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Glossary: C


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Call (covered warrant)

A covered warrant that gives the holder the right, but not the obligation, to buy the underlying at a future date and specified price.

 

Call (option)

It is an option that gives the buyer the right to buy an underlying asset at a future date at a specified price.

 

Call (warrant)

A call warrant allows the holder to benefit from a rising market. It rises in value when the underlying asset rises in value.

 

Capital appreciation

This occurs when the market value of the shares exceeds the purchase price.

 

Capital Employed

The value of the Assets invested and employed in the business. Total Assets – Total Current Liabilities.

 

Capital Gains Tax (CGT)

The tax an individual is liable to on realised capital gains which accrue in a year of assessment during any part of which the individual is resident in the UK.

 

Capitalisation issue

The issue by a company of new shares which do not require any paymnt to be made by the shareholder.  This has the effect of making the company's shares more marketable because of the increased number available and the lower market price.  A Capitalisation Issue is the same as a Bonus Issue and Scrip Issue.

 

Cash-settlement

The investor receives cash if the covered warrant can be exercised profitably at expiry. The gain achieved on the warrant is transferred to the holder without the holder having to enact a buy or sell trade.

 

CAUC

Closing Auction Execution followed by End of Order Book Trading

 

CCAL

Closing Auction Call

 

Certificate representing shares

An instrument which confers a contractual right (other than an option) to acquire shares otherwise than by subscription.

 

Change

The difference between the previous day's closing price and the most recent price of a security.

 

Chinese Wall

A ‘Chinese Wall’ separates two departments within an investment bank to ensure that conflicts of interest do not arise.

 

Churning

Is the unethical practice of buying and selling shares simply in order to earn more commission.

 

City Code on Takeovers and Mergers

The principles and rules governing takeovers and mergers of UK companies.

 

Class

Securities, the rights attaching to which are or will be identical and which form a single issue or series of issues.

 

CLOS

Closed

 

Close Period (CLOS)

The period during which the trading service remains closed.

 

Closed-end fund

These funds have a fixed number of shares, which are listed on the stock exchange. The market price of the shares is determined by demand and supply factors. Investment trusts are closed-end funds.

 

Closing 52 week high

The highest closing price for a specific security over the last 52 weeks.

 

Closing 52 week low

The lowest closing price for a specific security over the last 52 weeks.

 

Closing Price

The closing price is the last price for a tradable instrument at the time the market closes. For SETS, the closing trade price is the uncrossing trade price at which orders execute during an auction, or a Volume Weighted Average Price (VWAP).  For SEAQ, SEATS and AIM securities the closing price is the best bid, offer and mid price calculated from market maker quotes at the end of the mandatory quote period.
 

Code of Market Conduct

The standards that are to be observed in the UK markets. The Code is issued and enforced by the Finance Conduct Authority (FCA).

 

Combined code

The current benchmark for best practice corporate governance. The code is amended to the UKLA’s Listing Rules.

 

Committed Principal

A participant who registers to provide continuous two-way orders (buy and sell committed principal orders) for a particular security.

 

Consolidations

When a company reduces the number of shares it has in circulation by consolidating its share capital e.g. shareholders would receive 1, 50p share for every 2, 25p shares held.

 

Consols

Consols are British bonds that have no specified maturity date and pay a coupon forever.

 

Continuous Trading

The period of a trading day when orders are automatically matched and executed against one another.

 

Contra Trade

The trade was reported for a tansaction previously executed through the order book.

 

Conversion price

It is the price of the underlying shares at which the bond may be converted (see conversion ratio).

 

Conversion ratio - Convertible bond

It is the number of shares that a holder of a convertible bond receives at conversion. It is the ratio of the face value of the bond and the conversion price (see conversion price).

 

Conversion ratio - Covered warrant

This ratio is the number of warrants that must be held and exercised in order to buy or sell a single unit of the asset e.g. one share. A higher conversion ratio will produce a lower warrant price.

 

Convertible bond

These bonds can be converted into a specified number of shares of the issuing company at a pre-determined price.

 

Convertible preference shares

These can be converted into ordinary shares at a given price at a future date.

 

COREDEAL

An electronic exchange for international debt-related securities.

 

Corporate Actions

This includes a wide range of corporate actions, including takeovers, rights issues, demergers, scrip dividends and conversions to name but a few.

 

Corporate finance

Any financial activity that deals with a company and its money. These include raising capital and mergers and acquisitions.

 

Correction

This covers any corrections made to trade reports.

 

Counterparty

The participant with whom a trade is being transacted.

 

Coupon

This is a regular payment received by the bondholder over the lifetime of the bond. The coupon rate is expressed as a percentage of the face value of the bond.

 

Covered warrant

A security issued by a party other than the issuer or originator of the underlying asset, giving the holder the right (but not an obligation) to acquire a share or bond at a specific price and date.

 

Creating a false impression

The market abuse of deliberately creating false or misleading impressions regarding the supply, demand, price or value of an investment.

 

CREST

The paperless share settlement system through which trades executed on the Exchange's markets (and elsewhere) can be settled. CREST is operated by CRESTCo, and was introduced in 1996. See Settlement.

 

Criminal proceeds

Benefit from a criminal or illegal activity.

 

Cross

The transaction was effected as an agency cross or a riskless principle trade between two member firms at the same price and on the same terms.

 

Cumulative preference shares

These preference shares accumulate unpaid dividend, which is then paid out when the company next declares it.

 

Currency

"The currency that the security is traded in.

 

Currency Conversion

The trade was executed in one currency but converted for trade reporting.

 

Current Ratio

A measure of a company's liquidity, or its ability to pay its short-term debts. Calculated by dividing current assets by current liabilities. Total Current Assets divided by Total Current Liabilities.

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