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Glossary of
Stock Market Terminology
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Indices
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In relation to a stock exchange, calculations made on an index number basis to indicate the
movements in the general level of prices of securities listed on that stock exchange. |
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Initial Public Offering (IPO)
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An initial public offering (IPO) occurs when a company first sells
common shares to investors in the public. Generally, the company offers primary shares this way,
although sometimes, secondary shares are also sold as IPOs. For a company to offer IPOs, they need
to hire a corporate lawyer as well as an investment banker to underwrite the offer. The actual sale
of the shares is generally offered by the stock exchange or by regulators. When the company starts
to offer IPOs, they are usually required to reveal financial information about the company so that
investors can make an informed decision. |
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Insider Trading/ Dealing
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Insider trading or dealing is the purchase or sale of a company's securities effected by or on
behalf of a person with knowledge of relevant but non-public material information regarding that
company. The insider is in a position to make massive gains by selling or buying securities before
information that might affect the price of the company's securities (price-sensitive information)
is made public.
Insider trading is an offence under the Companies Act 1965 and the Securities Industry Act
1983. |
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Instrument
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A tradeble asset or negotiable item such as a security, commodity,
derivative or index, or any item that underlies a derivative. An instrument is a means by which
something of value is transferred, held or accomplished. |
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Issued Share Capital
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The total number of shares issued by a company. |
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