Glossary

Paid-in Capital	Capital received from investors in exchange for stock, but not stock from capital generated from earnings or donated. This account includes capital stock and contributions of stockholders credited to accounts other than capital stock. It would also include surplus resulting from recapitalization.
Par Value	The principle amount that will be paid at a debt instrument's maturity.
Paying Agent	The place or company where the principal and interest are payable.
Per Annum	Yearly.
Perfected First Lien	A first attachment on an asset that is duly recorded with the relevant government body so that the lender will be able to act on it should the borrower default.
Physical Delivery	The actual delivery of a stock certificate.
Pledge	the commitment of securities to serve as collateral for the payment of a debt, and subject to forfeiture on failure to pay.
Portfolio	The group of investments and cash held by an individual.
Portfolio Diversification	Investing in different asset classes and in securities of many issuers in an attempt to reduce overall investment risk and to avoid damaging a portfolio's performance by the poor performance of a single security, industry, (or country).
Position	A market commitment to buy or sell a security. A buyer of a financial instrument is said to have a long position and, conversely, a seller of financial instrument is said to have a short position.
Power of Attorney	A written authorization allowing a person to perform certain acts on behalf of another, such as moving of assets between accounts or trading for a person's benefit.
Preferred Stock	A corporation generally issues two types of shares: Common stock and preferred stock. Common stock is issues 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. Preferred shares can be Participating or Non-Participating. Participating preferred shareholders receive a dividend payment proportional to the company's profit, while non-participating preferred shareholders get a fixed dividend payment, usually a percentage of the par value. Preferred shares can be either Cumulative or Non-Cumulative, depending on whether the dividend payment due to shareholders accumulates since the issue date. Preferred shares can also feature embedded options. For instance, some preferred shares are Callable, if the company has the right to repurchase the issue at a specific price, while others are Convertible, they grant the holder the right to convert the preferred shares into common shares of the company. In exchange for these benefits, preferred stockholders, contrary to common stockholders, are not entitled to vote or have limited voting rights. 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.
Premium Bond	A bond with a selling price that is above its face (par) value.
Price/Book Ratio	Calculated by dividing a stock's price by its book value per share. Used to assess whether a stock is overvalued or undervalued.
Price Limit Order	An order that specifies the price at which the trade can be executed.
Price to Earnings Ratio (P/E Ratio)	Calculated by dividing the current price of a stock by the reported actual or forecasted earnings per share of the issuing firm.
Primary Market	The market in which financial instruments are issued for the first time. After issuing on the primary market, the stock is then sold to the public in the secondary market.
Primary Offering	Direct/Sale of a firm's newly issued shares by the firm to investors.
Prime Rate	The interest rate banks charge their most creditworthy clients. Most banks charge a few points above the prime rate on mortgages and other personal loans.
Principal	The original amount or face value of a bond or certificate of deposit.
Private Placement	The sale of a bond or other security directly to a limited number of investors.
Privatization	The act of a government transferring state-owned or state-run companies to the private sector, usually by selling them.
Prospectus	A document detailing a new offer for public securities. The prospectus provides financial background information of the issuing company, how the proceeds from the sale of securities will be used, and other information that aids a potential investor in deciding whether or not to participate in the new issue.
Proxy	Written authorization by a shareholder to allow someone else to represent him and his vote at a corporation's annual shareholders' meeting.
Public Shareholding Company	A company whose shares may be purchased by the public and whose share capital is not less than a statutory minimum.
Put Option	An option granting the right to sell the underlying futures contract. Opposite of a call.

Offer Price	The price for which a seller is willing to sell his security holding (also called Ask Price).
Offering Date	Date on which a new set of stocks or bonds will first be sold to the public.
Offset	Elimination of a long or short position by making an opposite transaction.
One-Share-One-Vote Rule	The principle that all shareholders should have equal voting rights in public companies and each shareholder should have one vote.
Open-End Mutual Fund (Variable Capital Mutual Fund)	A mutual fund where the capitalization is not fixed. The mutual fund company will continually sell or redeem its own shares to meet investor demand, as opposed to a Closed-End Mutual Fund.
Open Order	An order that has been placed with the broker, but not yet filled or cancelled.
Open Price	The price of an order sent in the pre opening phase to buy or to sell a security at the opening price (IEP).
Opening Price	The price of the first trading transaction in a trading session, executed on a specific security.
Operating Expenses	The amount paid for asset maintenance or the cost of doing business, excluding depreciation.
Option	The right to buy or sell a security at a particular ask or bid price.
Optional Dividend	A dividend that the shareholder can elect to receive either in cash or in stock.
Order	A request to buy or sell a security at a particular ask or bid price.
Ordinary Order	An order to buy or sell a specific security, which the broker can offer or demand through the trading system.
Outstanding Dividends	Dividend checks which have been mailed to shareholders of record but not yet cashed. Funds are held until the check is paid or reissued.
Overnight Position	A broker-dealer's position in a security at the end of a trading day.
Oversubscribed Issue	Investors are not able to buy all the shares or bonds they want, so underwriters must allocate the shares or bonds among investors. This occurs when a new issue is underpriced or in great demand because of growth prospects.
Oversubscription	The excess number of shares or bonds that investors want to buy but are not available due to high demand.
Over-the-Counter Market	The market where securities are bought and sold directly between the purchaser and seller.
Owners' Equity	See Stockholders' Equity.

Management	The people who administer a company, create policies, and provide the support necessary to implement the owners' business objectives.
Manipulation	The illegal act of buying or selling securities for the purpose of creating a misleading impression of market activity to induce the purchase or sales of securities by others.
Margin	Allows investors to buy securities by borrowing money from a broker. The margin is the difference between the market value of a stock and the loan a broker makes.
Margin Account	An account where the brokerage firm lends a customer money for purchases of securities or securities for short sale.
Margin Call	A margin call is literally a call from your broker asking you to put money into your margin account. The margin call usually occurs when the value of your investment falls below 75% of its original value and is designed to bring your net asset value back to its original amount.
Margin Security	Security that may be bought or sold in a margin account.
Margin Trading	Buying on Margin means buying with borrowed money. Usually your broker can lend you money to buy on margin if you open a margin account. Under most regulations you are permitted to borrow up to 50% of the purchase price of a stock and do not have to repay what borrowed until you sell the stock. Margin buying gives you leverage. In financial terms, leverage means using a little of your own money to control the rights to something of greater value. In this case, your broker is only concerned with receiving the amount loaned plus interest. Any profit from your purchase is yours to keep. The advantage of buying on margin is straightforward: your gains on a percentage basis are magnified. The disadvantage however is that your losses are magnified as well. Margin rules dictate that when the stock price falls, only the amount you have invested in loses value. The broker's loan amount does not change. Some stocks might even lose so much value that selling them will not raise enough money to repay your loan. To protect the brokers from this problem, brokers put out a Margin call.
Markdown	The amount subtracted from the selling price of securities when they are sold to a dealer in the OTC market. Also, the discounted price of municipal bonds after the market has shown little interest in the issue at the original price.
Marketable Securities	Securities that are easily convertible to cash because there is high demand allowing them to be sold quickly.
Marketability	A measure of ease or difficulty with which a security can be resold in the secondary market. Good marketability indicates that there is an active market in which the security can be resold.
Market Capitalization	The value of shares on an exchange. This value is calculated by multiplying the current price of shares by the number of current listed shares,also referred to as Market Cap.
Market Index	Market measure that consists of weighted values of the components that make up certain list of companies. A stock market tracks the performance of certain stocks by weighting them according to their prices and the number of outstanding shares by a particular formula.
Market Opening	The start of formal trading on an exchange.
Market Order	An order to buy or sell a stock at the market's current best displayed price, given one's position.
Market Price	The order price which is the best-bid price in case of a buying order, or the best-ask price in case of a selling order.
Market Value-Weighted Index	An index of a group of securities computed by calculating a weighted average of the returns on each security in the index, where the weights are proportional to outstanding market value.
Mark-to-Market	An arrangement whereby the profits or losses on a futures contract are settled each day.
Matching	Comparison of the terms of a trade to ensure the details from both parties match.
Maturity Date	The date a debt security expires and the date that the principal amount of the debt must be paid by the borrower to the investor.
Merger	A voluntary combination of two or more companies whereby both stocks are merged into one.
Money Market	Money markets are for borrowing and lending money for three years or less. The securities in a money market can be government bonds, Treasury bills and commercial paper from banks and companies.
Money Market Funds	Funds where borrowing and lending is for a period of less than one year, including certificates of deposit, repurchase agreements, and treasury bills.
Money Supply	The amount of money in a given economy, consisting primarily of currency in circulation and deposits by banks. There exist a number of different measures of the money supply, among them M1 and M2.
Money Supply (M1)	Equals the currency with the public plus demand deposits in Jordanian dinar with the banking system of the private sector (resident), public entities, and non-banking financial institutions, plus demand deposits of other banking institutions in Jordanian dinar with the Central Bank of Jordan only.
Money Supply (M2)	Equals the money supply (M1) plus quasi-money. On the asset side, it equals net domestic assets plus net foreign assets of the banking system.
Mortgage-Backed Bonds	Bonds that are secured by pools of mortgages.
Multilateral Netting	A process conducted by the Security Depository Center whereby trades in the same security are netted regardless of who the counterparty is and a net cash and security position is settled for each participant.
Municipal Bonds	Bonds issued by local governments for the purpose of raising capital for a city or district.
Mutual Fund	An established investment fund whereby an investment company pools funds from investors in order to purchase a wide variety of financial instruments that will meet the fund's investment goals.

Leading Indicators	Market statistics that signal the state of the economy for a given period of time, such as unemployment rate, housing starts, and change in money supply.
Legal Entity	A person or organization that can legally enter into a contract, and may therefore be sued for failure to comply with the terms of the contract.
Legislation	Written and approved laws.
Lending Securities	Securities borrowed from a broker's inventory, other margin accounts, or from other brokers when a customer makes a short sale and the securities must be delivered to the buying customer's broker.
Leverage	The ratio of debt to equity to finance a company's operations and new projects. A company is highly leveraged if it is using a large proportion of debt (i.e., bonds or loans) versus equity to finance its operations.
Liabilities	The claims against a corporation, including, but not limited to, accounts payable, salaries payable, dividends declared payable, debenture bonds, and bank loans.
Lien	An attachment that gives the lender the right to seize the personal ownership of a borrower who has not fulfilled the obligations of the loan, but prevents the lender from seizing real ownership.
Limit Down	The minimum price change allowed for a commodity futures contract per trading day.
Limit Order	An order to buy or sell a stock at a customer specified price.
Limit Up	The maximum price change allowed for a commodity futures contract per trading day.
Linkage	The ability to buy or sell a contract on one exchange and sell or buy the contract on another exchange.
Liquid Asset	Asset that is easily and cheaply turned into cash-notably, cash itself and short-term securities.
Liquidation	Occurs when a firm's business is terminated. Assets are sold, proceeds are used to pay creditors, and any leftovers are distributed to shareholders. Any transaction that offsets or closes out a long or short position.
Liquidity	Ease with which a security can be traded on the market.
Listed Securities	Stock or bond that has been accepted for trading at the Amman Stock Exchange.
Loan	Temporary borrowing of a sum of money.
Locked-in Trades	Matched trades which are guaranteed to settle as initially entered on trade date.
Long	The position of an individual who has bought financial instruments.
Low Price	The day's lowest price of a security that has changed hands between a buyer and a seller.

Key Industry

An industry that plays a critical role in a nation's economy.

Joint Account	An agreement between two or more firms to share risk and financing responsibility in purchasing or underwriting securities, or an account owned jointly by two or more persons at a bank or brokerage house.
Jordan Securities Commission (JSC)	An institution in charge of regulating and supervising the capital market in Jordan. The objectives of the JSC are to create a sound regulatory environment in order to ensure a transparent securities market in the Kingdom and to protect shareholders, investors, and the public from irregular market practices.

Illiquid	In the context of corporate finance, the absence of cash flow needed to fulfill financial debts and meet obligations. In the context of investments, describes a thinly traded investment such as a stock or bond that is not easily converted into cash. Illiquid securities have high transactions costs. Often the bid-ask spread is very wide.
Imbalance of Orders	Used for listed equity securities. Too many market orders of one kind-buy or to sell or limit orders to buy up or sell down, without matching orders of the opposite kind. An imbalance usually follows a dramatic event such as a takeover, research recommendation, or death of a key executive, or a government ruling that will significantly affect the company's business. If it occurs before the stock exchange opens, trading in the stock is delayed. If it occurs during the trading day, the specialist halts and then suspends trading (with floor governor's approval) until enough matching orders can be found to make an orderly market.
Immobilization	Process that occurs when the central depository vaults share certificates and converts them into book based positions.
Income Fund	A mutual fund that seeks to provide to liberal current income from investments.
Income Statement	A report on a company's financial status describing revenues and expenses over a specific period of time.
Income Stock	Common stock with a high dividend yield and few profitable investment opportunities.
Index	Statistical composite that measures changes in the economy or in financial markets, often expressed in percentage changes from a base year or from the previous month. Indexes measure the ups and downs of stock, bond, and some commodities markets, in terms of market prices and weighting of companies in the index.
Indicative Equilibrium Price (IEP)	The equilibrium price between offered and demanded quantities, which is calculated by the ASE trading system.
Industrials	General term used in the financial markets to refer to companies manufacturing, producing, or distributing goods and services.
Investment Manager	A professional responsible for managing the investments of institutional and individual clients.
Inflation	An increase in the prices for goods and services in a particular country.
Initial Public Offering (IPO)	A corporation's first offering of stock to the public.
Initiate Coverage	Indication to cover short position by purchasing the underlying stock (this cancels out the short position).
Insider Information	Material information about a company that has not yet been made public. It is illegal for holders of this information to make trades based on it, however received.
Insider Trading	The practice of buying and selling a company's stock by that company's management or board of directors, or by a holder of more than 10% of the company's shares.
Insolvent	A person not able to pay his or her debts as they become due.
Institutional Investor	An institution that invests its own assets or the assets of other large institutions, such as foundations. The institutional investor category includes pension funds, investment companies, insurance companies, and banks.
Integrated Financial Market	A market in which there are no barriers to financial flows, and the same risk asset commands the same expected return, irrespective of domicile.
Interest	The cost of borrowing, represented as a percentage of the amount borrowed.
Intrinsic Value	A valuation determined by applying data inputs to a valuation model. The value is comparable to the prevailing market price.
Investment Fund	An established fund which pools funds from investors in order to purchase a wide variety of financial instruments that will meet the fund's investment goals.
Investor	The owner of an asset.
IOSCO (International Organization of Securities Commissions)	An international organization of securities exchange regulators who set guiding principles for the world's capital markets.
ISIN	International Securities Identification Number - A twelve-digit number used as an internationally recognized numbering system for securities identification.
ISO(The International Organization for Standardization)	a non-governmental organization established in 1947 to promote the development of standardization and related activities in the world with a view to facilitating the international exchange of goods and services, and to developing cooperation in the spheres of intellectual, scientific, technological and economic activity.
Issue	A particular financial asset.
Issuer	Corporation that originates securities in the primary market for the purpose of raising capital.

Hedging	The practice of offsetting the price risk in an existing security by the purchase or sale of a derivative security, such as an option or futures contract.
Hidden Quantity	The quantity which the broker does not wish to reveal on the Market by Order Book.
Holder	The purchaser of a call or a put option.
Holding Company	A corporation that owns the securities of another company, usually with voting control.
Horizontal Merger	A merger involving two or more firms in the same industry that are both at the same stage in the production cycle; that is, two or more competitors.
Hostile Takeover	A takeover of a company (usually made by an open tender offer to shareholders) against the wishes of the current management and the Board of Directors by an acquiring company or raider.
House Call	Notification by a brokerage house that a customer's margin account is below the minimum maintenance level. The client must provide more cash or equity, or the account will be liquidated.
Hung Up	Used to describe the position of an investor whose stocks or bonds have dropped in value below their original purchase price.
Hypothecation	Pledging of securities to brokers as collateral for loans made to purchase securities or to cover short sales.

Global Custodian	Custodian who offers international services through a network of sub-custodian (agent) banks.
Globalization of Financial Markets	Tendency toward a worldwide investment environment, and the integration of national capital markets.
Good - Till - Cancelled (GTC)	An order that remains valid until its cancellation.
Gross Domestic Product (GDP)	The market value of final goods and services produced over time including the income of foreign corporations and foreign residents working in the country, but excluding the income of the country residents and corporations overseas.
Gross National Product (GNP)	Total value of all goods and services produced in a given country, including the income accruing to domestic residents that result from investments abroad.
Group of Thirty (G-30)	An international economic consortium which studies world- wide economic situations and makes recommendations to benefit the world economy.
Guardian	An individual who, by legal appointment or by the effect of a written law, is given custody of a minor or an incompetent person and his or her ownership.

Face Value	The amount of money the issuing company or government promises to pay for a bond at maturity.
Fill-and-Kill	An order that requires execution of a possible quantity at the price limited in the order, and cancellation of the remaining un-executed quantity.
Fill-or-Kill	An order that requires execution of the entire quantity immediately. If this order cannot be executed, it is cancelled.
Final Settlement	The completion of a transaction when delivery of all components to a trade have been accomplished.
Financial Instrument	A mechanism for investment in the financial markets. There are two major types of financial instruments: a debt instrument, which is a loan guaranteed to pay back principal with interest, and an equity security, which represents part ownership in a company.
Financial Services Companies	The companies licensed by the JSC to perform the activities of investment trusteeship, investment management, financial consultations, brokerage or custodial activities.
Financial Statement	A report of basic accounting data that helps investors understand a firm's financial history and activities.
First Market	Part of the Secondary Market where trading takes place subject to special listing rules.
Fiscal Year	Any continuous 12-month period that a company or government uses as its annual accounting period.
Fixed Income Security	A security that pays a specific rate of interest. Bonds are fixed-interest securities.
Fixing Group	A group of securities traded at a limited price during the trading session, representing the last IEP upon opening.
Flotation	When a company's shares are admitted to trading on the ASE.
Forecasting	Making projections about future performance on the basis of historical and current conditions data.
Force Majeure	Events outside the control of the parties. These events are acts of man, nature, governments and regulators, or impersonal events. Contract performance is forgiven or extended by the period of force majeure.
Foreign Exchange Market	An over-the-counter market where buyers and sellers conduct foreign exchange business by telephone and other electronic means of communication.
Free Right of Exchange	An investor's right to transfer securities from one name to another name without paying charges that accompany a sales transaction.
Free Stock	Securities that are not subject to any ownership restrictions, such as lien, pledge or freezing.
Freezing	The prevention of any disposal of securities, by any means whatsoever, by virtue of the request of the securities’ owner.
Futures Contract	An agreement to buy or sell a specific security at a particular price on a stipulated future date.
Futures Exchange	A market exchange, physical or electronic, where buyers and sellers meet to trade futures and options on futures contracts.