Glossary

Call	The right for the investor to purchase a prescribed number of shares at a specific price on or before a specific date.
Callable Bond	Bonds that may be redeemed by the issuer prior to the stated maturity date.
Call Option	An option that gives the buyer the right, but not the obligation, to purchase the underlying stock at a given price (the strike price) by a given time (the expiration date).
Canceled Order	A buy or sell order that has been cancelled prior to its execution.
Capital Gain	Profit made on securities by selling the security for a higher price than was paid for that security.
Capital Markets	A market where securities are bought and sold.
Capital Market Efficiency	The degree to which the present asset price accurately reflects current information in the market place.
Capital Stock	The amount of money or property contributed by stockholders to be used as the financial foundation for a corporation, including common and preferred stock.
Capitalization	The debt and/or equity mix that funds a firm's assets.
Cash Dividend	A dividend paid in cash to a company's shareholders. The amount is normally based on profitability and is taxable as income. A cash distribution may include capital gains and return of capital in addition to the dividend.
Cash Flow	Cash flow represents earnings before depreciation, amortization, and non-cash charges. Sometimes called cash earnings. Cash flow from operations (called funds from operations by real estate and other investment trusts) is important because it indicates the ability to pay dividends.
Cash Investments	Short-term debt instruments -such as commercial paper, banker's acceptances, and Treasury bills- that mature in less than one year. Also known as money market instruments or cash reserves.
Cash Markets	Also called spot markets, these are markets that involve the immediate delivery of a security or instrument.
Cash Settlement	A settlement method used in certain future and option contracts whereby, upon expiry or exercise, the seller of the securities does not deliver the actual but transfers the associated cash position.
Central Bank	A country's main bank whose responsibilities include the issue of currency, the administration of monetary policy, open market operations, and engaging in transactions designed to facilitate healthy business interactions.
Certificate	The piece of paper that is evidence of ownership of stock in a company. All Certificates are deemed canceled upon the deposit of securities.
Certificate of Deposit	A short-term debt security with maturity from a few weeks to several years.
CFI Code	The Classification of Financial Instruments (CFI) consists of six alphabetical characters that classify financial instruments reflecting the financial instrument characteristics since its issue and remain unchanged during its entire lifetime. The first letter is the category, the second is the group, and the remaining letters show special attributes of the group since its issue and remain unchanged during its entire lifetime, according to ISO standard 10962
Chief Executive Officer (CEO)	The person principally responsible for the activities of a company.
Clearance	The post-trade and pre-settlement matching of trade details for the purpose of confirming the trade and allowing settlement.
Clearinghouse	A computerized facility that compares and reconciles both sides of a brokerage trade.
Closed-End Mutual Fund (Fixed Capital Mutual Fund)	A mutual fund that has shares which are readily transferable in the open market and are bought and sold like shares of stock. The number of fund shares remains finite, as opposed to an open-end mutual fund.
Closing Price	The price of the last trading transaction in a trading session, executed on a specific security.
Collateralized Bond	Bonds that are backed by the assets the issuer puts up as collateral for the issue (e.g., equipment or real estate).
Commercial Paper	Short-term unsecured promissory note issued in the open market as an obligation of the issuing entity.
Commingling	Mixing customer-owned securities with those owned by a firm in its proprietary accounts.
Commission	The broker's basic fee for purchasing or selling securities on behalf of another party, usually a percentage of the amount of the transaction.
Common Stock	A corporation generally issues two types of shares: Common stock and preferred stock. Common stock is issued first and represents the “basic” ownership in a corporation. Owners of common stock share directly in the success or failure of the business. A corporation only issues preferred stock after common stock has been issued. Dividends are distributed to preferred stockholders before being distributed to common stockholders, and in case the company is forced to liquidate its assets preferred stockholders are entitled to receive the money they have invested before common stockholders receive theirs. Companies can also issue several classes of stock, often labeled A, B, C and so on. The different classes have different dividend payments and different restrictions on ownership.
Company	A proprietorship, partnership, corporation, or any form of legal entity that engages in business, which can focus on pursuing set objectives, and empowered with legal rights which are usually only reserved for individuals, such as to sue and be sued, own property, hire employees or loan and borrow money.
Continuous Net Settlement	A system whereby all pending settlements in a given security are continuously combined by issue to create the smallest net deliveries at the end of the day. Any unsettled, or failed, transaction is continued, or carried over and offset against the next day's trades.
Controller	The corporate manager responsible for the firm's accounting activities. Sometimes referred to as the comptroller.
Convertible Bond	A bond that is able to be converted, or traded in, for another security at the option of the bondholder.
Corporate Action	Restructuring the ownership of a company, through an action such as a stock split or conversion.
Corporate Bond	A debt certificate issued by a corporation without giving the holder of the certificate ownership in the company.
Cost	An expense that reflects the price of purchasing goods, services and financial instruments. Also, the purchase price of an investment, which is compared to the sale proceeds to determine capital gain or loss.
Counterparties	The parties on either side of an interest rate swap or a currency, equity or commodity swap, or to an options or futures position.
Counterparty Risk	The risk that the other party to an agreement will default.
Coupon	The interest payment on a debt instrument, usually annually or semiannually.
Credit	Money loaned.
Credit Balance	The surplus in a cash account with a broker after purchases have been paid for, plus the extra cash from the sale of securities.
Creditor	Lender of money.
Credit Ratings	Independent evaluations of the credit of companies and governments and the ability of these institution to repay debt obligations.
Cross Border Trading	Trading which takes place between persons or entities from different countries.
Cross Execution	See Cross Trade>
Cross Trade	An order to buy and an order to sell a specific security, placed within one broker, for the same quantity, and for the same price (also called Crossing or Cross Execution).
Current Assets	A company's assets that are expected to be realized in cash, sold, or consumed within the next year.
Current Liabilities	Money owed by a company to be paid within the next year.
Current Ratio	Calculated by dividing the total current assets for a given period by the total current liabilities for the same period.
Current Yield	A percentage measure of how much income is being derived from a security. The formula is calculated by dividing the annual payment (through dividends or interest) to the holder of the security divided by the following number: current price of the security divided by 100 times the quantity of the security.
Cushion Bond	A callable bond that is not as sensitive to interest rate fluctuations because of its early call option.
Custodial Fees	Fees charged by an institution that holds securities in safekeeping for an investor.
Custodian	Financial institution that maintains custody of stock certificates for institutional individual clients.
Custody	Safekeeping of securities for institutions and individuals generally including settlement of trades, collection of income, and processing of corporate actions.