Difference between trader broker and dealer in stock exchange


Changes in Stock List Any modification to the list of tradable issues of an exchange. Clearing Day Any business day on which the clearing corporation is open to effect trade clearing and settlement. Client Order An order from a retail customer of a Participating Organization.

Close Price The price of the last board lot trade executed at the close of trading. Closed-End Investment Fund An investment trust that issues a fixed number of securities that trade on a stock exchange or in the over-the-counter market.

Like other publicly traded securities, the market price of closed-end fund securities fluctuates and is determined by supply and demand in the marketplace. Closing Transaction An order to close out an existing open futures or options contract. Commission The fee charged by an investment advisor or broker for buying or selling securities as an agent on behalf of a client. Commodities Products used for commerce that are traded on a separate, authorized commodities exchange.

Commodities include agricultural products and natural resources such as timber, oil and metals. Commodities are the basis for futures contracts traded on these exchanges.

Common Shares or Common Stock Securities that represent part ownership in a company and generally carry voting privileges. Common shareholders may be paid dividends, but only after preferred shareholders are paid. Common shareholders are last in line after creditors, debt holders and preferred shareholders to claim any of a company's assets in the event of liquidation. Under UMIR rule Non-clearing firms may report through the firm that is responsible for their clearing.

Continuous Disclosure A company's ongoing obligation to inform the public of significant corporate events, both favourable and unfavourable. Convertible Security A security of an issuer for example - bonds, debentures, or preferred shares that may be converted into other securities of that issuer, in accordance with the terms of the conversion feature. The conversion usually occurs at the option of the holder of the securities, but it may occur at the option of the issuer. Corporation or Company A form of business organization created under provincial or federal laws that has a legal identity separate from its owners.

The shareholders are the corporation's owners and are liable for the debts of the corporation only up to the amount of their investment. This is known as limited liability. With some approved exceptions, crosses can only occur within the current bid and ask for the stock. Crossing Session After the close of the regular trading day, crosses can be executed between 4: ET at the last sale price of the stock.

Cum Dividend With dividend. The owner of shares purchased cum dividend is entitled to an upcoming already-declared dividend. The opposite of this is ex dividend. Cum Rights With rights. The owner of shares purchased cum rights is entitled to forthcoming, already-declared rights.

The opposite of this is ex rights. Cyclical Stock A stock of a company in an industry sector that is particularly sensitive to swings in economic conditions. Dd Daily Price Limit The maximum price advance or decline permitted for a futures contract in one trading session compared to the previous day's settlement price.

Day Order An order that is valid only for the day it is entered. If the order is still outstanding when the market closes, it will be purged overnight. Debenture A long-term debt instrument issued by corporations or governments that is backed only by the integrity of the borrower, not by collateral. A debenture is unsecured and subordinate to secured debt. A debenture is unsecured in that there are no liens or pledges on specific assets.

Debt Value The total dollar value of volume traded on one side of the transaction for a specified period. It equals price multiplied by volume divided by Debt Volume The number of debt instruments traded on one side of the transaction for a specified period multiplied by the face value of the debt instrument. Defensive Stock A stock purchased from a company that has maintained a record of stable earnings and continuous dividend payments through periods of economic downturn. Delayed Delivery Order A special term order in which there is a clear understanding between the buying and selling parties that the delivery of the securities will be delayed beyond the usual three-day settlement period to the date specified in the order.

Delist The removal of a security's listing on a stock exchange. This is done when the security no longer exists, the company is bankrupt, the public distribution of the security has dropped to an unacceptably low level, or the company has failed to comply with the terms of its listing agreement.

Delisted Issue The status of a security that is no longer listed on the Exchange. The security could trade on another market. A listed issuer is delisted when the last listed security of the issuer is delisted. Delivery The tender and receipt of the underlying commodity or the payment or receipt of cash in the settlement of an open futures contract.

Delivery Month The calendar month in which a futures contract may be satisfied by making or taking delivery. Delta A ratio that measures an option's price movement compared to the underlying interest's price movement. Delta values have a range of 0 to 1. Deep in-the-money options have deltas that approach 1. Demand The combined desire, ability and willingness on the part of consumers to buy goods or services. Demand is determined by income and by price, which are, in part, determined by supply.

Discretionary Account A securities account created when a client gives a partner, director or qualified portfolio manager of a Participating Organization specific written authorization to select securities and execute trades on the client's behalf.

Distribution The portion of the issuer's equity paid directly to the security holders. The issuer or its representative provides the amount, frequency monthly, quarterly, semi-annually, or annually , payable date, and record date.

Diversification Limiting investment risk by purchasing different types of securities from different companies representing different sectors of the economy. Dividend The portion of the issuer's equity paid directly to shareholders. It is generally paid on common or preferred shares. An issuer is under no legal obligation to pay either preferred or common dividends. Dividend Reinvestment Plan A means of reinvesting dividends, which would otherwise be paid to the shareholder in cash, in additional stock of the company.

Dividend Yield Equal to the indicated annual dividend rate per share divided by the security's price.

Dollar Cost Averaging Investing a fixed amount of dollars in a specific security at regular set intervals over a period of time. Dollar cost averaging results in a lower average cost per share, compared with purchasing a constant number of shares at set intervals.

The investor buys more shares when the price is low and buys fewer shares when the price is high. The DJIA is calculated by adding the prices of each of the 30 stocks and dividing by a divisor.

The DJIA is one of the most widely quoted stock market averages in the media. Downtick A trade is on a downtick when the last trade occurred at a price lower than the previous one. The trust receives royalty income from producing properties essentially, net cash flow and then sells interests in the trust called trust units to investors.

Conventional oil and gas royalty trusts are actively managed portfolios holding assets of mature producing properties. Substantially all of the cash flow generated by the oil and gas assets, net of certain deductions, such as administrative expenses and management fees, is passed on to the unit holders as royalty income. Capital expenses may also be deducted, but are usually subject to restrictions on the amount.

The distributions are highly dependent upon the cash flow generated by the trust. In general, the largest variable in determining the level of cash flow is the price of crude oil and natural gas.

Royalty trusts provide an alternative from owning the shares of individual companies for investors to participate in the oil and gas sector. Equities Common and preferred stocks, which represent a share in the ownership of a company. The value equals the number of securities multiplied by the offering price. The various forms of financial instruments may have an effect on determining the price or the number of securities.

Equity Option An option contract that grants the holder the right to buy or sell a specific number of shares of stock at a specified price during a specific period of time. Equity Value The total dollar value of volume traded on one side of the transaction for a specified period.

It equals price multiplied by volume. Equity Volume The total number of shares traded on one side of the transaction. Escrowed Securities The outstanding securities of an issuer that are not freely tradable, because they are subject to an escrow agreement that restricts the ability of certain security holders of that issuer from trading or otherwise dealing in those securities until certain conditions are satisfied.

European-Style Option Options that can be exercised only on their expiration date. Ex Dividend The holder of shares purchased ex dividend is not entitled to an upcoming already-declared dividend, but is entitled to future dividends. Ex Right The holder of shares purchased ex rights is not entitled to already-declared rights, but is entitled to future rights issues.

Exchange Offering Prospectus EOP A form of prospectus that allows a company to conduct a prospectus offering through the facilities of a stock exchange, rather than issuing them directly to the public. The company then applies to list the securities on the exchange. Exchangeable Security A security of an issuer that is exchangeable for securities of another issuer usually a subsidiary in accordance with the terms of the exchange feature.

The exchange may be at the option of the holder or at the option of the issuer of the securities. Exchange-Traded Fund ETF A special type of financial trust that allows an investor to buy an entire basket of stocks through a single security, which tracks and matches the returns of a stock market index. ETFs are considered to be a special type of index mutual fund, but they are listed on an exchange and trade like a stock. Also known as an index participation unit IPU.

The ex-d date is two clearing days before the record date. The exchange that the issue is listed on sets the ex-d date. Exempt Issuer A listed issuer that has satisfied listing requirements as outlined in Section of the Listing Requirements Manual.

An exempt issuer is not subject to special reporting rules. This status is generally reserved for senior listed issuers. Exercise The act of an option holder who chooses to take delivery calls or make delivery puts of the underlying interest against payment of the exercise price. Expiration Date The date at which an option contract expires. This means that the option can't be exercised after that date. Ff Face Value The cash denomination of the individual debt instrument.

It is the amount of money that the holder of a debt instrument receives back from the issuer on the debt instrument's maturity date. Face value is also referred to as par value or principal. Filing Statement A disclosure document submitted by a listed company to outline material changes in its affairs.

Filing statements are not used for the purposes of a financing. Floating Rate Security A security whose interest rate or dividend changes with specified market indicators. A floating rate is one that is based on an administered rate, such as a prime rate. It can be an initial public offering IPO , secondary offering, or private placement.

Freeze An interruption in trading on a stock, triggered when an order violates parameters set by TSX. Frequency Frequency refers to the given time period on an intraday, daily, weekly, monthly, quarterly or yearly perspective. Typically, choosing a weekly or monthly perspective when looking at several years of data makes it easier to identify long-term trends. Daily charts are useful for active traders and short-term time period charts.

The "Daily", "1-Minute", "5-Minute", "Minute" and "Hourly" frequency are used for intraday charts and the remaining choices are applicable to end-of-day charts. Front Month The closest month to expiration for a futures or option contract. GICS are used to classify the constituents of many indices worldwide. GICS is a four-level classification system. The four levels are: Good Delivery The term used to describe a security that is in proper form to transfer title, which means that the registered owner has endorsed it.

To settle a sale, the certificate must be surrendered on good delivery by the seller. A certificate that bears a share transfer restriction will not constitute good delivery. This type of order is also referred to as an open order. This is another kind of open order. Growth Stock The shares of companies that have enjoyed better-than-average growth over recent years and are expected to continue their climb. Guaranteed Investment Certificate GIC A deposit instrument most commonly available from trust companies or banks requiring a minimum investment at a predetermined rate of interest for a stated term, such as one or five years.

GICs are generally non-redeemable and non-transferable before maturity. Hh Halted Issue A temporary stoppage of trading of the listed securities of an issuer, which may be imposed by the Exchange, its agent Market Regulation Services Inc.

RS , or voluntarily requested by the issuer. Usually an issuer's listed securities are halted pending a public announcement of material information about the issuer, but the Exchange or RS may also impose a halt if the issuer is not in compliance with Exchange requirements or if the Exchange determines that it is in the public interest to do so.

Hedge A strategy used to limit investment loss by making a transaction that offsets an existing position. High Price The highest price at which a board lot trade on a security was executed during a trading session. Ii Improving the Market An order that either raises the bid price or lowers the offering price is said to be improving the market. The market improves because the spread between the bid and offer decreases. Income Deposit Security IDS An exchange-traded, fixed income-like instrument consisting of a subordinated debt security and a share of common stock packaged together to form a tax-efficient delivery mechanism to distribute an issuer's free cash flow to its investors.

Investors are paid dividends from the common share component and interest from the subordinated debt. The structure was created for U.

IDSs do not use the trust structure. Also known as income participating securities IPS. Income Stock A security with a solid record of dividend payments and which offers a dividend yield higher than the average common stock.

Income Trust Also called income funds. Income trusts are trusts structured to own debt and equity of an underlying entity, which carries on an active business, or has royalty revenues generated by the assets of an active business. By owning securities or assets of an underlying business, an income trust is structured to distribute cash flows, typically on a monthly basis, from those businesses to unit holders in a tax-efficient manner.

The trust structure is typically utilized by mature, stable, sustainable, cash-generating businesses that require a limited amount of maintenance capital expenditures. An income trust is an exchange-traded equity investment that is similar to a common share. There are four categories of income trusts: Index A statistical measure of the state of the stock market, based on the performance of stocks.

The ICCP is calculated without reference to volatility parameters. A key objective of broadcasting the ICCP is to provide market participants with an early indication of potentially large price movements at the close. Inflation An overall increase in prices for goods and services, usually measured by the percentage change in the Consumer Price Index. Inside Information Non-public information pertaining to the business affairs of a corporation that could affect the company's share price should the information be made public.

Insider All directors and senior officers of a company, and those who are presumed to have access to inside information concerning the company.

Insider Trading There are two types of insider trading. The first type occurs when insiders trade in the stock of their company. Insiders must report these transactions to the appropriate securities commissions. The other type of insider trading is when anyone trades securities based on material information that is not public knowledge. This type of insider trading is illegal. Intermarket Surveillance Group ISG An international committee comprised of members from 31 exchanges around the world, including every major stock exchange.

Membership in the ISG allows all members to share surveillance and investigative information to ensure that each regulator has access to the necessary information to effectively regulate its marketplace.

The ISG promotes effective market surveillance among international exchanges and RS involvement helps ensure they are continually in touch with other regulators and part of the development of international best practices. It consists of a two-character alphabetic country code specified in ISO , followed by a nine-character alphanumeric security identifier assigned by a national security numbering agency , and then an ISIN check-digit.

Intrinsic Value The difference between the current market value of the underlying interest and the strike price of an option. In-the-money is a term used when the intrinsic value is positive. Investment The purchase or ownership of a security in order to earn income, capital or both. Investments may also include artwork, antiques and real estate.

Investment Advisor A person employed by an investment dealer who provides investment advice to clients and executes trades on their behalf in securities and other investment products. Investment Capital Initial investment capital necessary for starting a business. Investment capital usually consists of inventory, equipment, pre-opening expenses and leaseholds. Investment Counsellor A specialist in the investment industry paid by fee to provide advice and research to investors with large accounts.

Investment Dealer Securities firms that employ investment advisors to work with retail and institutional clients. Investment dealers have underwriting, trading and research departments. The Association's role is to foster efficient capital markets by encouraging participation in the savings and investment process and by ensuring the integrity of the marketplace.

Investment Fund A closed-end fund that offers investors the ability to buy a security that represents a portfolio of investments with a specific investment strategy. These products use funds raised through a public offering to invest in a portfolio of securities, which are actively managed to create income streams for investors, typically through a combination of dividends, capital gains, interest payments, and in some cases, income from derivative investment strategies.

These funds are not directly related to an operating business. Investor Relations A corporate function, combining finance, marketing and communications, to provide investors with accurate information about a company's performance and prospects. It is the stated prospectus price multiplied by "the number of securities issued under the IPO plus the over allotment".

Issue Any of a company's securities or the act of distributing the securities. Issued shares refer to the portion of a company's shares that have been issued for sale. A company does not have to issue the total number of its authorized shares.

Issue Status The trading status of a class or series of an issuer's listed securities, such that a class or series of listed securities of an issuer may be halted, suspended, or delisted from trading. Issued and Outstanding Securities Commonly refers to the situation where the number of issued securities equals the number of outstanding securities. However, under certain corporate statutes in Canada, an issuer may have issued securities and then repurchased those securities without cancelling them.

In that case, the securities are issued but are not outstanding. As a result, the number of issued securities does not equal the number of outstanding securities. Issuer Status The trading status of a listed or formerly listed issuer. Issuer status types include: Jj Jitney Order The execution and clearing of orders by one member of a stock exchange for the account of another member.

For example, investment dealer A is a small firm whose volume of business is not sufficient to maintain a trader on the exchange.

Instead, investment dealer A gives its orders to investment dealer B, a larger organization which is a member of the exchange, for execution.

Investment dealer A pays a reduced percentage of the normal commission. Junior Corporation A young company in the early stages of operations and growth. If the MOC closing price acceptance parameters are exceeded, it equals the last board lot sale price of the security on the exchange in the regular trading session. For any other listed security, the last sale price equals the last board lot sale price of the security on the exchange, in the regular trading session.

Last Trading Day The last day on which a futures or option contract may be traded. Liabilities The debts and obligations of a company or an individual. Current liabilities are debts due and payable within one year. Long-term liabilities are those payable after one year. Liabilities are found on a company's balance sheet or an individual's net worth statement.

Limit Order An order to buy or sell stock at a specified price. The order can be executed only at the specified price or better. A limit order sets the maximum price the client is willing to pay as a buyer, and the minimum price they are willing to accept as a seller. Liquidating Order An order to close out an existing open futures or options contract.

A liquidating order involves the sale of a contract that has been purchased or purchase of a contract that has been sold. Liquidity This refers to how easily securities can be bought or sold in the market. A security is liquid when there are enough units outstanding for large transactions to occur without a substantial change in price. Liquidity is one of the most important characteristics of a good market. Liquidity also refers to how easily investors can convert their securities into cash and to a corporation's cash position, which is how much the value of the corporation's current assets exceeds current liabilities.

Listed Stock Shares of an issuer that are traded on a stock exchange. Issuers pay fees to the exchange to be listed and must abide by the rules and regulations set out by the exchange to maintain listing privileges. Listing Application The document that an issuer completes and submits to an exchange when it applies to list its shares on the exchange.

The issuer must disclose its activities, plans, management and finances in the application. Long A term that refers to ownership of securities. Low Price The lowest price at which a board lot trade was executed during a period of time.

Mm Margin Account A client account that uses credit from the investment dealer to buy a security. A client needs to deposit a margin amount with the balance advanced by the investment dealer against collateral such as investments. The investment dealer can make a margin call, which means the client must deposit more money or securities if the value of the account falls below a certain level. If the client does not meet the margin call, the dealer can sell the securities in the margin account at a possible loss to cover the balance owed.

The investment dealer also charges the client interest on the money borrowed to buy the securities. Market The place where buyers and sellers meet to exchange goods and services. It also represents the actual or potential demand for a product or service. Market Capitalization The number of issued and outstanding securities listed for trading for an individual issue multiplied by the board lot trading price.

Should a trading price not be available, a bid price, a price on another market, or if applicable, the price for an issue of the same issuer which the first issue is convertible into, may be used. Total market capitalization for a market is obtained by adding together all individual issue market capitalizations warrants and rights excluded. Escrowed shares are excluded from TSX Venture market capitalization. Market Maker A trader employed by a securities firm who is required to maintain reasonable liquidity in securities markets by making firm bids or offers for one or more designated securities up to a specified minimum guaranteed fill.

Market makers for the stock of issuers listed on Toronto Stock Exchange are referred to as Registered Traders. MOC accepts confidential market orders from before the open and throughout the trading session, maintaining them in time priority. Twenty minutes before the close of the trading session, MOC publicly broadcasts an imbalance of buy and sell MOC market orders and asks for limit MOC orders to offset the imbalance.

Ten minutes before the close of the trading session, MOC publicly broadcasts an Indicative Calculated Closing Price ICCP that provides market participants with an indication of what the calculated closing price would be assuming the regular trading session had ended at that time see Indicative Calculated Closing Price for more details.

At the close, MOC matches orders, from the MOC and continuous market books, at a calculated closing price which assures the most matches closest to the last sale price , and allocates the fills according to price and time priority.

Market Order An order to buy or sell stock immediately at the best current price. This information product shows the committed, tradable volume of the top 5 bids and asks for each Toronto Stock Exchange or TSX Venture Exchange-listed stock. Material Change A change in an issuer's affairs that could have a significant effect on the market value of its securities, such as a change in the nature of the business or control of the issuer. Under the principle of continuous disclosure, a listed issuer must issue a news release and report to the applicable self-regulatory organization as soon as a material change occurs.

Minimum Fill Order A special term order with a minimum fill condition will only begin to trade if its first fill has the required minimum number of shares. For example, an order to buy 5, shares with a minimum volume of 2, shares can only trade if 2, or more shares become available.

A Registered Trader will provide the stock should the book be below the required limit. To be eligible for MGF, an order has to be a tradable client order with a volume less than or equal to the MGF size, which varies from stock to stock.

Minimum Price Fluctuation The minimum price change or tick on a futures contract. Mixed Lot or Broken Lot An order with a volume that combines any number of board lots and an odd lot.

Money Market Part of the capital market established to buy and sell short-term financial obligations. These include federal government treasury bills, short-term Government of Canada bonds, commercial paper, bankers' acceptances and guaranteed investment certificates. Longer-term securities are also traded in the money market when their term shortens to three years. It is intended to reduce costly duplication of disclosure requirements and other filings when issuers from one country register securities offerings in the other.

Under the rules, eligible cross-border offerings are governed by the disclosure requirements of the issuer's home country. These orders are guaranteed a complete fill at the opening price to offset expiring options. They must be ordered between 4: Mutual Fund A fund managed by an expert who invests in stocks, bonds, options, money market instruments or other securities. Mutual fund units can be purchased through brokers or, in some cases, directly from the mutual fund company.

Nn Naked Writer A seller of an option contract who does not own a position in the underlying security. Net Change The difference between the previous day's closing price and the last traded price.

Net Worth The difference between a company's or individual's total assets and its total liabilities. Also known as shareholders' equity for a company. New Issue A stock or bond issue sold by a company for the first time. Proceeds may be used to retire the company's outstanding securities, or be used for a new plant, equipment or additional working capital.

New debt issues are also offered by governments. New Issuer Listing Occurs concurrently with the posting of the new issuer's securities for trading. The preconditions for listing include the acceptance by the Exchange that all listing requirements and conditions have been satisfied. The effective listing date is the date when the listed securities open for trading.

These applications in themselves provide prospectus-level disclosure; however, often the listing application is accompanied by an offering document or a prospectus. The issuer's security would be delisted from TSX Venture Exchange and listed on TSX at the same time, permitting continuous listing of the securities on contiguous exchanges.

The offering is often made in conjunction with an issuer's initial application for listing on an exchange. A plan of arrangement is a form of corporate reorganization that must be approved by a court and by the corporation's shareholders or others affected by the proposed arrangement, all as prescribed by corporate legislation.

A plan of arrangement can take various forms, including:. New Issuer Listing - Spin-Off A reorganization that usually results in a newly listed issuer acquiring a business division or assets as its principal operating asset from another issuer the reorganized issuer , with security holders of the reorganized issuer holding securities in both issuers, following completion of the reorganization. The issuer's security would be delisted from TSX and listed on TSX Venture Exchange at the same time, permitting continuous listing of the securities on contiguous exchanges.

New Listing A security issue that is newly added to the list of tradable security issues of an exchange. It is accompanied with a new listing date.

They are identified with an extension of "H" added to their stock symbol. Non-Certificated Issues An issue that is recorded on the transfer agent's electronic book rather than being held as a physical note.

Non-Client Order An order from a Participating Organization or an order a firm is executing on behalf of an institution, such as a mutual fund. An "N" denotes a non-client order in the book. Non-Exempt Issuer A listed issuer that is subject to special reporting rules. Non-Net Order A special-term order when there is a clear understanding between the buying and selling parties that they will settle the trade directly with each other. Non-Resident Order A special term order when one or more participants in the trade is not a Canadian resident.

Oo Odd Lot A number of shares that are less than a board lot, which is the regular trading unit decided upon by the particular stock exchange. An odd lot is also an amount that is less than the par value of one trading unit on the over-the-counter market. For example, if a board lot is shares, an odd lot would be 99 or fewer shares.

One-Sided Market A market that has only buy orders or only sell orders booked for a particular security. An on-stop order becomes a limit order once a trade at the trigger price has occurred.

Ontario Securities Commission The government agency that administers the Securities Act Ontario and the Commodity Futures Act Ontario and regulates securities and listed futures contract transactions in Ontario. Open Order An order that remains in the system for more than a day.

Open-End Investment Fund An investment fund that continuously offers its securities to investors and stands ready to redeem its securities at all times. Examples of an open-end fund are traditional mutual funds and exchange-traded funds ETFs. Members are free to choose their service provider. Instruments overview Get the full picture out what instruments you can list Bonds All debt securities including green or RMB bonds Euro MTF Contact us.

Corporate governance LuxSE's ten principles that aim at ensuring the highest market standards through transparency, business ethics and controls.

Home Trading Brokers and dealers Our trading members have access to roughly 36, securities denominated in more than 50 currencies. Getting access to LuxSE markets is easy. I want to become a trading member Read more. I am already a member of Euronext markets Read more. Appendix to Trading Manual. In such circumstances, a Minimum Activity Charge as described above MAC will be calculated on a prorata temporis basis and according to the number of trades, for that trading member.