Glossary

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ADSM: Abu Dhabi Securities Market, the UAE capital's bourse.

ARBITRAGE: An attempt to profit from momentary price differences that can develop when a commodity or security is traded on two different exchanges.

ASK: The price at which someone who owns a security offers to sell it, also known as the asked price.

BACK OFFICE: The support operations of a brokerage, insurance company, etc. "Back office problems usually refers to slow paperwork, payments and other such intangible glitches. You will rarely get to speak with back office personnel- perhaps not such a bad thing.

BASEL II: Wikipedia defines Basel II best ... "a round of deliberations by central bankers from around the world, under the auspices of the Basel Committee on Banking Supervision (BCBS) in Basel, Switzerland, aimed at producing uniformity in the way banks and banking regulators approach risk management across national borders': Also called The New Accord - the correct full name is the International Convergence of Capital Measurement and Capital Standards - A Revised Framework.

BEAR: Not a soft toy, but a person who thinks a market will soon be in decline. The opposite of Bull.

BID/OFFER: Bid is the price a buyer is willing or has to buy at, while offer or asked is the price the seller will take. The difference, known as the spread, is the broker's share of the transaction. The spread is often a surprise to customers who didn't read the sales literature and want to liquidate their holdings - how much?

BOOK VALUE: Generally speaking, this is the net asset value of a company (NAV).The NAV is arrived at by subtracting liabilities from assets. Dividing the result by the number of common stock shares gives you the book per share value that can be used as a relative gauge of the stock's 'real value’.

BOURSE: French term for stock exchange. It is now used more generally for all stock exchanges, in particular European exchanges.

BROKERS: In most financial markets, brokers (middlemen or women) an professionals who buy and sell shares on behalf of their clients. Private individuals and institutions are usually not allowed to deal in shares directly. In the Gulf, financial advisers are often called brokers because they sell on behalf of financial product providers.

BULL: Not someone who doesn't give the truth, but someone who thinks the market is going to go up. You get the idea.

CALL: The right to buy a security at a given price within a given time. Calls are bought by investors who expect the price of the stock to rise.

CLOSE: The final transaction price for an issue on the stock exchange at the end of the trading day.

CMA: The Capital Markets Authority, the Sultanate of Oman's regulator.

COMMODITY: A physical substance, such as food, grains or metals, which is interchangeable with another product of the same type and which rights and responsibilities are shared between the various corporate investors buy or sell, usually through futures contracts. The price of the commodity is subject to supply and demand. Risk is actually the reason exchange trading of the basic agricultural products began. For example, a farmer risks the cost of producing a product ready for market at sometime in the future because he doesn't know what the selling price will be. More generally, a product that trades on a commodity exchange; this would also include foreign currencies, financial instruments and indexes.

DERIVATIVE: A financial instrument whose value depends on changes in the value of some other security. Derivatives range from simple puts and calls to highly exotic and structured derivatives. Exotic and structured derivatives are thought of as the 'bogey-man' of the financial world.

DFM: Dubai Financial Market, the place to buy listed securities in Dubai.

DFSA: Dubai Financial Services Authority is an independent, integrated regulatory authority responsible for the regulation of all financial and ancillary services conducted in or from the Dubai International Financial Centre, including asset management, banking, securities trading, Islamic finance, re-insurance and an international financial exchange. The DFSA has been created using principle-based primary legislation modeled closely on that used in London and New York, and the DFSA regulatory regime operates to standards that meet or exceed those applying in the world's major financial centres.

DGCX: Dubai Gold and Commodities Exchange. A fully automated, online commodities exchange, DGCX is the first international commodities derivatives marketplace in the time zone between Europe and the Far East.

DIFC: Dubai International Financial Centre is an onshore hub for global finance. It bridges the time gap between the financial centres of Hong Kong and London and services a region with the largest untapped emerging market for financial services. DIFC is intended to turn Dubai into a hub for institutional finance and a regional gateway for capital and investment into the Middle East.

DME: Dubai Mercantile Exchange. The region's first energy futures exchange, trading Middle East based energy futures contracts with physical or financial settlement. A joint venture between the New York Mercantile Exchange (NYMEX) and a subsidiary of Dubai Holding. DME is due to launch officially in June 2007.

DMCC: Dubai Multi Commodities Centre was created in 2002 to establish a regulated commodity marketplace in Dubai. Rated 'A’ by Standard & Poor's, it provides the market infrastructure that brings together a wide range of commodities activities, serving the needs of participants in the gold, diamonds, energy and commodities markets.

EQUITIES: These are freely traded stocks and shares in publicly owned companies that do not carry a fixed rate of interest. Instead, they entitle their holders to a share in the growth of the company through an annual dividend payment.

EX-DIVIDEND: The period between the declaration of a dividend by a company or a mutual fund and the actual payment of a dividend.

FACE VALUE: The redemption value of a bond appearing on the face of the certificate. Also sometimes referred to as the par value or the principal value.

FUTURES CONTRACT : This is the standardized stock exchange contract committing the person to buy or sell a specific commodity ( share or index) as the representative of a basket of shares on a specified future date. As clear as mud, eh?

GOING PUBLIC: A private company is "going public" when it first offers its share to the investing public. (SEE IPO).

HEDGE : Any combination of a long and/or short position taken in securities options or commodities, in which one position tends to reduce the risk of others.

INDEX: A composite measure of the movement of the overall market or of a particular industry that consists of a large number of stocks and is usually weighed by other factors, such as capitalization.

INITIAL PUBLIC OFFERING (IPO) : The first time that a company issues or sells its stock to the public, sometimes known as "going public”.

LEVERAGE : The purchase (or sale) of a large amount of a security using a small amount of an investor's money. The rest of the money is borrowed from the brokerage firm.

LONG POSITION : Phrase denoting ownership of a security, which includes the right to transfer ownership and to participate in the rise and fall of its market value.

MARK-TO-MARKET : When an investment or a liability is revalued to the current market price.

MARKET ORDER: An order to buy or sell a stock at the market's current best displayed price.

MARKET ORDER: An order to buy or sell stock immediately at the best available market price. No price is specified by a customer placing this order.

MARKET CAPITALISATION: Price per share of a stock multiplied by the total number of shares outstanding; also the market's total valuation of a public company.

OFFER PRICE: A synonym for asked price.

OPTION: A contract wherein one party (the option writer) grants another party (buyer) the right to demand that the writer perform a certain act.

OVER-THE-COUNTER (OTC) MARKET: A decentralised, negotiated market in which many dealers in diverse locations execute trader far customers over an electronic trading system or telephone line.

SCRIP :  Document evidencing the fractional share of a stock distributed by a company because of stock, split or spin-off. The owner can then buy the remaining fraction to make a full share.

SECURITIES : A fancy name for shares of stock bonds or any kind of financial asset that can be traded.

SECURITY : A transferable instrument evidencing ownership or creditorship. Example: A note, stock or bond, evidence of debt, interest or participation in a profit-sharing agreement, investment contract, voting trust certificate, fractional undivided interest in oil, gas other mineral rights, or any warrant to subscribe to or purchase any of the foregoing or other similar instruments.

SETTLEMENT (DELIVERY) DATE : The day on which certificates involved in transaction are due at the purchaser’s office.

SHORT SELLING - 1: A technique used to take advantage of an anticipated decline in the price of a stock or other security by reversing the usual order of buying and selling.

STOP LOSS ORDER : A customer's order to set the sell price of a stock below the market price, thus locking in profits or preventing further losses.

TAKE A POSITION : (1) To hold stocks or bonds, in either a long or short position.(2) To purchase securities as a long-term investment.

TICKER SYMBOL: A shorthand acronym-style abbreviation for a company's name, used by stock-quote reporting services and brokerages.

TREND: Movement, up or down, in a security’s market price, or in the market itself, for a period of six months or more.

VOLATILITY : The relative amount or percentage by which a stork's price rises and falls during a period of time.

VOLUME : Number of bonds or shares traded during specific periods such as daily, weekly or monthly.

WRITE : The process of selling an option. The writer is the investor who sells the option.