Stock Market Terms: PSX Glossary for Beginners in Pakistan
Understanding the stock market terms with the right language. This PSX glossary breaks down key stock market terms so beginners can invest with confidence and clarity.
Term
Meaning
Description
Ability to Pay
A person’s or company’s financial strength to repay debt.
This term measures if someone has enough income or assets to repay their loans or meet financial obligations.
Term
Meaning
Description
Abnormal Returns
Returns that are higher or lower than expected.
These are profits or losses that differ significantly from the market average, often due to news or special events.
Term
Meaning
Description
Accelerated depreciation
A method to reduce asset value faster.
Companies use this to deduct more depreciation in the early years of an asset’s life, helping reduce taxable income.
Term
Meaning
Description
Accommodation
Extra help given by central banks to support markets.
It often refers to lowering interest rates or buying assets to keep the economy running smoothly.
Term
Meaning
Description
Accommodative Monetary Policy
A policy that lowers interest rates to boost the economy.
Central banks use this when they want to encourage borrowing, spending, and investing during slowdowns.
Term
Meaning
Description
Account Day
The date when trade settlements are finalized.
It’s when stock purchases or sales are officially completed between buyer and seller.
Term
Meaning
Description
Account Statement
A summary of financial transactions.
It shows all activities in your brokerage or bank account over a certain period.
Term
Meaning
Description
Account Value
The total value of your investments in an account.
It includes the worth of stocks, cash, and other holdings in your account.
Term
Meaning
Description
Accredited Investor
An investor with high income or assets allowed to invest in special products.
These individuals can access more complex or higher-risk investments not available to the general public.
Term
Meaning
Description
Accrual Bond
A bond where interest builds up and is paid later.
Instead of regular interest payments, all interest is paid at maturity.
Term
Meaning
Description
Accrued Interest
Interest earned but not yet received or paid.
It’s the portion of interest that’s been accumulating since the last payment date.
Term
Meaning
Description
Acid-Test Ratio
A quick way to check if a company can pay short-term bills.
It compares liquid assets (like cash) to current liabilities, without including inventory.
Term
Meaning
Description
ACIETF Index
A specific index representing a group of exchange-traded funds (ETFs).
Tracks the performance of certain ETFs listed on the PSX.
Term
Meaning
Description
Acquisition Cost
The total cost to buy an asset.
It includes the price plus any fees, taxes, or related expenses.
Term
Meaning
Description
Active Fund Management
When fund managers pick stocks to beat the market.
Unlike passive investing, this approach involves frequent trading and research.
Term
Meaning
Description
Active Stocks
Stocks with high trading volume.
These are regularly bought and sold, often due to investor interest or market news.
Term
Meaning
Description
Affiliated Companies
Companies linked by ownership or control.
For example, a parent company and its subsidiary are affiliated.
Term
Meaning
Description
Aggressive Growth Mutual Fund
A fund focused on high-growth stocks.
These funds aim for big gains but usually come with higher risk.
Term
Meaning
Description
Algorithmic Trading
Automated trading using computer programs.
These algorithms follow set rules to buy or sell stocks at high speed.
Term
Meaning
Description
All or None (AON)
A trade that only happens if all shares can be bought/sold at once.
If the full order can’t be filled, none of it is executed.
Term
Meaning
Description
Allocation Scheme
A plan for dividing investments across different options.
It shows how money is spread across assets like stocks, bonds, or funds to reduce risk and improve returns.
Term
Meaning
Description
Alpha
A measure of how much an investment beats the market.
If a stock or fund performs better than its benchmark index, the extra return is called alpha.
Term
Meaning
Description
Alpha Generator
A strategy or tool that produces better-than-market returns.
Portfolio managers or algorithms that consistently deliver alpha are considered alpha generators in investing.
Term
Meaning
Description
Alpha Risk
The chance of making a wrong investment decision.
It’s the risk of thinking an investment will beat the market (positive alpha) when it actually doesn’t.
Term
Meaning
Description
Alphabet Stock
Shares of the same company with different voting rights.
Companies may issue stocks like Class A and Class B, where one may offer more control or benefits than the other.
Term
Meaning
Description
Amortised Bond
A bond where principal is repaid in installments.
Unlike regular bonds that repay all at maturity, amortised bonds return part of the amount with each payment.
Term
Meaning
Description
Anniversary Date
The yearly milestone of an investment or policy.
Used in mutual funds or insurance, it marks when a product was first issued and resets performance tracking.
Term
Meaning
Description
Annual Listing Fee
A yearly payment by companies to remain listed on the exchange.
Public companies pay this fee to the stock exchange to continue trading their shares.
Term
Meaning
Description
Annual Meeting
A yearly gathering of a company’s shareholders.
Investors meet to review performance, vote on decisions, and interact with management.
Term
Meaning
Description
Annual Report
A detailed yearly summary of a company’s performance.
It includes financials, achievements, risks, and future plans for shareholders and the public.
Term
Meaning
Description
Annualized Total Return
The average return earned per year over a period.
It shows how much an investment has grown annually, adjusted for compounding.
Term
Meaning
Description
Annuity
A financial product that pays regular income over time.
Used in retirement planning to provide guaranteed monthly or yearly income.
Term
Meaning
Description
Appraisal Ratio
A metric comparing an investment’s return to its risk.
It helps assess if a fund’s return justifies the risk taken to achieve it.
Term
Meaning
Description
Arbitrage
Profiting from price differences across markets.
Investors buy low in one market and sell high in another to lock in risk-free profits.
Term
Meaning
Description
Arbitrageur
A trader who practices arbitrage.
They profit from small price differences between markets or exchanges.
Term
Meaning
Description
Asset
Anything of value owned by a person or business.
Assets include cash, property, stocks, and anything else with financial value.
Term
Meaning
Description
Asset Allocation
The strategy of dividing investments across asset types.
It balances risk by investing in a mix of stocks, bonds, and cash.
Term
Meaning
Description
Asset Class
A category of similar investment types.
Common asset classes include stocks, bonds, real estate, and cash.
Term
Meaning
Description
Asset Management
Professional management of investments.
Asset managers handle portfolios to help clients grow wealth or meet goals.
Term
Meaning
Description
Asset Management Company (AMC)
A company that manages funds for investors.
They create mutual funds and invest pooled money in the market.
Term
Meaning
Description
Asset Turnover
A measure of how efficiently a company uses its assets to generate revenue.
Higher asset turnover means better use of assets to drive sales.
Term
Meaning
Description
Asset Under Custody
The total value of assets held by a firm for clients.
It shows how much investor wealth is safeguarded by a bank or custodian.
Term
Meaning
Description
Asset Under Management
The total market value of investments managed on behalf of clients.
It reflects how much wealth an asset manager or investment firm controls across all portfolios.
Term
Meaning
Description
Asset-Backed Security
A financial product backed by a pool of underlying assets.
These are backed by loans, credit card debt, or receivables and provide investors with steady income.
Term
Meaning
Description
At-the-Money
An option whose strike price equals the current market price.
There’s no profit or loss if exercised immediately — it’s a neutral point in option trading.
Term
Meaning
Description
Audit
An official inspection of a company’s financial records.
It checks if the statements are accurate, legal, and follow accounting standards.
Term
Meaning
Description
Auditor
A professional who conducts audits of financial records.
They ensure the company’s books are free of errors and compliant with regulations.
Term
Meaning
Description
Authorized Shares
The maximum number of shares a company is legally allowed to issue.
These are approved in the company’s founding documents but may not all be issued immediately.
Term
Meaning
Description
Average Cost
The average price paid per unit of an investment over time.
Used to calculate gains or losses when purchases are made at different prices.
Term
Meaning
Description
Average Maturity
The average time until bonds in a portfolio mature.
Helps assess how sensitive a bond portfolio is to interest rate changes.
Term
Meaning
Description
Averaging Down
Buying more of a stock as its price falls to reduce the average cost.
Investors do this when they believe the stock will eventually rise again.
Term
Meaning
Description
Baby Bonds
Small-denomination bonds typically under $1,000.
Makes bonds more accessible to individual or retail investors.
Term
Meaning
Description
Back Stop
A commitment to buy remaining shares in an offering if others don’t.
Used to guarantee that a new issue is fully subscribed.
Term
Meaning
Description
Back-End Load
A fee charged when exiting a mutual fund.
Usually decreases the longer the investor holds the fund.
Term
Meaning
Description
Backtesting
Applying a strategy to historical data to see how it would’ve performed.
Helps evaluate the reliability of investment models before using them live.
Term
Meaning
Description
Backwardation
A market condition where future prices are lower than current prices.
Common in commodity markets when there’s short-term demand or supply constraints.
Term
Meaning
Description
Badla
A former financing system at PSX for delaying settlement.
Now replaced, it allowed investors to carry forward trades by paying interest.
Term
Meaning
Description
Bag Holder
An investor holding a stock that has dropped significantly in value.
Usually refers to someone who held on too long despite poor performance.
Term
Meaning
Description
Balance Sheet
A financial statement showing a company’s assets, liabilities, and equity.
Provides a snapshot of financial health at a specific point in time.
Term
Meaning
Description
Balanced Fund
A mutual fund investing in both stocks and bonds.
Aims for moderate growth with lower risk by diversifying assets.
Term
Meaning
Description
Bank Rate
The interest rate at which a central bank lends to commercial banks.
Influences loan rates and overall money supply in the economy.
Term
Meaning
Description
Bankers’ Acceptance
A short-term credit instrument guaranteed by a bank.
Used mostly in international trade to ensure the exporter gets paid.
Term
Meaning
Description
Base Minimum Capital
The minimum capital required to operate a financial business.
Set by regulators to ensure the firm can cover its risks and obligations.
Term
Meaning
Description
Basis Point
One hundredth of a percentage point (0.01%).
Commonly used in finance to express interest rate changes.
Term
Meaning
Description
Basis Risk
The risk that a hedge won’t perfectly offset price changes in the underlying asset.
Occurs when futures and spot prices don’t move in sync.
Term
Meaning
Description
Basis Trading
A strategy involving buying and selling related securities like spot and futures.
Used to profit from small pricing differences between them.
Term
Meaning
Description
Basket Trade
A single trade that includes multiple securities bundled together.
Used to execute large institutional trades or mimic an index.
Term
Meaning
Description
Bear Call Spread
A bearish options strategy using two call options.
It profits when the underlying asset stays below the strike price of the sold call.
Term
Meaning
Description
Bear Hug
An aggressive takeover offer made directly to a company’s board.
Usually at a premium to pressure the board into accepting the acquisition.
Term
Meaning
Description
Bear Market
A market condition where prices fall 20% or more from recent highs.
Usually signals widespread pessimism and economic slowdown.
Term
Meaning
Description
Bear Market Rally
A temporary rise in prices during a bear market.
Investors may mistakenly believe the market has recovered.
Term
Meaning
Description
Bear Put Spread
A bearish strategy using two put options at different strike prices.
It limits both potential gains and losses.
Term
Meaning
Description
Bear Spread
A general strategy involving buying and selling options to profit from a decline.
Can be created using puts or calls depending on the structure.
Term
Meaning
Description
Bear Trap
A false signal indicating a downtrend that quickly reverses.
Tricks investors into selling before prices rebound.
Term
Meaning
Description
Bearer Form
A security not registered in the owner’s name.
Whoever physically holds it is presumed to be the owner.
Term
Meaning
Description
Bearer Share
A physical share certificate with no registered owner.
Possession equals ownership — now largely phased out due to misuse concerns.
Term
Meaning
Description
Benchmark
A standard used to measure the performance of an investment.
Indices like KSE-100 or S&P 500 are common benchmarks.
Term
Meaning
Description
Beneficial Owner
The true owner of a security even if it’s held by someone else.
They enjoy the benefits of ownership like dividends and voting rights.
Term
Meaning
Description
Beneficiary
A person or entity entitled to receive benefits from a financial product.
Common in insurance policies, wills, or trust funds.
Term
Meaning
Description
Berkshire Hathaway
A multinational conglomerate led by Warren Buffett.
Known for long-term value investing and owning companies like GEICO and Dairy Queen.
Term
Meaning
Description
Beta
A measure of a stock’s volatility compared to the market.
A beta above 1 means more risk; below 1 means less risk than the market.
Term
Meaning
Description
Bid Price
The highest price a buyer is willing to pay for a security.
Matched with the ask price during trading to complete a transaction.
Term
Meaning
Description
Bid-Ask Spread
The difference between the bid and ask prices.
Reflects market liquidity and transaction cost for investors.
Term
Meaning
Description
Black Swan
An unpredictable event with major consequences.
Examples include COVID-19 or the 2008 financial crisis.
Term
Meaning
Description
Black-Scholes Model
A formula used to price options.
Helps estimate the value of call and put options based on variables like volatility and time.
Term
Meaning
Description
Blend Fund
A mutual fund that combines growth and value stocks.
It balances risk by investing in both high-growth and stable companies.
Term
Meaning
Description
Block Trade
A large-volume trade privately negotiated off the exchange.
Used by institutions to avoid market disruption.
Term
Meaning
Description
Bloomberg Terminal
A premium software used by finance professionals for data and trading.
Provides real-time market data, news, and analytics.
Term
Meaning
Description
Blue Chip
A stock from a large, stable, and well-established company.
Known for steady earnings and often pays dividends.
Term
Meaning
Description
Blue Sky Laws
State-level regulations to protect investors from fraud.
Require securities to be registered before being sold.
Term
Meaning
Description
Board Lot
A standard number of shares traded on an exchange.
Helps create uniformity in trading (e.g., 100 shares per lot).
Term
Meaning
Description
Board of Directors
A group elected to oversee company management and policy.
Represents shareholders and makes key decisions.
Term
Meaning
Description
Boiler Room
A shady operation that uses high-pressure sales to push risky stocks.
Often involves cold calling and misleading tactics.
Term
Meaning
Description
Bollinger Bands
A technical analysis tool that shows price volatility.
Includes a moving average and two bands to indicate overbought or oversold conditions.
Term
Meaning
Description
Bond
A debt instrument where investors lend money to issuers.
They earn interest over time and get repaid at maturity.
Term
Meaning
Description
Bond Coupon
The annual interest paid to bondholders.
Usually a fixed percentage of the bond’s face value.
Term
Meaning
Description
Bond Fund
A mutual fund that invests primarily in bonds.
Offers steady income and lower volatility compared to equity funds.
Term
Meaning
Description
Bonus Share
Free additional shares given to existing shareholders.
Issued from company profits instead of cash dividends.
Term
Meaning
Description
Book Building
The process of determining the price of an IPO.
Underwriters gather bids to set an issue price based on investor demand.
Term
Meaning
Description
Book Closure
A date when a company closes its books to determine dividend eligibility.
Only shareholders on record by this date receive declared benefits.
Term
Meaning
Description
Book Runner
The main bank or firm managing a new stock or bond issuance.
Handles pricing, marketing, and allocation of securities.
Term
Meaning
Description
Book Value or Break-Up Value
The value of a company’s assets minus liabilities.
Represents what shareholders would get if the company liquidated.
Term
Meaning
Description
Bottom Fishing
Buying stocks that are undervalued or beaten down.
A strategy used by contrarian investors looking for recovery potential.
Term
Meaning
Description
Bottomup Investing
An approach that focuses on individual company fundamentals.
Investors analyze a company’s performance rather than overall economic trends.
Term
Meaning
Description
Bourse
Another word for stock exchange.
Common in Europe and Asia to describe organized securities markets.
Term
Meaning
Description
Bridge Financing
Short-term funding used until long-term financing is arranged.
Often used in M&A, real estate, or IPO preparation.
Term
Meaning
Description
Broker
An individual or firm that buys and sells securities on behalf of clients.
Earns a commission or fee for each trade.
Term
Meaning
Description
Broker-Dealer
A firm that acts as both broker (agent) and dealer (principal).
They trade securities for clients and also for their own account.
Term
Meaning
Description
Brokerage Firm
A company that provides services to buy/sell securities.
They offer access to markets and often investment advice.
Term
Meaning
Description
Bull Call Spread
A bullish options strategy using two call options.
It profits when the underlying stock rises moderately.
Term
Meaning
Description
Bull Market
A market condition where prices are rising steadily.
Usually driven by strong economic indicators and investor confidence.
Term
Meaning
Description
Business Cycle
The recurring pattern of economic growth and decline.
Includes expansion, peak, recession, and recovery phases.
Term
Meaning
Description
Business Day
A standard working day when markets are open.
Excludes weekends and public holidays.
Term
Meaning
Description
Business Valuation
The process of determining the economic value of a company.
Used in sales, mergers, or investment analysis.
Term
Meaning
Description
Buy & Hold Strategy
An investment approach focused on long-term gains.
Investors hold assets regardless of short-term fluctuations.
Term
Meaning
Description
Buy Stop Order
An order to buy a stock once it reaches a specific price.
Used to enter a position as momentum builds upward.
Term
Meaning
Description
Buyback
When a company repurchases its own shares from the market.
Reduces share count and may increase stock price or EPS.
Term
Meaning
Description
Buyback Ratio
The proportion of shares a company repurchases relative to its total shares.
Used to assess how aggressively a company is buying back its stock.
Term
Meaning
Description
Call Option
A contract giving the right to buy an asset at a fixed price.
Used by investors to speculate or hedge against rising prices.
Term
Meaning
Description
Call Premium
The price paid to buy a call option.
Reflects the option’s intrinsic value and time value.
Term
Meaning
Description
Call Protection
A period when callable bonds cannot be redeemed early.
Protects investors from early repayment by the issuer.
Term
Meaning
Description
Callable
A bond or preferred stock that can be redeemed before maturity.
Allows issuers to refinance if interest rates drop.
Term
Meaning
Description
Canceled Order
An order that has been withdrawn before execution.
Happens due to strategy changes or pricing conditions.
Term
Meaning
Description
Candlestick Pattern
A chart style used in technical analysis showing price movement.
Each candle shows open, high, low, and close within a timeframe.
Term
Meaning
Description
CAPE Ratio
A valuation metric comparing price to average earnings over 10 years.
Helps investors assess long-term market value adjusted for cycles.
Term
Meaning
Description
Capital
Wealth in the form of money or assets used to generate income.
Businesses use capital to fund operations and growth.
Term
Meaning
Description
Capital Adequacy Ratio
A measure of a bank’s capital in relation to its risks.
Ensures the bank can absorb losses and remain solvent.
Term
Meaning
Description
Capital Asset Pricing Model (CAPM)
A formula to estimate expected return on an investment.
Considers risk-free rate, beta, and market return to assess value.
Term
Meaning
Description
Capital Assets
Long-term assets not easily converted to cash.
Includes property, equipment, or investments used in business operations.
Term
Meaning
Description
Capital Cost Allowance
A tax deduction for the depreciation of capital assets.
Allows businesses to spread the cost of assets over several years.
Term
Meaning
Description
Capital Gain
Profit earned by selling an asset for more than its purchase price.
Applies to stocks, real estate, and other investments.
Term
Meaning
Description
Capital Loss
A loss incurred when selling an asset for less than its purchase price.
Used to offset capital gains for tax purposes.
Term
Meaning
Description
Capital loss carryover
Unused capital losses that can be carried forward to future tax years.
Helps reduce future taxable capital gains.
Term
Meaning
Description
Capital Market
A financial market for long-term debt and equity.
Includes stock exchanges and bond markets.
Term
Meaning
Description
Capital Market Line (CML)
A line representing the risk-return tradeoff in CAPM.
Shows the most efficient portfolios based on market risk.
Term
Meaning
Description
Capital Stock
The total shares a company is authorized to issue.
Includes both common and preferred shares.
Term
Meaning
Description
Capital Structure
The mix of debt and equity a company uses to finance operations.
Impacts risk, return, and cost of capital.
Term
Meaning
Description
Capitulation
A situation where investors give up and sell during a market drop.
Often marks a market bottom or major trend reversal.
Term
Meaning
Description
Carve-Out
A partial sale of a business unit through an IPO.
The parent company sells a stake while retaining control.
Term
Meaning
Description
Cash Equivalent
Highly liquid assets easily converted to cash.
Includes treasury bills, money market funds, and commercial paper.
Term
Meaning
Description
Cash Flow
The net movement of cash in and out of a business.
Critical for assessing liquidity and financial health.
Term
Meaning
Description
Cash Ratio
A measure of a company’s cash relative to its current liabilities.
Shows short-term liquidity and ability to cover obligations.
Term
Meaning
Description
Certificate
A document proving ownership in an asset or investment.
Can represent shares, bonds, or deposits.
Term
Meaning
Description
Channel Stuffing
Inflating sales by sending excess products to distributors.
Used to boost short-term earnings, often considered misleading.
Term
Meaning
Description
Chartered Financial Analyst
A globally recognized certification for investment professionals.
CFAs specialize in research, portfolio management, and ethical standards.
Term
Meaning
Description
Cheapest to Deliver (CTD)
The least costly bond deliverable in a futures contract.
Used in bond futures to fulfill contract obligations.
Term
Meaning
Description
Chinese Wall
A metaphorical barrier preventing information leaks between departments.
Used in financial firms to avoid conflicts of interest.
Term
Meaning
Description
Circuit breaker
A mechanism to temporarily halt trading during extreme volatility.
Prevents panic selling and gives investors time to react.
Term
Meaning
Description
Clearing
The process of settling a trade and transferring ownership.
Occurs after a trade is executed on an exchange.
Term
Meaning
Description
Clearing house
An intermediary that ensures trades are completed smoothly.
Guarantees both parties fulfill trade obligations.
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Meaning
Description
Close Position
Selling or buying back an investment to exit a trade.
Used to lock in profits or limit losses.
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Meaning
Description
Closed-End Funds
Investment funds with a fixed number of shares.
They trade on exchanges like stocks and may trade at a premium or discount.
Term
Meaning
Description
Closed-End Management Company
A firm managing closed-end investment funds.
Provides professional asset management for shareholders.
Term
Meaning
Description
Collateral
Assets pledged to secure a loan or obligation.
If the borrower defaults, the lender can claim the collateral.
Term
Meaning
Description
Collateralised Debt Obligation (CDO)
A complex structured financial product backed by debt.
Pools together loans and sells them to investors in tranches.
Term
Meaning
Description
Collusion
Secret agreement between parties to deceive or defraud.
Illegal in markets as it disrupts fair competition.
Term
Meaning
Description
Commercial Paper
Unsecured short-term debt issued by companies.
Used to finance payroll, inventory, or other short-term needs.
Term
Meaning
Description
Commission
A fee paid to brokers for executing trades.
Can be fixed or percentage-based depending on the service.
Term
Meaning
Description
Commodity Pool
A fund that combines investor money to trade commodities.
Managed by professionals using various futures strategies.
Term
Meaning
Description
Common Shares
Equity ownership in a company with voting rights.
Holders may receive dividends and benefit from share price appreciation.
Term
Meaning
Description
Companies Limited by Guarantee
A legal structure for non-profit organizations.
Members guarantee a nominal amount rather than holding shares.
Term
Meaning
Description
Compound Annual Growth Rate
The yearly growth rate over a multi-year period.
Reflects the smoothed annual return of an investment.
Term
Meaning
Description
Comprehensive Income
Total income including net income and other gains/losses.
Includes unrealized gains, currency adjustments, and more.
Term
Meaning
Description
Conditional Value at Risk (CVaR)
A measure of potential loss beyond a given VaR threshold.
Used in risk management to evaluate worst-case scenarios.
Term
Meaning
Description
Confirmation
A document verifying the details of a financial transaction.
Sent after a trade is executed to confirm price, date, and terms.
Term
Meaning
Description
Conflict of Interest
A situation where personal interest may compromise judgment.
Common in finance when advisors may benefit from certain recommendations.
Term
Meaning
Description
Constitutive Disclosure
Legal documents that define a fund’s operations.
Includes trust deeds, offering documents, and compliance terms.
Term
Meaning
Description
Constitutive Document
A legal document that outlines the structure and rules of a fund.
Includes trust deeds, offering documents, and compliance policies.
Term
Meaning
Description
Contango
A market condition where future prices are higher than current prices.
Usually occurs when storage costs or interest rates are high.
Term
Meaning
Description
Contrarian
An investor who goes against prevailing market trends.
They buy when others are fearful and sell when others are overly confident.
Term
Meaning
Description
Contributed capital
Money invested in a company by shareholders.
Also known as paid-in capital, it supports business operations or growth.
Term
Meaning
Description
Contribution
An amount added to a financial account or fund.
Common in pensions, retirement plans, or investment accounts.
Term
Meaning
Description
Conversion
Changing one type of security into another.
For example, converting bonds into shares.
Term
Meaning
Description
Conversion Price
The price at which a convertible security can be converted.
Determines how many shares an investor receives upon conversion.
Term
Meaning
Description
Convertible
A financial instrument that can be exchanged for another.
Typically refers to bonds or preferred shares that convert to common stock.
Term
Meaning
Description
Convertible Preferred Stock
Preferred shares that can be converted into common stock.
Combines fixed income benefits with potential upside from equity.
Term
Meaning
Description
Convexity
A measure of how bond duration changes with interest rates.
Helps assess price sensitivity beyond duration.
Term
Meaning
Description
Cook the Books
Manipulating financial records to mislead stakeholders.
An illegal practice that inflates profits or hides losses.
Term
Meaning
Description
Corporate Governance
The system of rules and practices by which a company is controlled.
Ensures accountability and transparency to shareholders.
Term
Meaning
Description
Corporate Resolution
A formal decision made by a company’s board of directors.
Used to authorize actions like opening bank accounts or entering contracts.
Term
Meaning
Description
Corporation
A legal entity separate from its owners.
Can enter contracts, own assets, and issue shares independently.
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Meaning
Description
Correction
A temporary decline of 10% or more in a stock or market.
Seen as a natural part of market cycles.
Term
Meaning
Description
Coupon Rate
The annual interest paid on a bond, expressed as a percentage.
Determines how much the bondholder receives each year.
Term
Meaning
Description
Crash
A sudden and severe market decline.
Characterized by panic selling and steep losses in a short time.
Term
Meaning
Description
Credit Default Swap (CDS)
A financial contract that protects against bond defaults.
Acts like insurance for bondholders.
Term
Meaning
Description
Credit Rating
An evaluation of a borrower’s creditworthiness.
Given by agencies like Moody’s or S&P, it affects borrowing costs.
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Meaning
Description
Cross Holding
When companies hold shares in each other.
Can complicate ownership and reduce transparency.
Term
Meaning
Description
Cross Listing
Listing a company’s shares on multiple stock exchanges.
Increases access to capital and investor reach.
Term
Meaning
Description
Cross Trade
A trade where a broker matches a buy and sell order internally.
Permitted under certain rules to improve execution speed.
Term
Meaning
Description
Cum Dividend
A stock that still carries the right to receive the next dividend.
Investors who buy before the ex-dividend date get the dividend.
Term
Meaning
Description
Cumulative Preference Shares
Preferred shares that accumulate unpaid dividends.
Unpaid dividends must be paid before any to common shareholders.
Term
Meaning
Description
Current Assets
Assets expected to be used or converted into cash within a year.
Includes cash, receivables, and inventory.
Term
Meaning
Description
Current Liability
Obligations due within one year.
Includes accounts payable, short-term loans, and wages payable.
Term
Meaning
Description
Current Ratio
A liquidity ratio comparing current assets to current liabilities.
Shows a company’s ability to pay short-term obligations.
Term
Meaning
Description
Current Yield
The annual interest income divided by the bond’s current price.
Measures income return from a bond investment.
Term
Meaning
Description
Custodian
A financial institution that holds securities on behalf of clients.
Ensures safety, settlement, and reporting of assets.
Term
Meaning
Description
Cyclical Stock
Stocks that move with economic cycles.
Perform well during booms and poorly during downturns (e.g., auto, travel).
Term
Meaning
Description
Dark Cloud Cover
A bearish candlestick pattern in technical analysis.
Signals a potential reversal after an upward trend.
Term
Meaning
Description
Dark Pool
A private exchange where institutional investors trade.
Used to make large trades with less market impact.
Term
Meaning
Description
Data Portal
An online platform that provides financial data and tools.
Used by investors, analysts, or regulators.
Term
Meaning
Description
Day Order
A trade order valid only for the trading day.
Expires if not executed by market close.
Term
Meaning
Description
Day Trader
An investor who buys and sells within the same day.
Relies on short-term price movements to earn profits.
Term
Meaning
Description
Dead Cat Bounce
A short-lived recovery after a sharp market decline.
Usually followed by continued downward movement.
Term
Meaning
Description
Dealer
A firm or person that buys and sells securities for their own account.
Profits from the spread between buying and selling prices.
Term
Meaning
Description
Debenture
An unsecured bond backed only by the issuer’s creditworthiness.
Does not involve collateral.
Term
Meaning
Description
Debt
Money borrowed by individuals or institutions that must be repaid.
Includes bonds, loans, and notes payable.
Term
Meaning
Description
Debt Financing
Raising money by borrowing rather than issuing equity.
Repayment includes principal and interest.
Term
Meaning
Description
Debt to Equity Ratio
A measure of a company’s leverage.
Compares total debt to shareholders’ equity.
Term
Meaning
Description
Default Risk
The chance that a borrower won’t repay a loan.
Higher in junk bonds or risky borrowers.
Term
Meaning
Description
Defensive Stock
Stocks that perform well during economic downturns.
Includes sectors like utilities, healthcare, or consumer staples.
Term
Meaning
Description
Deleveraging
Reducing debt levels to lower financial risk.
Often involves selling assets or raising equity.
Term
Meaning
Description
Delisting
Removing a company’s stock from an exchange.
Happens voluntarily or due to failing listing requirements.
Term
Meaning
Description
Delta
A measure of how much an option’s price changes with the underlying asset.
Used to gauge sensitivity and hedge positions.
Term
Meaning
Description
Demutualization
The process of converting a mutual organization into a public company.
Often done by exchanges or insurance firms.
Term
Meaning
Description
Depreciation
The decline in value of an asset over time.
Recorded as an expense to match the asset’s usage.
Term
Meaning
Description
Derivative Product Company (DPC)
A special entity created to issue derivative products.
Used to isolate risk and manage complex financial products.
Term
Meaning
Description
Derivatives
Contracts whose value is based on an underlying asset.
Includes options, futures, and swaps used for hedging or speculation.
Term
Meaning
Description
Dilution
A reduction in existing shareholders’ ownership due to new share issuance.
It lowers the value of each share as total share count increases.
Term
Meaning
Description
Direct Stock Purchase Plan (DSPP)
A program allowing investors to buy stock directly from a company.
Typically bypasses brokers and may offer lower fees or reinvestment options.
Term
Meaning
Description
Director
A member of a company’s board overseeing strategic decisions.
Responsible for representing shareholders and guiding company policy.
Term
Meaning
Description
Disclaimer Clause
A legal statement limiting liability or responsibility.
Often used in reports, disclosures, and financial documents.
Term
Meaning
Description
Discount Broker
A brokerage that executes trades at lower fees without advisory services.
Ideal for self-directed investors focused on cost efficiency.
Term
Meaning
Description
Discount Rate
The interest rate used to determine present value of future cash flows.
Also refers to the rate at which central banks lend to commercial banks.
Term
Meaning
Description
Discretionary Account
An investment account where the broker can make trades without client consent.
Gives full control to the manager based on investor’s goals.
Term
Meaning
Description
Disposition
The act of selling or transferring ownership of an asset.
Used in accounting and capital gains calculations.
Term
Meaning
Description
Distribution
A payout of income, profits, or capital to investors.
Includes dividends, interest, or fund disbursements.
Term
Meaning
Description
Distribution Company/Companies
A firm responsible for delivering goods or financial products.
In investing, it may also refer to mutual fund distributors.
Term
Meaning
Description
Distribution Function
The process of allocating returns or assets to stakeholders.
May refer to how dividends or profits are split in a fund or investment.
Term
Meaning
Description
Distribution Waterfall
A method of prioritizing how investment returns are distributed.
Used in private equity or real estate to outline investor payouts.
Term
Meaning
Description
Distribution Yield
The ratio of income distributions to a fund’s price.
Used by income-focused investors to assess cash flow.
Term
Meaning
Description
Distributor
An entity that sells or promotes investment products to investors.
Works between asset managers and retail clients.
Term
Meaning
Description
Diversification
Spreading investments across different assets to reduce risk.
A key principle for building a balanced portfolio.
Term
Meaning
Description
Dividend
A portion of company profits paid to shareholders.
Can be paid in cash or additional stock.
Term
Meaning
Description
Dividend Aristocrat
A company that has increased dividends for 25+ consecutive years.
Seen as reliable and financially stable.
Term
Meaning
Description
Dividend Discount Model (DDM)
A method to value a stock based on expected future dividends.
Assumes the stock’s value equals the present value of future payouts.
Term
Meaning
Description
Dividend Irrelevance Theory
A theory suggesting dividends don’t affect a firm’s value.
Based on the idea that investors can create their own income stream.
Term
Meaning
Description
Dividend Payout Ratio
The portion of earnings paid out as dividends.
Helps investors understand how much profit is shared vs. retained.
Term
Meaning
Description
Dividend Per Share (DPS)
The total dividend paid divided by the number of shares.
Used to compare income generation between companies.
Term
Meaning
Description
Dividend Reinvestment Plan
A program allowing investors to use dividends to buy more shares.
Helps compound returns without requiring additional capital.
Term
Meaning
Description
Dividend Yield
A ratio of annual dividend to share price.
Shows the income return on a stock investment.
Term
Meaning
Description
Doji
A candlestick chart pattern showing market indecision.
Occurs when open and close prices are nearly the same.
Term
Meaning
Description
Dotcom Bubble
A market bubble driven by overvalued internet companies in the late 1990s.
Burst in 2000, leading to significant tech stock losses.
Term
Meaning
Description
Double Top
A bearish chart pattern indicating a potential reversal.
Appears after two failed attempts to break a resistance level.
Term
Meaning
Description
Dow Jones Industrial Average (DJIA)
A major stock index of 30 large U.S. companies.
Used to gauge overall market performance and investor sentiment.
Term
Meaning
Description
Dow Theory
A market analysis theory using price trends and volume.
Based on confirmation between major indices to validate market direction.
Term
Meaning
Description
Downside Risk
The potential for an investment to decrease in value.
Measures how much an investor could lose in a worst-case scenario.
Term
Meaning
Description
Dual Class Stock
Two classes of shares with different voting rights.
Used to retain control by founders while raising capital.
Term
Meaning
Description
Dual Listing
A company listed on more than one stock exchange.
Increases market visibility and liquidity.
Term
Meaning
Description
Duopoly
An industry dominated by two major players.
Limited competition may lead to price control or market power.
Term
Meaning
Description
DuPont Analysis
A breakdown of return on equity (ROE) into key components.
Helps analyze profitability, efficiency, and leverage.
Term
Meaning
Description
Earning Per Share
The portion of a company’s profit allocated per share.
A key metric for valuing stocks and measuring performance.
Term
Meaning
Description
Earnings Before Interest and Taxes (EBIT)
A measure of a company’s operating profitability.
Excludes financing and tax costs to assess core business strength.
Term
Meaning
Description
Earnings Whisper Number
An unofficial forecast of earnings, often from analysts or insiders.
Used to gauge market expectations beyond consensus estimates.
Term
Meaning
Description
Economic Moat
A competitive advantage that protects a company’s profits.
Examples include brand value, patents, or cost advantages.
Term
Meaning
Description
Economic Value Added (EVA)
A measure of a firm’s true economic profit.
Calculated as net operating profit minus the cost of capital.
Term
Meaning
Description
Efficient Market Hypothesis (EMH)
A theory that all known information is reflected in stock prices.
Suggests it’s impossible to consistently outperform the market.
Term
Meaning
Description
Electronic Fund Transfer
The digital movement of money between accounts.
Used for online payments, bank transfers, and financial transactions.
Term
Meaning
Description
Employee Stock Option
A benefit giving employees the right to buy shares at a set price.
Incentivizes long-term performance and loyalty.
Term
Meaning
Description
Endowment Fund
A pool of assets donated to institutions like universities.
Invested to generate income while preserving capital.
Term
Meaning
Description
Equal Weight
An investment approach where each asset has the same allocation.
Unlike market-weighted strategies, it avoids large-cap bias.
Term
Meaning
Description
Equity
Ownership in a company, typically through shares.
Represents a claim on assets and earnings.
Term
Meaning
Description
Equity Fund
A mutual fund that invests mainly in stocks.
Aims for capital appreciation and long-term growth.
Term
Meaning
Description
Equity Swaps
A contract to exchange future returns of different equities.
Used to manage risk or gain exposure without owning the asset.
Term
Meaning
Description
ESG (Environmental, Social & Governance)
A framework for evaluating a company’s ethical impact.
Increasingly used in responsible and sustainable investing.
Term
Meaning
Description
Evening Star
A bearish candlestick pattern indicating reversal.
Appears after an uptrend and signals potential decline.
Term
Meaning
Description
Ex-Dividend
A stock traded without the value of the next dividend.
Buyers after this date won’t receive the upcoming dividend.
Term
Meaning
Description
Excess Return
The return above a benchmark or risk-free rate.
Measures how much value an investment added beyond expectations.
Term
Meaning
Description
Exchange Traded Fund
A fund that trades like a stock on an exchange.
It holds a basket of assets and offers diversification with liquidity.
Term
Meaning
Description
Exchange-Traded Note (ETN)
A debt instrument linked to a market index or strategy.
Returns depend on the underlying asset but has credit risk from the issuer.
Term
Meaning
Description
Exponential Moving Average (EMA)
A type of moving average that gives more weight to recent prices.
Used in technical analysis to track trends more sensitively.
Term
Meaning
Description
Extraordinary General Meeting
A shareholder meeting held outside the annual schedule.
Called to discuss urgent matters like mergers or board changes.
Term
Meaning
Description
Face Value
The nominal value of a bond or share printed on the certificate.
For bonds, it’s the amount repaid at maturity.
Term
Meaning
Description
Factor Investing
An investment strategy targeting specific drivers of returns.
Factors include size, value, momentum, quality, and volatility.
Term
Meaning
Description
Fair Value
The estimated value of an asset based on market conditions.
Reflects what a willing buyer would pay and seller would accept.
Term
Meaning
Description
Fallen Angel
A bond that was investment grade but got downgraded to junk.
Occurs when a company’s financial position worsens.
Term
Meaning
Description
Family of Fund
A group of mutual funds offered by the same company.
Provides investors with multiple choices across strategies or asset classes.
Term
Meaning
Description
Fibonacci Retracement
A technical tool that predicts support and resistance levels.
Uses key ratios from the Fibonacci sequence to anticipate price moves.
Term
Meaning
Description
Fiduciary
A person legally bound to act in another’s best interest.
Applies to financial advisors, trustees, and company directors.
Term
Meaning
Description
Fill or Kill
An order that must be executed immediately in full or not at all.
Used to avoid partial execution in fast markets.
Term
Meaning
Description
Financial Advisor
A professional who helps clients manage investments and finances.
May provide planning, asset allocation, or tax strategy advice.
Term
Meaning
Description
Financial Exposure
The potential financial loss a business or investor faces.
Could be due to market risks, credit risk, or operational issues.
Term
Meaning
Description
Financial Planner
A certified expert who builds long-term financial strategies.
Focuses on retirement, savings, tax, and wealth goals.
Term
Meaning
Description
Fiscal Policy
Government use of spending and taxation to influence the economy.
Used to manage inflation, employment, and growth.
Term
Meaning
Description
Fiscal Stimulus
Government action to boost the economy through spending or tax cuts.
Used in downturns to increase demand and create jobs.
Term
Meaning
Description
Fiscal Year
A 12-month period used for financial reporting.
Doesn’t always align with the calendar year.
Term
Meaning
Description
Fixed Assets
Long-term physical assets used in operations.
Examples include buildings, machinery, and vehicles.
Term
Meaning
Description
Floating Interest Rate
A rate that changes over time based on market conditions.
Also known as variable or adjustable rate.
Term
Meaning
Description
Floating Rate
A type of bond or loan with interest that resets periodically.
Tied to benchmarks like LIBOR or central bank rates.
Term
Meaning
Description
Flotation
The process of offering a company’s shares to the public.
Also called going public or an IPO.
Term
Meaning
Description
Forward
A contract to buy or sell an asset at a future date at a set price.
Customized between two parties, unlike exchange-traded futures.
Term
Meaning
Description
Forward Pricing
The practice of pricing fund units at the next NAV.
Ensures fairness by avoiding price manipulation.
Term
Meaning
Description
Free Cash Flow (FCF)
Cash generated after capital expenses.
Used to pay dividends, reduce debt, or reinvest in growth.
Term
Meaning
Description
Free Float
Shares available for public trading, excluding locked-in holdings.
Used to calculate float-adjusted market capitalization.
Term
Meaning
Description
Front-End Load
A fee charged when buying into a mutual fund.
Reduces the initial amount invested but may decline over time.
Term
Meaning
Description
Front-Running
Illegal trading based on advance knowledge of client orders.
Gives brokers an unfair advantage over other market participants.
Term
Meaning
Description
FTSE 100
A stock index of the 100 largest UK-listed companies.
A benchmark for the London Stock Exchange’s performance.
Term
Meaning
Description
Full Market Capitalisation
The total value of a company based on all outstanding shares.
Calculated as share price × total shares (including non-float).
Term
Meaning
Description
Fund Manager
A professional who oversees an investment portfolio.
Makes buy/sell decisions to meet fund objectives.
Term
Meaning
Description
Fund of Funds
A mutual fund that invests in other mutual funds.
Offers built-in diversification but may have higher fees.
Term
Meaning
Description
Fundamental Analysis
Analyzing a company’s financials and business health.
Used to determine intrinsic value and long-term potential.
Term
Meaning
Description
Future Contracts
Agreements to buy or sell an asset at a future date at a fixed price.
Standardized and traded on exchanges.
Term
Meaning
Description
Futures in Stock Market
Contracts based on indices, stocks, or commodities.
Used for hedging or speculation.
Term
Meaning
Description
Futures Market
A platform for trading standardized futures contracts.
Provides transparency and liquidity for managing price risks.
Term
Meaning
Description
Gamma
A measure of how much an option’s delta changes with the stock price.
Used in advanced option trading and hedging.
Term
Meaning
Description
GEM Board
A segment of the PSX for small and medium enterprises (SMEs).
Allows easier access to capital with relaxed regulations.
Term
Meaning
Description
Good This Month
A time-in-force option for orders valid until month-end.
Expires automatically if not executed.
Term
Meaning
Description
Good Til Cancelled
An order that remains active until filled or cancelled.
Does not expire at the end of the trading day.
Term
Meaning
Description
Green Bond
A bond that finances environmentally friendly projects.
Used for clean energy, sustainable infrastructure, and climate solutions.
Term
Meaning
Description
Green-shoe
An option to sell extra shares during an IPO to stabilize prices.
Used to support the stock if demand is high.
Term
Meaning
Description
Greenfield Investment
Building a new facility or operation from scratch in a new location.
Contrasts with acquiring existing businesses.
Term
Meaning
Description
Greenwashing
Falsely promoting an investment or company as environmentally friendly.
A deceptive marketing tactic to attract ESG investors.
Term
Meaning
Description
Gross Margin
The difference between sales and cost of goods sold.
Indicates how efficiently a company produces its goods.
Term
Meaning
Description
Gross Profit Margin
Gross profit as a percentage of total sales.
Measures profitability before overhead and operating expenses.
Term
Meaning
Description
Growth Stock
A stock expected to grow faster than the market average.
Typically reinvests profits instead of paying dividends.
Term
Meaning
Description
Guaranteed Stock
Equity that provides minimum assured returns or protection.
Usually structured by insurance firms or as part of hybrid products.
Term
Meaning
Description
Haircut
A reduction in the value of collateral in lending.
Protects lenders against potential loss if asset prices fall.
Term
Meaning
Description
Haram
An Arabic term meaning “forbidden” under Islamic law.
In finance, it refers to non-Shariah-compliant practices like interest (riba).
Term
Meaning
Description
Hedge Fund
A private investment fund using aggressive strategies to earn high returns.
May use leverage, derivatives, and short selling, often with fewer regulations.
Term
Meaning
Description
Hedge Ratio
A measure of how much of a position is hedged.
Used to reduce risk by balancing exposure between two investments.
Term
Meaning
Description
Hedging
A strategy to reduce risk by taking an offsetting position.
Used to protect against price fluctuations in assets or liabilities.
Term
Meaning
Description
High-Frequency Trader (HFT)
A trader using algorithms to execute thousands of trades in milliseconds.
Profits from small price movements at high volume and speed.
Term
Meaning
Description
Hurdle Rate
The minimum return an investment must achieve to be worthwhile.
Used in project evaluation and private equity fund performance.
Term
Meaning
Description
Hybrid Security
A financial instrument combining features of debt and equity.
Examples include convertible bonds or preferred shares.
Term
Meaning
Description
Immediate or Cancel (IOC)
An order that must be filled immediately or cancelled.
Partial execution is allowed, but the rest is cancelled.
Term
Meaning
Description
In-the-Money
An option that has intrinsic value.
Call options are in-the-money when the stock price is above the strike price.
Term
Meaning
Description
Incentive Stock Option
A stock option offered to employees with tax advantages.
Encourages employee ownership and long-term performance.
Term
Meaning
Description
Income
Money received regularly from work or investments.
In investing, refers to interest, dividends, or rental earnings.
Term
Meaning
Description
Income Fund
A mutual fund focused on generating regular income.
Invests in bonds, dividend-paying stocks, or other income assets.
Term
Meaning
Description
Income Statement
A financial report showing revenue, expenses, and profit over time.
Used to assess business performance and profitability.
Term
Meaning
Description
Income Stock
A stock that provides regular and high dividends.
Favored by investors seeking steady cash flow over capital gains.
Term
Meaning
Description
Independent Director
A board member with no ties to company management.
Provides unbiased oversight and strengthens corporate governance.
Term
Meaning
Description
Index
A benchmark representing a group of stocks or securities.
Used to track market performance (e.g., KSE-100, S&P 500).
Term
Meaning
Description
Indices
The plural of index; refers to multiple market benchmarks.
Used to measure various sectors, regions, or strategies.
Term
Meaning
Description
Individual Pension Account
A personal retirement savings account in Pakistan.
Allows tax-advantaged contributions to build future pension income.
Term
Meaning
Description
Inefficient Market
A market where prices do not fully reflect all information.
Leads to mispriced assets and potential for excess returns.
Term
Meaning
Description
Inflation
The general rise in prices over time.
Reduces purchasing power and impacts interest rates and investments.
Term
Meaning
Description
Inflation Indexed Security
A bond that adjusts payouts based on inflation.
Protects investors from losing value due to rising prices.
Term
Meaning
Description
Initial Investment
The first amount of money put into an asset or project.
Forms the base for calculating gains or losses.
Term
Meaning
Description
Initial Margin
The minimum amount required to open a leveraged position.
Ensures traders have skin in the game and limits credit risk.
Term
Meaning
Description
Initial Price
The offering price of a security in its first sale.
Applies to IPOs or newly listed bonds and funds.
Term
Meaning
Description
Insider Trading
Buying or selling securities using non-public information.
Illegal when used to gain unfair advantage in markets.
Term
Meaning
Description
Institutional Investor
A large entity like a bank, fund, or insurance company that invests money.
Known for high-volume trades and market influence.
Term
Meaning
Description
Instrument
A generic term for any tradeable financial product.
Includes stocks, bonds, options, futures, etc.
Term
Meaning
Description
Inter-Party transactions
Financial dealings between related entities or individuals.
Must be disclosed to avoid conflicts of interest or regulatory violations.
Term
Meaning
Description
Interest
The cost of borrowing money or the income earned on deposits.
Expressed as a percentage of the principal amount.
Term
Meaning
Description
Interest Coverage Ratio
A measure of a company’s ability to pay interest on debt.
Calculated as EBIT divided by interest expense.
Term
Meaning
Description
Interest Income
Earnings from interest-bearing investments like bonds or deposits.
Taxed as regular income in most jurisdictions.
Term
Meaning
Description
Interim Dividend
A dividend paid before the year-end final dividend.
Typically declared when a company performs well mid-year.
Term
Meaning
Description
Internal Rate of Return (IRR)
The discount rate that makes a project’s NPV zero.
Used to evaluate profitability of investments or projects.
Term
Meaning
Description
International Bond
A bond issued in a country other than the one where the investor resides.
Used to diversify and gain foreign exposure.
Term
Meaning
Description
Intrinsic Value
The actual worth of an asset based on fundamentals.
Used to assess if a stock is under- or overvalued.
Term
Meaning
Description
Introducing Broker
A broker who refers clients to another brokerage firm.
Earns a commission for generating new business but doesn’t handle trades directly.
Term
Meaning
Description
Invested Capital
The total funds deployed into a business for operations or assets.
Includes equity, debt, and retained earnings.
Term
Meaning
Description
Investment Horizon
The length of time an investor expects to hold an investment.
Impacts risk tolerance and asset allocation decisions.
Term
Meaning
Description
Investment Objective
The financial goal of an investment.
Can be growth, income, capital preservation, or a mix.
Term
Meaning
Description
Investment Product
A financial vehicle used to grow or manage wealth.
Includes stocks, bonds, funds, insurance plans, etc.
Term
Meaning
Description
Investor Relations
A department that communicates with shareholders and analysts.
Handles reporting, updates, and transparency efforts.
Term
Meaning
Description
Investors
Individuals or institutions that allocate capital for returns.
May seek income, growth, or capital preservation.
Term
Meaning
Description
IPO-Initial Public Offering
The first time a company offers shares to the public.
Used to raise capital and gain market visibility.
Term
Meaning
Description
Issued Shares
The total shares a company has formally released to investors.
Includes both outstanding and treasury shares.
Term
Meaning
Description
January effect
A theory that stocks rise in January due to fresh investment activity.
Driven by tax strategies, bonuses, and optimism.
Term
Meaning
Description
Jobber
A trader who buys and sells on their own account for small profits.
An old term mostly used in traditional stock exchanges.
Term
Meaning
Description
Joint Account
An investment or bank account owned by two or more people.
Each holder typically has equal rights and access.
Term
Meaning
Description
JSMF-Index
A specific index used by mutual funds in Pakistan.
Helps benchmark fund performance against market standards.
Term
Meaning
Description
Jump Risk
The risk of sudden, significant price movement.
Often linked to unexpected news, earnings, or events.
Term
Meaning
Description
Junk Bond
A high-yield bond with lower credit rating.
Pays more interest to compensate for higher default risk.
Term
Meaning
Description
Kicker
A bonus feature added to a bond or preferred stock.
Can be in the form of warrants or conversion rights.
Term
Meaning
Description
KMI-30 Index
A Shariah-compliant index of 30 companies listed on PSX.
Tracks performance of stocks that meet Islamic investment criteria.
Term
Meaning
Description
KMI-All Share Index
A broader index covering all Shariah-compliant stocks on PSX.
Helps investors evaluate the Islamic segment of the market.
Term
Meaning
Description
Knock-In Option
An option that becomes active only after a certain price is reached.
Used in exotic options trading to limit exposure.
Term
Meaning
Description
Knock-Out Option
An option that becomes void if a specific price is reached.
Limits risk and reward by ending the contract early.
Term
Meaning
Description
Known Pricing
A pricing method where product or service rates are disclosed beforehand.
Provides transparency in investment or contract terms.
Term
Meaning
Description
KSE-100 Index
The main stock index of Pakistan’s PSX comprising 100 top companies.
Used as a benchmark for overall market performance.
Term
Meaning
Description
KSE-30 Index
An index of 30 most liquid and largest companies on PSX.
Focuses on blue-chip stocks for institutional tracking.
Term
Meaning
Description
KSE-All Share Index
Tracks all listed companies on the PSX.
Provides a comprehensive view of the Pakistani equity market.
Term
Meaning
Description
Laddering
A strategy of spreading investments over different maturities.
Used in bonds to manage interest rate risk and reinvestment.
Term
Meaning
Description
Lagging Indicator
An economic indicator that follows market trends.
Examples include unemployment and corporate earnings data.
Term
Meaning
Description
Large Cap
A company with a large market capitalization.
Generally stable with lower risk compared to small caps.
Term
Meaning
Description
LDCP
Last Day Closing Price of a stock.
Used as the reference point for next trading day’s performance.
Term
Meaning
Description
LEAPS
Long-Term Equity Anticipation Securities.
Long-term options with expiration dates up to three years.
Term
Meaning
Description
Leveraged Buyout (LBO)
The acquisition of a company using borrowed funds.
Assets of the acquired company are often used as collateral.
Term
Meaning
Description
Leveraged ETF
An ETF designed to deliver multiples of index performance.
Uses derivatives to magnify returns — or losses.
Term
Meaning
Description
Leveraging
Using borrowed capital to increase potential return.
Increases risk if the investment doesn’t perform as expected.
Term
Meaning
Description
Liabilities
A company’s financial obligations or debts.
Includes loans, accounts payable, and other forms of credit.
Term
Meaning
Description
Limit Down
A price drop limit set by an exchange to halt trading.
Prevents panic-selling and market crashes.
Term
Meaning
Description
Limit Order
An order to buy or sell at a specific price or better.
Provides price control but may not execute if market moves away.
Term
Meaning
Description
Limit Up
A price increase limit set by an exchange to halt trading.
Helps cool down overheating markets.
Term
Meaning
Description
Limit-on-Close (LOC) Order
A limit order that executes only at market close.
Used to trade based on end-of-day pricing.
Term
Meaning
Description
Limit-on-Open (LOO) Order
A limit order that executes only at market open.
Targets early price moves with controlled entry.
Term
Meaning
Description
Limited Liability
A legal structure where losses are limited to invested capital.
Protects shareholders from personal financial risk.
Term
Meaning
Description
Liquidating Value
The estimated amount a company’s assets would fetch if sold.
Used in bankruptcy or winding-down scenarios.
Term
Meaning
Description
Liquidation
The process of closing a business and selling its assets.
Proceeds are used to pay off creditors and shareholders.
Term
Meaning
Description
Liquidation Preference
A right that gives certain investors priority during liquidation.
Preferred shareholders or venture capitalists often have this clause.
Term
Meaning
Description
Liquidity
The ease with which an asset can be converted to cash.
High liquidity means faster, more stable transactions.
Term
Meaning
Description
Listed Company
A firm whose shares are traded on a public exchange.
Must meet regulatory and reporting standards.
Term
Meaning
Description
Listing
The act of registering a company’s shares on an exchange.
Enables public trading and broader investor access.
Term
Meaning
Description
Load
A fee charged by mutual funds for buying or selling units.
Can be front-end, back-end, or level load.
Term
Meaning
Description
Locked In
A position or asset that can’t be sold or moved.
May be due to regulatory restrictions or vesting periods.
Term
Meaning
Description
Long Put
An options strategy involving the purchase of a put option.
Profits when the underlying asset price falls.
Term
Meaning
Description
Long Term Bond
A bond with a maturity of more than 10 years.
Offers higher yields but carries more interest rate risk.
Term
Meaning
Description
Long Term Debt
Loans or bonds payable beyond one year.
Part of a company’s capital structure for expansion or investment.
Term
Meaning
Description
Loss
A situation where expenses exceed income or investment drops in value.
Reflects negative financial performance.
Term
Meaning
Description
Lot
A standardized unit of trading (e.g., 100 shares).
Used for pricing, trading, and settlement in exchanges.
Term
Meaning
Description
Management Fee
The fee charged by fund managers for managing assets.
Usually a percentage of assets under management (AUM).
Term
Meaning
Description
Margin Account
An account that allows investors to borrow funds to trade.
Enables leverage but carries risk of margin calls.
Term
Meaning
Description
Margin Call
A broker’s demand for additional funds to maintain a position.
Occurs when account value falls below maintenance margin.
Term
Meaning
Description
Margin of Safety
The difference between an asset’s intrinsic value and its market price.
Provides a buffer against errors or market volatility.
Term
Meaning
Description
Mark-to-Market Losses
Unrealized losses from updating asset values to current market prices.
Affects daily portfolio valuation and financial statements.
Term
Meaning
Description
Market Abuse
Illegal practices that distort market integrity.
Includes insider trading, price manipulation, and false disclosures.
Term
Meaning
Description
Market Breadth
A measure of how many stocks are advancing vs. declining.
Used to assess the strength of a market trend.
Term
Meaning
Description
Market By Order
A view showing real-time pending buy/sell orders by price.
Helps traders analyze order flow and market depth.
Term
Meaning
Description
Market Cap Mutual Funds
Funds categorized by the market capitalization of holdings.
Includes large-cap, mid-cap, and small-cap funds.
Term
Meaning
Description
Market Capitalization
The total value of a company’s outstanding shares.
Calculated by multiplying share price with number of shares.
Term
Meaning
Description
Market Capitalization Weighted Index
An index where companies with larger market caps have more influence.
Common in indices like S&P 500 or KSE-100.
Term
Meaning
Description
Market if Touched
An order that becomes active once a specific price is reached.
Executes at best available price after the trigger is hit.
Term
Meaning
Description
Market Maker
A firm or individual that provides liquidity by quoting buy/sell prices.
Earns profit through bid-ask spreads.
Term
Meaning
Description
Market Microstructure
The study of how markets operate and execute trades.
Analyzes behavior of traders, brokers, and systems involved.
Term
Meaning
Description
Market Momentum
The speed and strength of price movement in a market or stock.
Indicates buying or selling pressure and helps predict trend continuation.
Term
Meaning
Description
Market On Close (MOC)
An order to execute at the market’s closing price.
Used by traders seeking to match end-of-day benchmarks.
Term
Meaning
Description
Market Order
An order to buy or sell immediately at the best available price.
Guarantees execution but not the price.
Term
Meaning
Description
Market Portfolio
A theoretical portfolio including all investable assets in the market.
Used in CAPM to represent a fully diversified portfolio.
Term
Meaning
Description
Market Price
The current price at which an asset can be bought or sold.
Determined by supply and demand in real-time.
Term
Meaning
Description
Market Risk
The potential for losses due to overall market movement.
Also called systematic risk — cannot be diversified away.
Term
Meaning
Description
Market Timing
The strategy of trying to predict market movements for entry/exit.
Considered risky and difficult to execute consistently.
Term
Meaning
Description
Market Value
The actual worth of an asset in the current market.
Reflects what a willing buyer would pay today.
Term
Meaning
Description
Market-on-Close (MOC) Order
An order that executes at the market’s closing price.
Used to track index closings or reduce slippage.
Term
Meaning
Description
Marketable
A security that can be quickly sold in the market.
Includes stocks, bonds, and mutual funds with high liquidity.
Term
Meaning
Description
Maturity
The end date of a bond or financial instrument.
At maturity, the principal is repaid to the investor.
Term
Meaning
Description
Mean Reversion
The theory that prices eventually return to their average.
Used in technical analysis and quantitative strategies.
Term
Meaning
Description
Memorandum of Understanding
A non-binding agreement outlining mutual intentions.
Used in business deals or partnerships before a formal contract.
Term
Meaning
Description
Mezzanine Financing
A hybrid of debt and equity used for business expansion.
Offers high returns but carries higher risk.
Term
Meaning
Description
Minimum Shares to trade
The smallest number of shares allowed per trade.
Set by exchanges to maintain trading efficiency.
Term
Meaning
Description
Money Market
A segment of the financial market for short-term debt instruments.
Includes treasury bills, commercial paper, and certificates of deposit.
Term
Meaning
Description
Monopoly
A market structure where a single seller controls the market.
Can lead to high prices and limited consumer choice.
Term
Meaning
Description
Monte-Carlo Simulation
A technique using random sampling to model uncertainty.
Used in portfolio management and risk analysis.
Term
Meaning
Description
Morning Star
A bullish candlestick reversal pattern.
Signals a potential shift from a downtrend to an uptrend.
Term
Meaning
Description
Moving Average
An average of past prices over a set period.
Smooths out price data to identify trends.
Term
Meaning
Description
MSCI
A global provider of market indices and analytics.
Their indices are widely used for benchmarking international portfolios.
Term
Meaning
Description
MUFAP
Mutual Funds Association of Pakistan.
The regulatory and representative body for mutual fund companies in Pakistan.
Term
Meaning
Description
Mutual Fund
An investment vehicle that pools money from many investors.
Managed by professionals and diversified across assets.
Term
Meaning
Description
MZNPI Index
Meezan Pakistan Index for Shariah-compliant investments.
Tracks performance of Islamic stocks listed on PSX.
Term
Meaning
Description
Naked Short Selling
Selling shares without borrowing them first.
Illegal in many markets due to risk of price manipulation.
Term
Meaning
Description
Naked Warrant
A warrant not attached to another security.
Gives the right to buy shares without holding the underlying bond.
Term
Meaning
Description
NBPPGI-Index
NBP Pakistan Growth Index.
A benchmark for performance of growth-focused investment funds.
Term
Meaning
Description
NCCPL
National Clearing Company of Pakistan Limited.
Handles clearing and settlement of trades on PSX.
Term
Meaning
Description
Negotiable
An asset that can be legally transferred from one party to another.
Used in checks, promissory notes, and securities.
Term
Meaning
Description
Negotiated Market
A market where trade terms are agreed privately.
Contrasts with auction markets where prices are publicly set.
Term
Meaning
Description
Net Asset Value
The per-share value of a mutual fund or ETF.
Calculated by dividing total assets minus liabilities by the number of shares.
Term
Meaning
Description
Net Present Value
The current value of future cash flows discounted back to today.
Used to evaluate the profitability of projects.
Term
Meaning
Description
New Issue
A security being offered to the public for the first time.
Includes IPOs or newly issued bonds.
Term
Meaning
Description
Nikkei
A major Japanese stock market index.
Tracks the performance of 225 large companies on the Tokyo Stock Exchange.
Term
Meaning
Description
NITPG Index
National Investment Trust Portfolio Growth Index.
Used for benchmarking mutual funds in Pakistan.
Term
Meaning
Description
Noise Trader
A trader influenced by emotion or misinformation.
Often creates short-term volatility without solid fundamentals.
Term
Meaning
Description
Nominee
A person or firm holding securities on behalf of the real owner.
Used in custody services and brokerage accounts.
Term
Meaning
Description
Non-Cumulative Preference Shares
Preferred shares that don’t accumulate unpaid dividends.
If a dividend is skipped, it is not owed later.
Term
Meaning
Description
Not Applicable (to P/E ratio)
Used when a company has negative earnings.
Makes the price-to-earnings ratio invalid or meaningless.
Term
Meaning
Description
Notary Public
A person authorized to witness signatures on legal documents.
Ensures authenticity and prevents fraud.
Term
Meaning
Description
Notional Value
The total value of a position without considering leverage.
Used in derivatives to calculate exposure.
Term
Meaning
Description
Odd Lot
A share quantity less than the standard trading unit (usually 100).
May have different pricing or execution rules.
Term
Meaning
Description
Odd Lot Buyback
A company’s repurchase offer for shareholders with odd lots.
Encourages small investors to exit conveniently.
Term
Meaning
Description
Offering Document
A formal paper outlining details of a fund or security offering.
Includes objectives, risks, and fee structures.
Term
Meaning
Description
Offering Price
The price at which a new security is sold to the public.
Set during IPOs or new fund launches.
Term
Meaning
Description
OHLC Chart
A chart showing Open, High, Low, and Close prices.
Used in technical analysis for daily or intraday trading.
Term
Meaning
Description
Oligopoly
A market dominated by a few large firms.
Can lead to pricing power and reduced competition.
Term
Meaning
Description
Open Interest
The total number of outstanding derivative contracts.
Used to gauge market activity and liquidity.
Term
Meaning
Description
Open Market Operation
The buying/selling of government securities by a central bank.
Used to control money supply and interest rates.
Term
Meaning
Description
Open Position
An active trade that hasn’t been closed or settled.
Exposes the trader to market gains or losses.
Term
Meaning
Description
Open-End Fund
A mutual fund that issues and redeems shares at NAV.
Shares can be bought or sold at any time based on the fund’s current net asset value.
Term
Meaning
Description
Open-End Management Company
A firm that manages open-end mutual funds.
Responsible for fund administration, investment decisions, and compliance.
Term
Meaning
Description
Optionable Stock
A stock for which options contracts are available.
Allows investors to trade options for hedging or speculation.
Term
Meaning
Description
Original Issue Discount
A bond sold below its face value.
The difference between purchase price and face value is treated as interest income.
Term
Meaning
Description
Over-The-Counter
A decentralized market for trading securities not listed on formal exchanges.
Includes small-cap stocks, bonds, and derivatives.
Term
Meaning
Description
Oversubscribed
When demand for an IPO or issue exceeds the supply.
Indicates strong investor interest and often leads to price increases.
Term
Meaning
Description
Overtrading
Engaging in excessive buying and selling.
Can lead to higher costs and reduced returns due to frequent commissions or poor timing.
Term
Meaning
Description
Overvalued Stock
A stock priced higher than its intrinsic value.
May be driven by hype or market sentiment rather than fundamentals.
Term
Meaning
Description
Paid-Up Capital
The total amount of money shareholders have paid for shares.
Represents funds received by the company for issued shares.
Term
Meaning
Description
Panic Buying
Rushed purchases due to fear of missing out.
Can drive prices higher quickly, often not based on fundamentals.
Term
Meaning
Description
Panic Selling
Rushed selling due to fear of loss.
Often occurs during market downturns, causing prices to fall further.
Term
Meaning
Description
Par Value/ No Par Value Stock
The nominal value of a stock stated in the charter.
No par value stocks are issued without a specified face value.
Term
Meaning
Description
Parent Company
A company that owns controlling interest in another company.
Controls subsidiaries and consolidates financial statements.
Term
Meaning
Description
Participant
A member of a financial market or investment fund.
Includes traders, brokers, or investors involved in transactions.
Term
Meaning
Description
Passive Management
A strategy that tracks market indices without active trading.
Aims to match, not beat, market performance at low cost.
Term
Meaning
Description
Penny Stock
A low-priced stock with high volatility.
Often trades over-the-counter and carries higher risk.
Term
Meaning
Description
Phantom Stock
Stock-based compensation without actual share ownership.
Provides value equivalent to stock performance or dividends.
Term
Meaning
Description
Portfolio
A collection of investments held by an individual or institution.
Includes stocks, bonds, real estate, and other assets.
Term
Meaning
Description
Portfolio Diversification
The practice of spreading investments across asset classes.
Reduces risk by avoiding concentration in one area.
Term
Meaning
Description
Power of Attorney
A legal document granting authority to act on another’s behalf.
Used in financial decisions, account access, or trading rights.
Term
Meaning
Description
Pre-IPO
A stage before a company goes public.
Investors can purchase equity before shares are listed on an exchange.
Term
Meaning
Description
Pre-Open Market
A brief session before the market opens.
Allows placing, modifying, or canceling orders before trading begins.
Term
Meaning
Description
Preferred Stock
A class of ownership with fixed dividends and priority over common stock.
Usually doesn’t carry voting rights.
Term
Meaning
Description
Price
The current value of a stock or asset.
Determined by supply and demand in the market.
Term
Meaning
Description
Price Discovery
The process of determining the market price through buyer and seller interaction.
Occurs in auctions, exchanges, and OTC markets.
Term
Meaning
Description
Price/Earning Ratio
A valuation metric comparing stock price to earnings per share.
Helps assess if a stock is overvalued or undervalued.
Term
Meaning
Description
Primary Market
The market where new securities are issued and sold to investors.
Includes IPOs and bond offerings.
Term
Meaning
Description
Profit
The financial gain when revenue exceeds expenses.
Represents the success of a business or investment.
Term
Meaning
Description
Prospectus
A legal document detailing an investment offering.
Includes risks, objectives, fees, and management information.
Term
Meaning
Description
Proxy
A person authorized to vote on behalf of a shareholder.
Used during annual general meetings or corporate votes.
Term
Meaning
Description
Proxy Vote
A shareholder vote cast by another person or entity.
Allows participation without being physically present.
Term
Meaning
Description
Purchase
The act of buying a security or asset.
Part of investment transactions in various markets.
Term
Meaning
Description
Put-Option
A contract giving the right to sell an asset at a set price.
Used to hedge or profit from a decline in asset value.
Term
Meaning
Description
Q Ratio
A measure of market valuation vs. asset replacement cost.
A ratio above 1 suggests overvaluation; below 1 implies undervaluation.
Term
Meaning
Description
Quantitative Tightening (QT)
A central bank policy to reduce money supply.
Opposite of quantitative easing, usually by selling assets or halting bond purchases.
Term
Meaning
Description
Quasi-Public Corporation
A company with government and private ownership.
Operates commercially but serves public interest (e.g., utilities).
Term
Meaning
Description
Quick Ratio
A liquidity ratio comparing quick assets to current liabilities.
Measures a company’s ability to meet short-term obligations without inventory.
Term
Meaning
Description
Rate of Return
The gain or loss on an investment over time.
Expressed as a percentage of the initial investment.
Term
Meaning
Description
RDA – Roshan Digital Account
An account for overseas Pakistanis to invest in Pakistan.
Offers access to banking, stock market, and real estate remotely.
Term
Meaning
Description
Re-Investment
Using returns or dividends to buy more of the same investment.
Helps compound growth over time.
Term
Meaning
Description
Re-offer Price
The price at which a bond is sold after the initial issue.
Can be higher or lower than face value depending on market conditions.
Term
Meaning
Description
Real Interest Rate
The interest rate adjusted for inflation.
Reflects the true purchasing power of investment returns.
Term
Meaning
Description
Recession
A period of economic decline across sectors.
Characterized by falling GDP, employment, and business activity.
Term
Meaning
Description
Redemption
The process of repaying an investor’s principal at maturity.
Applies to bonds, mutual funds, or preferred shares.
Term
Meaning
Description
Registrar
A party responsible for maintaining shareholder records.
Handles registration, dividends, and corporate communications.
Term
Meaning
Description
Registrar Function
Administrative tasks performed by the registrar.
Includes processing transfers, issuing statements, and maintaining records.
Term
Meaning
Description
Regular / Ready Market
A market where securities are traded for immediate settlement.
Opposite of forward or futures markets.
Term
Meaning
Description
REI – Roshan Equity Investment
Stock market investment facility through Roshan Digital Account.
Allows overseas Pakistanis to trade in Pakistan’s equity market.
Term
Meaning
Description
Relative Strength Index
A technical indicator measuring price momentum.
Used to identify overbought or oversold conditions.
Term
Meaning
Description
Repurchase Agreement (Repo)
A short-term loan using securities as collateral.
Used by central banks and institutions to manage liquidity.
Term
Meaning
Description
Retail Investors
Individual investors who buy and sell securities for personal accounts.
Typically invest smaller amounts compared to institutions.
Term
Meaning
Description
Retained Earning
Company profits kept rather than distributed as dividends.
Used for reinvestment, debt reduction, or expansion.
Term
Meaning
Description
Retirement Age
The age at which a person typically stops working.
Varies by country, policy, or individual financial goals.
Term
Meaning
Description
Retirement Date
The scheduled date when an individual retires from work.
Marks the start of pension or retirement income benefits.
Term
Meaning
Description
Return
The profit or loss from an investment over a period.
Expressed as a percentage of the initial investment.
Term
Meaning
Description
Return on Invested Capital
A measure of a company’s efficiency in generating returns on capital.
Higher ROIC indicates better use of capital to generate profit.
Term
Meaning
Description
Return on Investment
The gain or loss compared to the amount invested.
Used to assess investment performance.
Term
Meaning
Description
Reverse Repo
A central bank tool where it borrows money by selling securities with a promise to buy back.
Used to control liquidity in the banking system.
Term
Meaning
Description
Reverse Stock Split
A corporate action that consolidates shares.
Increases share price by reducing the number of outstanding shares.
Term
Meaning
Description
Right Issue
An offer to existing shareholders to buy more shares at a discount.
Allows companies to raise capital without issuing to the public.
Term
Meaning
Description
Right Share
New shares offered in a rights issue.
Can be accepted, sold, or allowed to expire by existing shareholders.
Term
Meaning
Description
Rights Offering
A way for companies to raise capital by offering new shares to current shareholders.
Usually at a price below the market rate.
Term
Meaning
Description
Risk
The possibility of losing part or all of an investment.
All investments carry some degree of risk.
Term
Meaning
Description
Risk Adjusted Return on Capital
A performance measure factoring in investment risk.
Helps compare returns on a risk-weighted basis.
Term
Meaning
Description
Rule of 72
A formula to estimate how long it takes to double an investment.
Divide 72 by the interest rate to get the number of years.
Term
Meaning
Description
Rules
A set of regulations or guidelines for financial markets or instruments.
Ensure fair and transparent operation of financial systems.
Term
Meaning
Description
S&P 500 Index
A benchmark index of 500 leading U.S. companies.
Used to track overall stock market performance.
Term
Meaning
Description
Sales Agent
An individual or company authorized to sell investment products.
May work for brokers, fund houses, or insurance firms.
Term
Meaning
Description
Sales Load
A commission charged when buying or selling mutual fund units.
Can be front-end, back-end, or level load fees.
Term
Meaning
Description
Scalping
A trading strategy focused on small, quick profits.
Involves multiple trades throughout the day.
Term
Meaning
Description
Scrip
A substitute for cash dividends issued in the form of shares.
May be temporary or represent a bonus issue.
Term
Meaning
Description
Seasonal Stock
Stocks that perform well in specific seasons.
Examples include retail before holidays or air conditioning companies in summer.
Term
Meaning
Description
Secondary Market
The market where previously issued securities are traded.
Includes stock exchanges and OTC markets.
Term
Meaning
Description
SECP Commission
The Securities and Exchange Commission of Pakistan’s regulatory charges.
Collected for monitoring and compliance services.
Term
Meaning
Description
Sector
A specific industry or market segment.
Examples: technology, healthcare, energy.
Term
Meaning
Description
Securities Lending
The temporary loan of securities to other investors.
Used for short selling and earns lenders additional income.
Term
Meaning
Description
Securitization
The process of converting assets into tradeable securities.
Example: bundling mortgages into mortgage-backed securities.
Term
Meaning
Description
Security
A tradable financial asset like a stock, bond, or option.
Represents ownership, debt, or rights in an entity.
Term
Meaning
Description
Semi-Strong Market
A form of market efficiency where all public information is reflected in prices.
Part of the Efficient Market Hypothesis.
Term
Meaning
Description
Settlement
The process of transferring securities and funds after a trade.
Typically takes T+1 or T+2 days depending on the market.
Term
Meaning
Description
Share
A unit of ownership in a company.
Entitles the holder to profits and voting rights (in case of common stock).
Term
Meaning
Description
Shareholder Value Added (SVA)
A metric showing value created for shareholders.
Measured by comparing net operating profit to cost of capital.
Term
Meaning
Description
Shareholders’ Equity
The residual interest in assets after liabilities are deducted.
Represents ownership value in a company.
Term
Meaning
Description
Shariah
Islamic law governing ethical and financial practices.
Prohibits interest (riba), gambling (maysir), and uncertainty (gharar).
Term
Meaning
Description
Shariah Advisor
An expert ensuring financial products comply with Islamic principles.
Reviews and certifies investments for Shariah compliance.
Term
Meaning
Description
Shariah Compliant
Conforms to Islamic financial principles.
Excludes interest-based or non-halal businesses.
Term
Meaning
Description
Shariah Compliant Fund
An investment fund that follows Islamic guidelines.
Invests in halal businesses and avoids interest or speculation.
Term
Meaning
Description
Sharpe Ratio
A measure of risk-adjusted return.
Compares excess return over risk-free rate to investment volatility.
Term
Meaning
Description
Short Selling
Selling borrowed shares with the intention to buy back at a lower price.
Profits from falling stock prices.
Term
Meaning
Description
Single Stock ETF
An exchange-traded fund focused on a single company’s stock.
Offers leveraged or inverse exposure to that stock’s movement.
Term
Meaning
Description
Single Stock Futures
A futures contract based on the value of a single stock.
Allows speculation or hedging on individual company performance.
Term
Meaning
Description
Solvency Ratio
A measure of a company’s ability to meet long-term obligations.
