more

 
CM42

The form which must be completed and signed by both the purchaser and seller of shares for a transfer of shares to take place. In practice, since shares... read more

 
CME

The Chicago Mercantile Exchange (CME). The CME is the largest futures exchange in the United States and also owns and operates the largest futures... read more

 
COAL

A sedimentary rock which is formed by layers of plants, mostly trees which have become compressed into seams in the rock. Coal is combustible as a fossil fuel... read more

 
CODE

An abbreviation for securities traded on an organised exchange. Share codes on the JSE are between 3 and 6 letters long - so,... read more

 
CODE FOR RESPONSIBLE INVESTING IN SOUTH AFRICA (CRISA)

Developed by the Institute of Directors, this code is similar to the "Principles of Responsible Investing" which is backed by the United Nations and was... read more

 
CODE OF GOOD PRACTICE

This is a lengthy document established in terms of the Broad-Based Black Economic Empowerment Act (53 of 2003) covering such issues as the dismissal of... read more

 
COINCIDENCE
In Gann theory, a projected reversal point.
 
COINCIDING INDICATOR

An economic indicator that moves in the same direction as the business cycle. In other words, it turns when the economy as a whole turns, either... read more

 
COLLATERAL

An asset of some type which is given to a lender as security for the money lent. Any asset of value can act as collateral. With property, the land... read more

 
COLLECTIBLE

An asset which acquires value independently of its inherent value because it is collected by a sufficiently large group of collectors. Collectibles can... read more

 
COLLECTIVE BARGAINING

The process whereby employers negotiate with organised labour on issues such as wages, conditions of employment and other benefits. Both parties have a... read more

 
COLLECTIVE INVESTMENT SCHEMES CONTROL ACT

This Act replaces the Unit Trust Control Act and the Participation Bonds Act and it came into effect in 2003. It regulates any scheme where members of the... read more

 
COLLUSION

This term is normally used in conjuction with the competition authorities, one of whose functions is to prevent price collusion between companies.... read more

 
COLOCATION

The JSE offers a colocation facility for those companies that want to use program trading to extract very small profits from arbitrage... read more

 
COMBINED FORECAST
The weighted average of two or more forecasts.
 
COMEX
The Comex, which was previously the commodities exchange, is a division of the New York Mercantile Exchange (NYMEX). It trades futures and options in a variety of precious and base metals. This... read more
 
COMMERCIAL

The commercial sector includes all companies that are involved in the production, processing, or retailing of products and services.... read more

 
COMMERCIALLY ACTIVE

A term which is used to describe those unemployed people in the economy who are still actively seeking employment and have not yet succeeded in finding... read more

 
COMMERICAL BANK

An organisation registered in terms of the Banks Act (94 of 1990). Commercial banks are deposit-taking institutions that must be registered under the Act to conduct... read more

 
COMMISSION
A fee charged by a broker or agent to a customer for executing a transaction.
 
COMMODITY

Basically these are raw materials such as gold, silver, soya beans, sugar, coffee, steel, etc. Many commodities (such as gold)... read more

 
COMMODITY CURRENCY

This is a currency the strength of which is primarily determined by a or group of commodities. Typically, this can be found in third world... read more

 
COMMODITY CYCLE

Commodity prices tend to move in cycles lasting several years. For example, the aluminium price bottomed at $1100 a ton in late 1993... read more

 
COMMODITY POOL OPERATOR

An individual or organisation which operates or solicits funds for a commodity pool. A CPO is generally required to be registered with the CFTC.

 
COMMODITY SHARE

Shares of companies in the resource sector. Commodity shares are shares of those companies which manufacture, extract or sell... read more

 
COMMODITY TRADING ADVISOR

A person who, for compensation or profit, directly or indirectly advises others as to the advisability of buying or selling futures or commodity... read more

 
COMMON STOCK
A term used in America to describe their equivalent of ordinary shares.
 
COMPANIES ACT

The Companies Act (71 of 2008) contains the law concerning the formation and management of companies in South Africa. It can be viewed at:
read more

 
COMPANIES AND INTELLECTUAL PROPERTY COMMISSION

Established by the Companies Act, this commission is responsible for registering companies in South Africa and maintaining a register of all companies.... read more

 
COMPANY

An organisation which is registered with the Companies and Intellectual Properties Commission and incorporated in terms of the Companies Act (71... read more

 
COMPANY BUY-BACK
The Companies Act (71 of 2008) allows a company to buy back its own shares in the open market, provided it can pass a solvency and liquidity test. To do this the company board of directors must... read more
 
COMPANY REGISTERED OFFICE

In terms of the Companies Act (71 of 2008) every company must have a registered office. That office must be where certain records are maintained... read more

 
COMPANY REGISTRATION CERTIFICATE

A certificate which is issued when a company is registered with the Companies and Intellectual Property Commission (CIPC). The certificate is proof... read more

 
COMPANY REGISTRATION NUMBER

This is a 16-digit number consisting of 8 numbers followed by 2 letters and then a further 6 numbers which is given to identify each company and limited... read more

 
COMPANY SECRETARY

In terms of section 86 of the Companies Act (71 of 2008), public or state-owned companies must appoint a company secretary who must be a permanent... read more

 
COMPANY TAX

In South Africa, company tax is 28% of a company's taxable income. Taxable income is the total of a company's incomes less all its deductible... read more

 
COMPANY WEBSITE

These are an immensely valuable source of information for private investors. Almost every listed company maintains a website on which it posts... read more

 
COMPARABLE PERIOD

The previous equivalent financial period with which the current periods figures are comparable. For example, a company's headline earnings per share... read more

 
COMPARATIVE FINANCIALS

The Companies Act (71 of 2008) requires that companies provide comparative figures when reporting their financial results. This usually takes... read more

 
COMPARATIVE RELATIVE STRENGTH INDICATOR

A technical indicator which compares the price movement of a stock with that of its competitors, industry group or the entire market.... read more

 
COMPENSATION COSTS
The regular remuneration of unskilled or semi-skilled, usually blue-collar workers in exchnage for their labour. Wages are often paid weekly or bi-weekly. This is as opposed to... read more
 
COMPETITION
The capitalist economic system is based on competition. Manufacturers produce a product which they perceive to be in demand and they compete with each other on quality, price and... read more
 
COMPETITION ACT

This Act sets up the Competition Tribunal, Appeal Court and Commission. Together these three organisations prosecute breaches of the Act and require notification... read more

 
COMPETITION TRIBUNAL

The Competition Tribunal is established in terms of section 26 of the Competition Act (89 of 1998) to hear and decide on competition cases prepared by the... read more

 
COMPETITIVENESS RANKING
The global competitiveness index (GCI) is prepared by the World Economic Forum (WEF) annually and it ranks 141 countries on how competitive they are. To do this it uses 12 areas which indicate... read more
 
COMPLIANCE OFFICER

These days, companies, and especially listed companies have a host of rules and regulations that they must comply with - from the Companies Act... read more

 
COMPOUNDING

Compounding occurs where the return from an investment is added to the original capital and then itself earns a further return which is further added... read more

 
COMPULSORY ACQUISITION

The forced acquisition of minority shares by a majority of more than 90% of the shareholders of a company. In terms of section 124 of the... read more

 
CONCESSIONARY FINANCE

Finance which is provided at very low interest rates or even as a donation in order to further an altruistic objective. For example, in 2020, Escom was... read more

 
CONDITIONAL OFFER

An offer made to the shareholders of a company conditional to the occurrence of some event. Typically, where a take-over bid is being made,... read more

 
CONDITIONS PRECEDENT

These are the conditions that must be met before a major transaction, such as the sale of a subsidiary or a take-over can take place. Typically,... read more

 
CONFIRMATION

A charting pattern giving credibility to a formation which has taken place.  Typically, it is advised to wait for at least three days... read more

 
CONFIRMATION SIGNAL

The next candle in a candlestick formation which confirms the previous reversal signal, confirming that a change in the direction of... read more

 
CONFLICT OF INTEREST

A situation in which an offical (either commercial or government) can derive a personal benefit from a decision which he is making or is a party to.  Conflicts... read more

 
CONGESTION AREA OR PATTERN

A series of trading days in which there is no visible progress in price either upwards or downwards. This is also known as a "sideways" market... read more

 
CONGLOMERATE

These are massive, usually multi-national, holding companies involved in a wide variety of industries. Their size tends to make them immune to developments... read more

 
CONSENSUS FORECAST

An average of the forecasts of a group of analysts or economists for a particular economic indicator or the profit of a particular... read more

 
CONSOLIDATION

1. In technical analysis, where a chart moves up and down within a narrow range, bounded by a support and resistance... read more

 
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

 
CONSUMER DEMAND

This is the total of what consumers spend on goods and services for their personal use. It makes up about 60% of gross domestic product (GDP)... read more

 
CONSUMER GOODS

Anything which is normally bought by consumers as the end user. This differs from industrial goods, which are bought with the objective of producing some... read more

 
CONSUMER PRICE INDEX

The measure of the degree to which the currency of a country is losing purchasing power over time through inflation. In South Africa, the... read more

 
CONSUMER SPENDING

This is the total of what consumers spend on goods and services for their personal use. It makes up about 60% of gross domestic product (GDP)... read more

 
CONSUMPTION

Consumption is the buying of goods and services by consumers. Private consumption expenditure by consumers accounts for about 60% of gross domestic... read more

 
CONSUMPTION EXPENDITURE

Consumption is the buying of goods and services by consumers. Private consumption expenditure by consumers accounts for about 60% of gross domestic... read more

 
CONSUMPTION FUNCTION

A linear function representing the realtionship between disposable income and consumer spending. The function assumes that there is a certain amount... read more

 
CONTANGO

A futures market were prices in succeeding delivery months are progressively higher. The opposite of "backwardation".

 
CONTINGENT BUSINESS INTERRUPTION

Contingent business interruption (CBI) is a type of business insurance that covers a business against the interruption of its business by a disaster. The business... read more

 
CONTINUATION CHART

A derivatives chart in which the price scale for the data for the end of a given contract and the data for the beginning of the next contract are... read more

 
CONTINUATION SIGNAL

A pattern in technical analysis which suggests that a chart is diverging slightly from it's trend however will eventually continue... read more

 
CONTINUING OPERATIONS

Those operations which a company intends to continue with. Companies are always concerned with their focus and they tend to sell or discontinue those... read more

 
CONTRACT FOR DIFFERENCE

A derivative contract that is not guaranteed by any organised exchange - which means that the counter-party risk is carried by the person... read more

 
CONTRACT MONTH

The month in which delivery is to be made in accordance with the terms of the futures contract. Also referred to as Delivery Month.

 
CONTRARIAN

An investor who believes that to beat the market you have to be right when the market is on average wrong. Contrarians delight in buying when... read more

 
CONTROL

Section 2 of the Companies Act (71 of 2008) says, "a person controls a juristic person, or its business, if:

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CONTROL PREMIUM

The additional cost which an acquiring company must pay in order to obtain control of a subsidiary. This cost is incurred because control... read more

 
CONTROLLING SHAREHOLDER

A shareholder who owns more than 50% of a company's voting share capital and can therefore control the company's activities.

 
CONVARIANCE

Multiplies the deviation of each variable from its mean, adds those products and then divides by the number of observations. The objective is to provide... read more

 
CONVERGENCE

When futures prices and spot prices come together at the futures expiration. Futures contracts expire at the end of each quarter - in other... read more

 
CONVERSION ARBITRAGE
Traders buy and sell two different securities (or synthetic securities), forcing equivalent prices for equivalent securities.
 
CONVERTIBLE PREFERENCE SHARE

This is a preference share which can be converted into an ordinary share on a specified future date. This gives a higher degree of security than... read more

 
CONVERTIBLE SECURITIES

These are shares, debentures or other securities which are convertible either voluntarily or compulsorily into ordinary shares... read more

 
COPPER

One of the elements with the symbol "cu". Copper is a maleable base metal which conducts electricity and heat very efficiently. It is used for most electrical... read more

 
COPPOCK CURVE

A long-term price momentum indicator. For example, a 10-month weighted moving average of the sum of the 14-month rate of change and... read more

 
CORE BUSINESS

The primary business of any company. You will often hear of companies selling off their non-core businesses in order to focus on their most... read more

 
CORNER
This is when a share, which has been short -sold, falls into the hands of a few investors who are unwilling to sell and who thus cause a bear squeeze. Also where one... read more
 
CORPORATE
Of or pertaining to a company. Thus, for example, a company's image is known as its "coporate image". Companies are juristic persons resonsible for their own debts and management... read more
 
CORPORATE ACTION

Any action taken by a company that has a major effect on its shareholders. Corporate actions are divided into those which require the shareholder... read more

 
CORPORATE GOVERNANCE

A set of rules and procedures which control the way in which a company is managed in the interests of its primary stakeholders including its shareholders,... read more

 
CORPORATE IMAGE

The way in which the public perceives a company. This can be very important to the company's marketing and to its share price. Companies with... read more

 
CORPORATION

An organisation which is registered with the Companies and Intellectual Properties Commission and incorporated in terms of the Companies Act (71... read more

 
CORRECTION

This term is used quite loosely to mean any short-term change in the direction in which a share or market is moving. More strictly, it refers to... read more

 
CORRECTION WAVE
A wave or cycle of waves moving against the current impulse trend's direction.
 
CORRELATION COEFFICIENT

This is the degree to which two continuous data streams (such as two share price graphs or currencies) are the same - i.e. the degree to which... read more

 
COST ACCOUNTANCY

The recording and analysis of a company's costs in such a way as to improve its profitability. Cost accounting is distinguished from financial accounting.... read more

 
COST BASIS

The cost of a given share or group of stock shares. This is used as a bench-mark to establish whether the investment is profitable or not and by... read more

 
COST OF CONTROL

The additional cost which an acquiring company must pay in order to obtain control of a subsidiary. This cost is incurred because control... read more

 
COST OF EXTRACTION

This is a mining term which refers to the cost extracting a metal or mineral from its ore body so that it can be sold. In South Africa, this concept is... read more

 
COST OF SALES

An accounting measure which endeavours to measure the cost of the goods sold during the accounting period. The method is to value the inventory... read more

 
COSTS
This something which a company has to pay for. Companies have two types of expenses - those which go up and down with sales and those which have to be paid even if there are no sales.... read more
 
COTATION ASSISTEE EN CONTINU (CAC)

The trading system used in the 1980's and 1990's by the Paris Bourse in France. This system gave way to the Nouveau Systeme de Cotation (NSC) in 2000, but the... read more

 
COUNTER

A part-ownership of a company. The ownership of companies is divided into individual shares which, if the company is listed on the JSE, can... read more

 
COUNTER PARTY

One of the participants in a financial transaction. This term is typically used when speaking of foreign exchange (FX) transactions.

 
COUNTER PARTY RISK

The risk that the other party to a securities transaction will not fulfil their obligations. In other words, if you are buying and the seller will not supply... read more

 
COUNTER TREND

A period in a price chart showing movement opposite to the direction of the prior time period. Also called a "retracement" or sometimes a "counter... read more

 
COUNTERMOVE

A period in a price chart showing movement opposite to the direction of the prior time period. Also called a "retracement" or sometimes a "counter... read more

 
COVENANT

An agreement reached by a company with its creditors for the repayment of principal and interest on its outstanding debts. Debt... read more

 
COVER

Purchasing back a contract sold earlier. For example, if a share is sold short, the short seller is exposed until he buys back sufficient shares... read more

 
COVERED OPTION

A short call option or put option position which is covered by the sale or purchase of the underlying futures contract or physical... read more

 
COVERED WRITE

Writing a call option against a long position in the underlying security. By receiving a premium, the writer intends to realize additional... read more

 
COVID-19

In January of 2020, the World Health Organisation confirmed a corona virus (SARS-CoV-2) as the causative agent of coronavirus disease 2019. (COVID-19). By June... read more

 
CPI

The measure of the degree to which the currency of a country is losing purchasing power over time through inflation. In South Africa, the... read more

 
CPI-X

The consumer price index excluding the effect of interest rate changes. This is the number that the Reserve Bank uses in their inflation targeting.... read more

 
CPO

An individual or organisation which operates or solicits funds for a commodity pool. A CPO is generally required to be registered with the CFTC.

 
CRASH
A sudden fall in stock market prices, sometimes in a single trading day, and which is usually followed by a bear trend.  This happens generally because market prices have risen to unrealistically... read more
 
CRASH

A significant and sudden fall in the total market. In general, anything less than a 20% fall in the market as a whole is regarded as a correction... read more

 
CREDIT ACTIVE

This term is used to describe a consumer who makes use of credit in various forms. In South Africa, about 25m people are credit active - and over 40% of those... read more

 
CREDIT LOSS RATIO

This is a banking ratio which is the total impairment losses as a percentage of total loans and advances. This shows how much the bank... read more

 
CREDITORS

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

 
CRISA

Developed by the Institute of Directors, this code is similar to the "Principles of Responsible Investing" which is backed by the United Nations and was... read more

 
CRITICAL MASS
In the share market this refers to a company's size and its ability to achieve economies of scale in its production. Smaller companies are often at a disadvantage because they do not have the... read more
 
CRN

This is a 16-digit number consisting of 8 numbers followed by 2 letters and then a further 6 numbers which is given to identify each company and limited... read more

 
CROSS HOLDING
A cross holding occurs where two closely connected companies own shares in each other. This often happens when a subsidiary company owns shares in its parent company.... read more
 
CROSS MARKETING
Where one company or division within a group markets its products to the clients of another company or division in the group. This creates some synergies and reduces the cost of marketing.... read more
 
CROSS RATE

The exchange rate between any two currencies that are considered non-standard in the country where the currency pair is quoted. For example, in the... read more

 
CROSSED MARKET
Where a quoted bid price is higher than the offer price for a security.
 
CRYPTOCURRENCY

A digital or virtual currency used as a medium of exchange using cryptography for security, transactional accuracy, creation and verification. These currencies... read more

 
CSD

The role of a central depository is to maintain records of all purchases and sales of securities on organised exchanges within the country. In South... read more

 
CSDP

A CSDP is a person authorised to perform custodial, administrative or settlement duties. The central securities depository (CSD) in South Africa is known... read more

 
CTA

A person who, for compensation or profit, directly or indirectly advises others as to the advisability of buying or selling futures or commodity... read more

 
CTSE

Previously the 4 Africa Exchange (4AX), the Cape Town Stock Exchange began operations as a South African stock exchange in March 2017. To differentiate... read more

 
CUM DIV

Shares are said to be "cum div" in the period between declaration of the dividend and the last day to trade. A sale of shares while they are "cum... read more

 
CUMULATIVE PREFERENCE SHARE

A preference share accumulates its dividend in the event of the preferential dividend being passed for one or more years. Preferential dividends... read more

 
CUP AND HANDLE

An accumulation pattern observed on bar charts. The pattern lasts from seven to 65 weeks; the cup is in the shape of a "U" and the handle... read more

 
CURATORSHIP

The safeguarding and management of the financial affairs and estate of another person because they are incapacitated by their absence or because they are incapable... read more

 
CURB

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

 
CURRENCY

A medium of exchange used as a store of value or in the commercial exchange of value between persons or organisations. Historically, currencies were physical commodities... read more

 
CURRENCY BACKING

A hard asset, usually gold, that is used to back a national currency. Originally when paper money was first used, these were certificates... read more

 
CURRENCY CROSS

An exchange rate between the traded currencies of two countries. Thus the US dollar/euro, the pound/rand and the yen/dollar are all currrency crosses... read more

 
CURRENCY FUTURE
A contract to exchange one currency for another at a specific future date (the expiration date) and at a specified rate (the exchange rate). More than most derivatives, foreign exchange futures... read more
 
CURRENT ACCOUNT

This is an element of the balance of payments (BOP) toegther with the capital account. It shows a country's trade in goods and services... read more

 
CURRENT ASSET

An item on a balance sheet which includes any assets which can easily be turned into cash (have high liquidity) and which will only be held... read more

 
CURRENT LIABILITY

Any liability that must be paid within a year from the date of the balance sheet. These are mainly amounts owed by the company, which must... read more

 
CURRENT RATIO

The ratio of current assets to current liabilities. The objective of this ratio is to determine whether the company can meet its short-term... read more

 
CUSIP

The number assigned by the Committee of Uniform Security Identification Procedure that appears on all securities documents. Each security is given a number... read more

 
CUSTODY AND ADMINISTRATION OF SECURITIES ACT (85 OF 1992)

An Act which dealt with the transition from an open-outcry share market with physical share certificates to an electronic market with dematerialised... read more

 
CUTOFF FREQUENCY
A point where higher frequency cycles will not pass through a filter (e.g., a 10-day simple moving average will eliminate cycles of 20 days or less).
 
CYCLE

Shares, industries and markets move in cycles. There are three types of cycles: primary, secondary and daily fluctuations. Primary trends last from... read more

 
CYCLICAL

A cyclical share is one which is heavily impacted by the business cycle. When the economy is going through a slow growth period (a recession)... read more

 
CYCLICAL SHARES

A cyclical share is one which is heavily impacted by the business cycle. When the economy is going through a slow growth period (a recession)... read more