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.
| DAILY DEALS |
One of the pieces of information supplied by the JSE for each listed company after each trading day. There are no indicators... read more |
| DAILY FLUCTUATIONS |
Charles Dow in his "Dow Theory" proposed that share prices, and especially indexes, move in three distinct patterns -... read more |
| DAILY RANGE |
The difference between the high and low price during one trading day. This range shows the degree of uncertainty prevailing... read more |
| DARK CLOUD COVER |
A top reversal candlestick formation which consists of a long green candle followed by a red candle. Confirmation of this signal would... read more |
| DARK POOL LIQUIDITY |
Trade which takes place between institutional investors on private confidential exchanges which are not open to the public. Institutions do this... read more |
| DATA MINING |
The process of using super-computers to sift through the massive quantities of data produced every day by the securities markets to establish potentially... read more |
| DATA PREPROCESSING |
Altering data to some extent to be more accurately analysed; smoothing, reducing unwanted data, removing trend. Processing data is mathematically transforming... read more |
| DATA SMOOTHING |
Removing the variability and market noise in a chart to reveal the correct underlying trend. This can be done by using a moving average, among other mathematical algorithms. |
| DATA STREAM |
A data stream is any continuous flow of end-of-day financial data which can be displayed as a chart. The most common forms of this are the end-of-day... read more |
| DATE ISSUE CLOSES |
The date on which a rights issue closes. A rights issue is a corporate action in terms of which a company issues additional shares... read more |
| DATE OF DECLARATION |
The date on which a dividend is declared by a company's board of directors once they have seen the results from the interim... read more |
| DATE OF FOUNDING |
The date on which a company was founded. You should bear in mind that this date is often long before the date that the company was listed on the... read more |
| DATE OF INCORPORATION |
The date on which a company was granted its certificate of incorporation by the Companies and Intellectual Property Commission (CIPC). Every company... read more |
| DATE OF LISTING |
The date on which a company was listed on the JSE. Most listing are accompanied by an initial public offer (IPO) whereby the company... read more |
| DATE OF PAYMENT |
One of the dates associated with the payment of a dividend by a listed company. The dates are the date of declaration when the board... read more |
| DATE OF RECORD |
The date on which a dividend payout or rights issue is based. These "corporate actions" apply to shares which are in the company register... read more |
| DAVID LI |
A Chinese actuary and quantitative analyst who is best known for his application of gaussian copulas for securitised mortgage bonds leading to the... read more |
| DAX |
This is a simple index of the thirty largest shares trading on the German stock exchange, based in Frankfurt. The DAX is a Paasche index which... read more |
| DAY ORDER |
An order that, if not executed, expires automatically at the end of the last trading session on the day it was entered. |
| DAY'S MOVE |
The extent to which a share moves during the course of the trading day on the Stock Exchange. You will find the day's move quoted as a separate... read more |
| DBSA |
This is a state-owned enterprise which focuses on supporting projects which will enhance the standard of living and infrastructure of South Africa... read more |
| DCM |
A division of the JSE which was folded into the Alt-X. This division was originally for smaller companies requiring less capital and no history of profits.... read more |
| DE-LISTING |
The removal of a security from an organised exchange - after which it can no longer be traded on that exchange. This typically happens in the share... read more |
| DEAD CAT BOUNCE |
A rebound in a market that sees prices recover from a very sharp fall and come back up somewhat. Usually this occurs during a bear market... read more |
| DEAL |
In the context of the share market this means a transaction whereby shares are exchanged for cash, either in the primary market or the secondary... read more |
| DEALER |
An individual or firm acting as a principal or counterparty to a transaction. Principals take one side of a position, hoping to earn a spread (profit) by closing... read more |
| DEALING COSTS |
The costs of trading in shares are brokerage - which varies according to the stockbroker you are dealing through, STRATE settlement... read more |
| DEATH CROSS |
In technical analysis when the 50-day moving average crosses down through the 200-day moving average on any data stream (i.e. a share, commodity,... read more |
| DEBASEMENT |
The reduction of a commodity currency by adding a base metal - such as lead. During the time of the Roman empire, periodically the gold coins... read more |
| DEBENTURE |
This is a form of long-term loan. A company issues debentures, usually at R1000 each, at a fixed percentage return. Debentures are then redeemable... read more |
| DEBIT BALANCE |
A stockbroking account with no positions and a negative adjusted total equity. A debit balance typically arises as a result of a trader losing... read more |
| DEBSWANA |
Debswana Mining Company Limited (Debswana) is a 50/50 joint venture formed in 1969 between the government of Botswana and De beers. De beers is 85% owned by Anglo... read more |
| DEBSWANA DIAMOND MINING COMPANY LTD |
Debswana Mining Company Limited (Debswana) is a 50/50 joint venture formed in 1969 between the government of Botswana and De beers. De beers is 85% owned by Anglo... read more |
| DEBT |
Money owed by one person (natural or juristic) to another. Debt which is expected to be repaid within normal commercial periods of 30, 60 or 90 days is... read more |
| DEBT CEILING |
A debt ceiling is a legally imposed limit to the amount of debt which the treasury of a country can uncur. In America the constitution (article 1,... read more |
| DEBT COVENANT |
An agreement reached by a company with its creditors for the repayment of principal and interest on its outstanding debts. Debt... read more |
| DEBT INSTRUMENT |
A form of long-term debt whereby the borrower agrees to pay the lender annual interest (the "coupon") until the debt is settled or converted into... read more |
| DEBT LIMIT |
A debt ceiling is a legally imposed limit to the amount of debt which the treasury of a country can uncur. In America the constitution (article 1,... read more |
| DEBT MORATORIUM |
A period of grace on the repayment of debt and the interest due on it. If a company is placed under business rescue, then it is immune... read more |
| DEBT TO GDP RATIO |
This refers to the ratio between a country's government debt and its Gross Domestic Product (GDP). A low debt to GDP ratio suggests that a... read more |
| DEBT TO INCOME RATIO |
This is the ratio of an individual's monthly debt repayments and other expenses to their gross income. In South Africa, we have an average... read more |
| DEBT TRAP |
A debt trap is when a borrower is in a cycle of re-borrowing or rolling over their debt. This can occur because of high interest rates or because... read more |
| DEBT/EBITDA RATIO |
The ratio of a company's debt to its earnings before interest, taxation, depreciation and amortisation (EBITDA).... read more |
| DEBT/EQUITY RATIO |
The ratio of shareholders' equity in the company (share capital and reserves) to the company's borrowing. The company... read more |
| DEBTOR |
An item on the balance sheet which shows the amount the company is owed, and which is to be paid over the short term. It is common for companies... read more |
| DEBTORS DAYS OUTSTANDING RATIO |
The average number of days that it takes for a company to collect its debts. This can be calculated by dividing the company's debtors (accounts receivable)... read more |
| DEBTORS' BOOK |
A debtors' book is a collection of all the receivable invoices, i.e the cash that is due or owing to a business from it's clients. |
| DEBTORS' BOOK |
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 |
| DECLARATION DATE |
The date on which a dividend is declared by a company's board of directors once they have seen the results from the interim... read more |
| DEEP-IN-THE-MONEY |
A deep-in-the-money call option has the strike price of the option well below the current price of the underlying instrument. A deep-in-the-money... read more |
| DEFAULT |
... read more |
| DEFENSIVE SHARES |
Some JSE-listed companies perform well even in a recession and they are known as "defensive shares". Typically they are in sectors... read more |
| DEFERRED DELIVERY MONTH |
The distant delivery months in which futures trading is taking place, as distinguished from the "nearby" futures delivery month which refers to the next futures... read more |
| DEFERRED SHARE |
This is a share which has even less rights than an ordinary share. Preference shares receive their dividends and payments on liquidation... read more |
| DEFERRED TAXATION |
When a company computes income tax expense, it bases that computation on taxable income per the Income Statement. The income taxes... read more |
| DEFICIT |
This is the difference between government revenue and expenditure. Typically, governments spend more than they receive from taxes and other types... read more |
| DEFLATION |
The opposite of inflation. A period where the purchasing power of money increases in terms of a basket of goods and services. |
| DEFLATIONARY CRASH |
A crash which is caused or exacerbated by a shortage of money within the economy. There has only been one deflationary crash in recorded history... read more |
| DELAYED PRICES |
Market quotations which are delayed by the various futures exchange's required time period, usually 10-20 minutes. The JSE provides... read more |
| DELAYED QUOTES |
Market quotations which are delayed by the various futures exchange's required time period, usually 10-20 minutes. The JSE provides... read more |
| DELEVERAGED |
The opposite of "geared". Gearing in companies refers to the relationship between their borrowings and their equity. An ungeared company is one that has no debt. The... read more |
| DELINQUENT DIRECTOR |
This refers to a director of a company that has done something in contradiction of the Companies Act. Directors are expected to act in the... read more |
| DELIVERY |
The transfer of the cash commodity from the seller of a futures contract to the buyer of a futures contract. Each futures exchange has specific... read more |
| DELTA |
The amount by which the price of an option changes for every dollar move in the underlying instrument. |
| DEMAND |
An economics term which refers to the extent to which a good or service is needed in the economy. When the good or service is widely needed... read more |
| DEMAND INDEX |
... read more |
| DEMATERIALISATION |
The replacement of physical share certificates with an electronic record. In South Africa this record is maintained by STRATE (Share TRAnsactions... read more |
| DEMATERIALISED SCRIP |
... read more |
| DEMERGER |
The breaking up of a company into smaller component companies. This is usually done to improve focus and to give each operating unit autonomy over decision... read more |
| DEMURRAGE |
This was originally a cost of not off-loading a chartered ship within an agreed time period. Shipping charters typically include an amount of "laytime" which is... read more |
| DEPENDENCE |
In modern portfolio theory the central concept is that share prices are impossible to predict because there is no "dependence" between today's... read more |
| DEPRECIATION |
The process of charging the value of a fixed asset against the company's profits at the same rate at which it is expected to wear out or become... read more |
| DEPRESSION |
A economic term which refers to an extended period of very low economic activity. A depression is considerably worse and deeper than a recession. Recessions... read more |
| DEPTH OF THE MARKET |
The depth of the market for a particular share is a display of the best three bids and the best three offers for that share which have... read more |
| DERIVATIVE |
A financial instrument, traded on or off an exchange, the price of which is directly dependent upon the value of one or more underlying securities,... read more |
| DESIGNATED ADVISOR |
When a company wishes to list on the Alt-X market it must appoint a designated advisor. The main role of a Designated Adviser is to... read more |
| DESTOCKING |
The reduction in a company's inventory levels. Inventory or stock is a part of a company's working capital and as such it means money tied... read more |
| DETREND |
To remove the general drift, tendency, or bent of a set of statistical data as related to time. |
| DEUTSCHER AKTIENINDEX |
This is a simple index of the thirty largest shares trading on the German stock exchange, based in Frankfurt. The DAX is a Paasche index which... read more |
| DEVALUATION |
The reduction of a currency's value in a fixed exchange rate system. Most currencies are allowed to float and are freely traded with market... read more |
| DEVELOPING COUNTRY |
An economy which is in a development phase - as opposed to a first-world economy which is said to be fully developed. Emerging economies generally... read more |
| DEVELOPMENT BANK OF SOUTHERN AFRICA |
This is a state-owned enterprise which focuses on supporting projects which will enhance the standard of living and infrastructure of South Africa... read more |
| DEVELOPMENT CAPITAL MARKET |
A division of the JSE which was folded into the Alt-X. This division was originally for smaller companies requiring less capital and no history of profits.... read more |
| DIAGONAL SHARE |
A share whose price chart goes from the bottom left-hand corner to the top right-hand corner. There are very few shares which can be described... read more |
| DIAMOND |
A solid crystalline form of carbon with the greatest hardness and heat conductivity of any natural substance. Diamonds have both industrial and jewellery use.... read more |
| DIFFUSION INDEX |
An index that measures how many shares are positive or increasing in price. It can be used to tell the underlying strength of the market,... read more |
| DILUTED HEADLINE EARNINGS PER SHARE |
This is headline earnings per share (HEPS) calculated using the number of shares in issue at the end of the financial period rather than the... read more |
| DILUTION |
In the context of the share market, dilution occurs when a company issues additional shares without receiving commensurate earnings... read more |
| DIRECT COST |
A cost in the books of a company which increases and decreases with their sales level. The main variable cost (also known as a "direct cost") is cost of sales. The cost of... read more |
| DIRECTIONAL MOVEMENT INDEX (DMI) |
Developed by J. Welles Wilder, DMI measures market trend. The concept of Directional Movement is based on the assumption that in an upward trend... read more |
| DIRECTOR |
All public companies are required to have at least two directors and all private companies at least one. The directors are appointed (and confirmed... read more |
| DIRECTOR DEALINGS |
The directors of a company are allowed to deal in the shares of their company, but in terms of the JSE rules, they must... read more |
| DIRECTORATE OF MARKET ABUSE (DMA) |
The DMA was formed in terms of the Insider Trading Act (135 of 1998) to investigate and take legal action where appropriate in cases of financial market... read more |
| DIRECTORS' REPORT |
The Companies Act requires companies to put before the Annual General Meeting (AGM) a directors' report with respect to the state of affairs of the... read more |
| DISCLAIMED 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 |
| 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 |
| DISCLOSURE |
The concept of disclosure is entrenched in the Companies Act. The Act is concerned to ensure that shareholders are properly informed of all the information... read more |
| DISCONTINUED OPERATIONS |
Companies are always trying to be focused on their core business. To achieve this they may decide from time to time that a particular division or... read more |
| DISCOUNT BROKER |
This is a stockbroking firm that does not undertake research into listed companies or give advice. For this reason the dealing costs... read more |
| DISCOUNT WINDOW |
The mechanism by which the central bank provides short-term funds to commercial banks and other eligible institutions. Originally, central banks... read more |
| DISCOUNTED CASH FLOW |
A process whereby a future flow of incomes is reduced to a current value by applying an "internal rate of return" (IRR). For example, if you are... read more |
| DISCOUNTING |
The price of a share is the average of all investors' discounted cash flows of the future dividends of the company. If... read more |
| DISCOURAGED WORKER |
This is an adult person who is part of a country's labour force but who has not been able to find work for an extended period of time. Such people would like to... read more |
| DISCRETIONARY STOCKBROKING ACCOUNT |
An account opened with a stockbroker where the client has entered into an arrangement with the stockbroker that authorises the stockbroker to conduct transactions... read more |
| DISINVESTMENT |
This term is usually applied to investors in South Africa who decide to withdraw their investment. Disinvestment impacts directly on the capital... read more |
| DISPOSABLE INCOME |
The income which is left for a consumer after all his main expenses have been met - such as his rent or mortgage bond repayment, money for food and clothing,... read more |
| DISSENTING SHAREHOLDER |
In terms of the Companies Act, a dissenting shareholder is one who disagrees with a fundamental transaction being contemplated by the majority shareholders.... read more |
| DISSOLVED |
To settle the affairs of a company by selling assets in order to pay creditors also known as a "dissolution". The court, the company itself,... read more |
| DISTRESSED COMPANY |
This refers to a company which does not have sufficient short-term cash flow to meet its immediate expenses. When a company is in "financial distress",... read more |
| DISTRIBUTABLE RESERVES |
A concept from the old Companies Act which aimed to preserve the capital of companies. In terms of that Act, dividends could only be... read more |
| DISTRIBUTED LEDGER TECHNOLOGY |
Distributed Ledger Technology (DLT) is a computer technique which is used to create a completely reliable and and 'unhackable' database. The most common use is... read more |
| DISTRIBUTION |
That portion of a company's earnings which is paid out to shareholders - also sometimes called a "distribution". Most blue chip companies... read more |
| DISTRIBUTION |
|
| DISTRIBUTION AREA |
A sideways to downward market, usually at the top of a bull trend where shares are being sold off by the "smart money"... read more |
| DIVERGENCE |
When two or more averages or indices fail to show confirming trends. |
| DIVERSIFICATION |
The process whereby a company (or individual) spreads its investments among a number of different enterprises so as to reduce its exposure... read more |
| DIVESTITURE |
Companies are always trying to be focused on their core business. To achieve this they may decide from time to time that a particular division or... read more |
| DIVIDEND |
That portion of a company's earnings which is paid out to shareholders - also sometimes called a "distribution". Most blue chip companies... read more |
| DIVIDEND COVER |
The number of times the dividend could be taken out of the earnings. For example, if a company has earnings (profits) of R50 000 and pays... read more |
| DIVIDEND EQUALISATION RESERVE |
A distributable reserve which is specifically set up to ensure that dividends remain stable despite changes in earnings. If a company normally... read more |
| DIVIDEND POLICY |
Most of the larger listed blue chip companies pay two dividends each financial year - an interim and final. They also usually have... read more |
| DIVIDEND REINVESTMENT PLAN |
A program offered by a publicly held company in which dividends are used to buy more shares of the company. This process reduces the number... read more |
| DIVIDEND STRIPPING |
This occurs where a share is bought just before the last day to register (LDR) for its dividend and then sold immediately afterwards. The... read more |
| DIVIDEND WITHHOLDING TAX |
A 20% tax (as per the 2017 budget speech) on dividends paid by all South African taxpayers, but withheld by the company paying the dividend. DWT... read more |
| DIVIDEND YIELD |
Dividends per share expressed as a percentage of the current market price. For example, if a company pays a dividend of R10 000 and it has... read more |
| DIVIDENDS PER SHARE |
The ordinary dividend of a company for the most recent financial year divided by the number of shares in issue. The DPS is calculated... read more |
| DJIA |
Charles Dow was the first person to construct an index. His first index was the "transportation average" which he constructed in 1884 and then maintained... read more |
| DLT |
Distributed Ledger Technology (DLT) is a computer technique which is used to create a completely reliable and and 'unhackable' database. The most common use is... read more |
| DMA |
The DMA was formed in terms of the Insider Trading Act (135 of 1998) to investigate and take legal action where appropriate in cases of financial market... read more |
| DOJI |
A candlestick charting term which describes a trading session in which the opening price and closing price for a share are the same... read more |
| DOJI STAR |
A Doji Star is a trend reversal pattern which is composed of a long black body followed by a doji (a pattern with the same opening and closing... read more |
| DOMESTIC UNIT TRUST |
A unit trust which is focused on investments into the local equity market. In other words, excluding overseas investments. Profile Media has... read more |
| DORE |
An alloy of gold and silver usually created at the mine before being moved to the refinery. Dore is usually cast in bars of bullion. At the refinery... read more |
| DOT COM |
Technology shares, specifically those which deal with internet based products or telecommunications. From 1997 to 1998, these shares did particularly well... read more |
| DOT PLOT |
A chart which shows the opinion/forecast of each member of the US Federal Open Market Committee (FOMC) concerning the future of the federal funds... read more |
| DOUBLE BOTTOM |
The price action of a security or market average where it has declined twice to the same approximate level, indicating the existence... read more |
| DOUBLE COUNTING |
An economics term which means counting the same item twice so producing an erroneous result. This can happen with the calculation of gross domestic product... read more |
| DOUBLE SMOOTHING |
Double smoothing in the context of the share market and technical analysis simply means making a moving average of a moving average. This... read more |
| DOUBLE TAXATION AGREEMENT |
An agreement between two countries the objective of which is to avoid double taxation. For example, South Africa and the UK have a double taxation agreement which... read more |
| DOUBLE TOP FORMATION |
A price pattern seen on a chart at the top of a trend. The pattern occurs when prices rise to a resistance level on significant... read more |
| DOUBTFUL DEBT |
A debt which may not be collectible. Companies usually distinguish between bad debts, which they know they cannot collect, and doubtful debts... read more |
| DOVE |
A member of a country's monetary policy committee (MPC) who is in favour of reducing interest rates to stimulate the economy. The monetary policy... read more |
| DOW CHARLES |
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 |
| DOW JONES INDUSTRIAL AVERAGE |
Charles Dow was the first person to construct an index. His first index was the "transportation average" which he constructed in 1884 and then maintained... read more |
| DOW THEORY |
The Dow Theory was the first technical analysis idea to be invented in Western markets (the Japanese invented candlestick charts much earlier).... read more |
| DOWNSIDE BREAK |
In technical analysis, this occurs where a security's price encounters a support level which prevents it from going lower for a period.... read more |
| DOWNTREND |
A period when the price of a share (index or other security) falls. Normally a downtrend can be clarified with the addition of a downward... read more |
| DOWNWARD TAIL |
A candlestick charting term which refers to the extent to which a share's price trades below its open, in a green candle or... read more |
| DOWNWARD TREND |
A long downward trend in a share's price, a sector's index, the all-market index or other indicator. In general,... read more |
| DOWNWARD TREND |
A period when the price of a share (index or other security) falls. Normally a downtrend can be clarified with the addition of a downward... read more |
| DPS |
The ordinary dividend of a company for the most recent financial year divided by the number of shares in issue. The DPS is calculated... read more |
| DRAGONFLY DOJI |
A candlestick charting term used to describe a type of doji which signifies indecision. The dragonfly doji has a long lower shadow... read more |
| DRAWDOWN |
The reduction in account equity as a result of a trade or series of trades. |
| DTA |
An agreement between two countries the objective of which is to avoid double taxation. For example, South Africa and the UK have a double taxation agreement which... read more |
| DUAL CAPACITY TRADING |
Dual capacity trading was introduced following the deregulation of the JSE in 1995. It means that a stockbroker may act as a principal and as an... read more |
| DUAL LISTING |
This is where a company is listed on two stock exchanges. On the JSE there are dozens of companies which are also listed on at least one other... read more |
| DUE DILIGENCE |
The checking of the books of account of a prospective acquisition to ensure that what was held out by its directors corresponds with the reality.... read more |
| DUMPLING TOP |
A cycle top on a chart which drifts out and down in a gradual loss of momentum. This is as opposed to a "V" top which is very sharp and sudden. Also called an Umbrella Top, a Frying Pan Top,... read more |
| DURABLE GOODS |
Products, offered to consumers, which are expected to last for a considerable period of time and which are generally more highly priced. Examples range from "white... read more |
| DUTY |
The tax paid on the import of foreign-made products into a country according to a specific import tariff. In general, countries try to avoid having too... read more |
| DWT |
A 20% tax (as per the 2017 budget speech) on dividends paid by all South African taxpayers, but withheld by the company paying the dividend. DWT... read more |
| DY |
Dividends per share expressed as a percentage of the current market price. For example, if a company pays a dividend of R10 000 and it has... read more |