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.
| N SHARES |
These are shares which rank in all respects equally to other ordinary shares except that they have an extremely low par value. Since the voting... read more |
| NAKED PUT |
The writer of a put option contract who is not short the underlying security. |
| NARROW RANGE DAY |
A trading day with a smaller price range relative to the previous day's price range. |
| NARROW-BASED STOCK INDEX |
Broad-based stock indices, such as the S&P 500, are defined as a basket of securities where the weight of any single constituent cannot be greater than 30% and the weight of the five largest... read more |
| NASDAQ |
National Association of Securities Dealers Automated Quotation System. This is an over-the-counter equity market in America. It provides a trading platform where mostly technology and communications... read more |
| NATIONAL CREDIT ACT |
This Act (34 of 2005) legislates the finding and providing of credit facilities to the public. It covers all aspects of the extension of credit including insurances, penalties, interest compounding.... read more |
| NATIONAL DEBT |
This is the difference between government revenue and expenditure. Typically, governments spend more than they receive from taxes and other types... read more |
| NATIONAL ECONOMIC DEVELOPMENT AND LABOUR COUNCIL |
On its website the National Economic Development and Labour Council (NEDLAC) describes itself as, "the vehicle by which Government, labour, business and community organisations will seek to cooperate,... read more |
| NATIONAL EMPOWERMENT FUND |
A state owned enterprise (SOE) established in terms of the National Empowerment Act (105 of 1998) for the express purpose of promoting and facilitating black economic participation in the economy... read more |
| NATIONAL ENERGY REGULATOR |
The national Energy Regulator of South Africa (NERSA) is responsible for overseeing the various energy sources in the South African economy. This means that NERSA has to approve price increases... read more |
| NATIONAL FUTURES ASSOCIATION |
Authorized by the US Congress in 1974 and designated by the CFTC in 1982 as a "registered futures association," NFA is the industry-wide self-regulatory organization of the futures industry in... read more |
| NATIONAL HEALTH INSURANCE |
The NHI is based on the constitutional right of every person to have a basic minimum level of health care, irrespective of their ability to pay for it. At the moment, about 16% of South Africans... read more |
| NATIONAL TREASURY |
The National Treasury falls under the Ministry of Finance and is established in terms of section 13 of the Constitution to manage the government's finances. Through the Treasury the country's... read more |
| NATIONALISATION |
The taking over of privately owned assets, especially companies, by the government. In a mixed... read more |
| NATUONAL CREDIT REGULATOR |
An impartial body established in terms section 12 of the National Credit Act (34 of 2005) whose function (in terms of section 13) is to "promote and support the development, where the need exists,... read more |
| NATURAL GAS |
Natural gas is a clean burning hydrocarbon, producing far less carbon dioxide and air pollutants compared to coal, when used to generate electricity. It is abundant, there are estimated... read more |
| NATURAL PERSON |
The law distinguishes between natural and juristic persons. A natural person is an individual of flesh and blood, while a juristic person is a corporation established in terms of the Companies... read more |
| NATURAL RESOURCES |
The natural resources of a country are those resources which exist in nature - its minerals and agricultural potential. Some countries are richly endowed with both agricultural resources and... read more |
| NATURE OF BUSINESS |
The type of business which a company conducts. The JSE divides listed companies into sectors and sub-sectors, but in truth it is difficult to categorise certain companies because they have a... read more |
| NAV |
The company's assets minus its liabilities divided by the total number of shares in issue. Investors like to compare the current share price with... read more |
| NCD |
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 |
| NEAR CASH |
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 |
| NEAR EQUITIES |
These are classes of securities which share some of the characteristics of ordinary or equity shares. For example, a participating preference share shares to some extent in the ordinary dividend... read more |
| NEAR MONOPOLY |
A company which has almost 100% of a particular market. True monopolies almost never exist in capitalist economies. There are always competitors and substitutes which prevent companies from gaining... read more |
| NEAR-MONTH CONTRACT/FAR-MONTH CONTRACT |
A futures contract whose expiration is near/far. |
| NEAR-THE-MONEY |
An option with a strike price close to the current price of the underlying tradable. |
| NEARBY DELIVERY MONTH |
The futures contract month closest to expiration. Also referred to as the Spot Month. There are four futures close-outs each year - at the end of March, June, September and December. The nearest... read more |
| NECKLINE |
A trendline drawn along the support or resistance points of various reversal and consolidation pattern (i.e., head and shoulder, double and triple top/bottom formations). A break down through... read more |
| NEDLAC |
On its website the National Economic Development and Labour Council (NEDLAC) describes itself as, "the vehicle by which Government, labour, business and community organisations will seek to cooperate,... read more |
| NEGATIVE AMORTISATION |
This means that a payment of the stated size is insufficient to repay even the interest on the debt, meaning the total debt actually increases each month instead of falling. |
| NEGATIVE DIRECTIONAL INDICATOR |
An indicator developed by Welles Wilder and used as a component in the calcuation of his "average directional movement index". The negative directional indicator is designed to determine the... read more |
| NEGATIVE DIVERGENCE |
When two or more averages, indices or indicators fail to show confirming trends. |
| NEGOTIABLE CERTIFICATE OF DEPOSIT (NCD) |
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 |
| NEPAD |
This is an agency of the African Union which aims to, "a) Coordinate and Execute priority regional and continental projects to promote regional integration towards the accelerated realisation... read more |
| NERSA |
The national Energy Regulator of South Africa (NERSA) is responsible for overseeing the various energy sources in the South African economy. This means that NERSA has to approve price increases... read more |
| NET ADVANCE/DECLINE |
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 |
| NET ASSET VALUE |
The company's assets minus its liabilities divided by the total number of shares in issue. Investors like to compare the current share price with... read more |
| NET CURRENT ASSETS |
The difference between current assets and current liabilities. In most healthy companies, this difference will be positive, so that the company is always able to meet its short-term creditors... read more |
| NET DEBT/EBITDA RATIO |
The ratio of a company's debt to its earnings before interest, taxation, depreciation and amortisation (EBITDA).... read more |
| NET FOREIGN ASSETS |
Assets held outside of a country minus its foreign liabilities. In South Africa, most foreign assets are held by companies which are required to disclose them by law. The value of South Africa'... read more |
| NET INCOME |
The earnings of an organisation after deducting taxation and all other expenses. This is obviously an important measure of a company's performance, but one should remember to allow for the inflation... read more |
| NET MARGIN |
This is the ratio of net income to revenue in a company. Obviously, you want this "margin" to be as high as possible. Clearly, you dont want to see this margin declining over time in the shares... read more |
| NET OPEN FORWARD POSITION |
This is the state of the Reserve Bank's forward book in the foreign currency market. In the past, the Reserve Bank ran a substantial deficit on the forward book which reached as much as US$25bn... read more |
| NET OPERATING INCOME |
Used to measure real estate investments, this calculation is done by subtracting all operating expenses from revenue generated from property. Revenue generated may... read more |
| NET PRESENT VALUE |
The current value of a future sum of money or stream of incomes. Thus if you are looking at share and after some analysis you decide that it will pay a dividend of 100c in a year's time, then... read more |
| NET PROFIT MARGIN |
This is the ratio of net income to revenue in a company. Obviously, you want this "margin" to be as high as possible. Clearly, you dont want to see this margin declining over time in the shares... read more |
| NET WORTH |
The value of the assets of a company less the value of its liabilities. It is common to hear investors saying, "A particular share is trading at 20% below net worth". What they mean is that if... read more |
| NEW CAPITAL FRAMEWORK |
An agreement between the major countries of the world on the standards to be applied to their major banks so as to minimise the risk of a bank collapse... read more |
| NEW ISSUE |
A listing of a new security or an issue of more shares in an already listed security. Usually, if a company wants to raise additional capital they will do so by way of a right issue to their... read more |
| NEW LISTING |
The acceptance of a company's shares for trading on the Johannesburg Stock Exchange (JSE). New listings usually occur when the economy and the market are buoyant. In recessionary times, investors... read more |
| NEW ORDER MINING RIGHTS |
The Minerals and Petroleum Resources Development Act (MPRDA - 28 of 2002) makes the state the custodian of mineral rights in South Africa. Anyone who wishes to exploit those minerals (including... read more |
| NEW PARTNERSHIP FOR AFRICAN DEVELOPMENT |
This is an agency of the African Union which aims to, "a) Coordinate and Execute priority regional and continental projects to promote regional integration towards the accelerated realisation... read more |
| NEW YORK STOCK EXCHANGE |
The biggest stock exchange in the world, located in New York City with a market capitalisation of about $18 trillion. The S&P500 index shows an average of the... read more |
| NEWGOLD |
The is an ABSA EFT which tracks the rand price of gold. It is the equivalent of buying krugerrands, but with the advantage that there is no security risk and the ETFs can be easily sold and bought.... read more |
| NEWRAND |
This is an ABSA ETF which includes the major rand-hedge shares traded on the JSE. The fund is being closed because it is no longer viable due to insufficient investment. |
| NEXT IN FIRST OUT |
A method of valuing stock at its replacement cost. So existing stock is valued at what it would cost to replace rather than the the price paid for it. This method of stock valuation is usually... read more |
| NFA |
Authorized by the US Congress in 1974 and designated by the CFTC in 1982 as a "registered futures association," NFA is the industry-wide self-regulatory organization of the futures industry in... read more |
| NHI |
The NHI is based on the constitutional right of every person to have a basic minimum level of health care, irrespective of their ability to pay for it. At the moment, about 16% of South Africans... read more |
| NICKEL |
A mineral with the chemical symbol "Ni". Nickel oxidises slowly and only very small quantities are found in nature and is most commonly found in iron pentladite and with sulphur. Australia and... read more |
| NIKKEI INDEX |
The main stock exchange index from Tokyo in Japan. The Nikkei is an average of the 225 largest companies trading on the Tokyo stock exchange - weighted for their market capitalisations in yen.... read more |
| NIL-PAID LETTERS |
A security which is temporarily listed on the stock exchange and which represents the right to take up the shares of a certain company at a certain price... read more |
| NINETY ONE LIMITED |
20 - 07 - 2020 Ninety-One is an asset management company spun out of Investec and separately listed on Monday 16th March 2020. The listing occurred just as the corona epidemic was causing... read more |
| NINJA BOND |
This is a term coined for home loans that were granted, mostly in America, where the bond-holder had almost no credit rating at all. The term stands for "No Income, No Job and No Assets". After... read more |
| NOI |
Used to measure real estate investments, this calculation is done by subtracting all operating expenses from revenue generated from property. Revenue generated may... read more |
| NOISE |
An incorrect interpretation of the market due to daily price and volume fluctuations. Volatility in the market can be smoothed out with a moving average. Usually the smaller the time period under... read more |
| NOMAD |
This term (abbreviated to "nomad") refers to a person or firm that is appointed to assist a company that has recently listed onto the London Stock Exchange's Alternative Investment Market (AIM).... read more |
| NOMINAL RETURN |
The return on an investment before taking the effect of inflation into account. Thus, if an investment is purchased for 1000c and sold a year later for 1100c with a 50c dividend, the return is... read more |
| NOMINAL VALUE |
The nominal value of an investment is its value "on paper". Usually, investments over any period of time are evaluated on their "nominal" and their "real" return. The real return is the nominal... read more |
| NOMINAL YIELD |
The return on an investment before taking the effect of inflation into account. Thus, if an investment is purchased for 1000c and sold a year later for 1100c with a 50c dividend, the return is... read more |
| NOMINATED ADVISOR |
This term (abbreviated to "nomad") refers to a person or firm that is appointed to assist a company that has recently listed onto the London Stock Exchange's Alternative Investment Market (AIM).... read more |
| NOMINEE |
A person or company nominated to perform some function on behalf of a principal. In the share market, the nominee typically registers shares in its name on behalf of the principal. Usually the... read more |
| NON CONFIRMATION |
Today, there are literally hundreds of line technical indicators each of which represents a different mathematical formulae and trading idea. Technicians usually use several indicators, looking... read more |
| NON DISCRETIONARY STOCKBROKING ACCOUNT |
A stockbroking account where the client must make all the decisions about what to buy and sell and when to do it. A discretionary account allows the stockbroker complete control of the portfolio.... read more |
| NON-CASH ITEM |
An accounting term which refers to entries in the books of account which do not reflect the movement of money. The most common example is depreciation where the full cost... read more |
| NON-CONTROLLED CLIENT |
This is a person who decides to invest directly without going through a stockbroker. Such a person must appoint a a Central Securities Depository Participant (CSDP) to act for them. Most people... read more |
| NON-CONTROLLING INTEREST |
This is a significant shareholding (usually above 5%) which does not allow the shareholder to control the company but which affords him/her influence and often a position on the board of directors.... read more |
| NON-CORE |
A division or subsidiary of a company is regarded as non-core if it does not contribute to the main business of the company. Such subsidiaries or divisions are usually either closed down or sold... read more |
| NON-CUMULATIVE |
A term used to describe preference shares which do not accumulate their dividends. Most preference shares are cumulative in that if the company does not pay the preference dividend... read more |
| NON-CURRENT LIABILITIES |
A debt, which is to be repaid over years rather than months. A good example of this would be debentures, which carry a fixed percentage return and are redeemable by the company at some future... read more |
| NON-DISTRIBUTABLE RESERVE |
A concept from the old Companies Act which referred to that portion of accumulated shareholders' equity which could not be distributed in the form of dividends. The new Companies Act (71 of 2008)... read more |
| NON-EXECUTIVE DIRECTOR |
A director who is not employed by the company and has no employment contract. An executive director has an employment contract and works directly for the company. The Companies... read more |
| NON-FARM PAYROLL |
An economic statistic from America which includes all employees in America except for farm workers, employees of non-profit organisations (like charities) and household employees. The increase... read more |
| NON-FUNGIBLE |
The tradability of an asset, usually on an organised exchange. The ability to easily sell an asset can have a significant impact on its value. For example, the shares of companies listed on the... read more |
| NON-REDEEMABLE |
A term used to describe preference shares which cannot be redeemed by the company. Some preference shares are redeemable on a certain specified date - which means that they are... read more |
| NON-RESIDENT SHAREHOLDER |
This is an entity outside of South Africa who holds shares in a company which is resident in South Africa. Such share certificates must, within 30 days of their acquisition be endorsed "non-resident"... read more |
| NON-RESIDENT SHAREHOLDERS' TAXÂ |
This is an entity outside of South Africa who holds shares in a company which is resident in South Africa. Such share certificates must, within 30 days of their acquisition be endorsed "non-resident"... read more |
| NON-TREND DAY |
A narrow range day lacking any discernible movement in either direction. |
| NON-VOTING SHARES |
Shares which cannot vote at shareholder meetings. In general, the people who contribute capital to a business have the right to vote in direct proportion to the amount of capital contributed.... read more |
| NONLINEAR STATISTICS |
Statistics theory that attempts to define probability distribution from disorder to either a more orderly state or a sharp trend reversal, such as stock market fluctuations. |
| NORMALISED EARNINGS |
The profit of a company adjusted to eliminate the effect of seasonality. Some company's are very seasonal and get most of their income in one period during the calendar year. A good example is... read more |
| NORTH SEA BRENT OIL |
North Sea oil controlled by the UK and Norway. This type of oil is generally traded at a slight premium to West Texas light sweet crude. Oil is a key component of world inflation... read more |
| NOT HELD |
An order submitted to a brokerage firm with the understanding that it will use its best efforts to execute the order according to the customer's instructions, but the broker may not be held responsible... read more |
| NOTES TO THE ACCOUNTS |
These form part of the annual financial statements of a company. They supply more information on the figures contained in the financial accounts, according to the requirements of the Companies... read more |
| NOTICE DAY |
The day that a notice of intent to deliver is issued to a futures contract holder. |
| NOTICE OF INCORPORATION |
A form (CoR14.1) which must be completed and submitted to the Companies and Intellectual Property Commission (CIPC) when applying for a company to be registered. The form must be accompanied... read more |
| NO–LOAD |
Without any sales charge. For mutual funds, shares sold at net asset value. |
| NUMBER OF DEALS |
One of the pieces of information supplied by the JSE for each listed company after each trading day. There are no indicators which utilise this piece of information, but it can be useful to distinguish... read more |
| NUMISMATIC |
The study of coins, paper money and medals and the subsequent value that results from their rarity. In other words, coins which have numismatic value are worth more than the metal which they... read more |
| NY1 |
20 - 07 - 2020 Ninety-One is an asset management company spun out of Investec and separately listed on Monday 16th March 2020. The listing occurred just as the corona epidemic was causing... read more |
| NYSE |
The biggest stock exchange in the world, located in New York City with a market capitalisation of about $18 trillion. The S&P500 index shows an average of the... read more |
| NYSE AMERICAN |
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 |