Investment glossary

• ADRs (American Depositary Receipts) US traded shares in British companies.
• Annual General Meeting (AGM) As the name implies it's the once-yearly shareholder meeting. It's the time investors - big and small - get to question the board and vote on pay and changes to the company's constitution.
• Alpha Objective measure of the stock price that filters out the effects of stock market fluctuations.
• AIM The Alternative Investment Market is the thriving junior stock market for smaller companies run by the LSE.
• Analysts Employed by investment banks and brokers to study companies and markets and make investment recommendations.
• Annual Report & Accounts Thick glossy booklet that contains the results, all the key financial stats and rundown of the company's performance over the year.
• Annuity A form of pension bought from an insurance company.
• Arbitrageur Person, or organisation that makes a profit from identifying where the market has got its pricing of currencies and stocks wrong.
• Audit Once yearly examination of the company's accounts.
• Audit Committee Independent wing of a company's board that signs off the company's accounts.
• Backwardation In the stock market it is a phenomena whereby the bid price is higher than the offer price.
• Balance Sheet Logs the company's assets and liabilities and can be used to help value the firm.
• Bank of England Sets interest rates, keeps inflation low, issues banknotes and maintains a stable financial system.
• Base Rate Interest rate set by the Bank of England.
• Bear  No, not the big fury variety. An investor, dealer, or bank that is negative on shares.
• Bear Raider An investor who sells shares. It's often stock he doesn't own (see short selling).
• Beta Measure of volatility of a share.
• Bid Price How much a market maker - a professional share dealer - will pay for your shares.
• Big Board New York Stock Exchange
• Book Value Very rough valuation of a company based on its assets and liabilities.
• Book Building The process of pricing a new share issue.
• Broker Stockbroker
• Blue Chip Usually used to refer to FTSE 100 firms, or large well-regarded private companies.
• Bull An investor who is positive, or 'bullish' on a share.
• Bull Market A steadily rising share market.
• Buyback Share repurchase designed to boost earnings per share and reward investors.
• Capital Gains Tax Paid on the profits of made from investments.
• Cash Flow Statement In any business cash is king. Look at the annual, or interim accounts and there will be a cash flow statement setting out the sources and uses of the company's hard earned spondooliks.
• CFD Contract for Difference (see our section on CFDs).
• Charts Graphs plotting share price and market movements used to determine what might happen in the future.
• Chief Executive Boss boss of a company
• Chapter 11 US system of bankruptcy protection. 
• Chinese Walls Imaginary barrier constructed to ensure information from part of investment bank doesn't permeate to another. For instance a bank's reputation would be ruined if its dealers got wind of a big takeover organised by its M&A team.
• Commercial Paper Form of short term IOU
• Commission The cash you hand over for share dealing services.
• Consideration The price paid for something.
• Contract Note Terms of your contract with a stock broker other intermediary.
• Corporate Governance Refers to the way a company is run. In the wake of disasters such as Enron and WorldCom, the market is keen to see companies have the right checks and balances in place to avoid wholesale fraud or abuse of office.
• Coupon Rate of interest paid on a security. 
• Cum Means including. Those good old public schoolboys that used to run the City dropped in the odd latin phrase just to confuse people. For instance cum dividend simply means the shares you buy entitle you to a dividend payment.
• Current Assets Cash and the like that can be liquidated in one year.
• Current Liabilities Debts that need to be paid in the next year.
• Debtors People who owe cash to a company.
• Derivatives Futures and options.
• Dividend Regular cash payout to investors made on a per share basis.
• Dividend cover An indication of a company's ability to pay a dividend.
• Dow Jones Industrial Average American Share Index. US equivalent of the Footsie.
• Earnings Per Share, or EPS This key financial ratio measures the company's profitability. Major component in the price earnings ratio, which is used to value a company on the stock market.
• EGM Extraordinary General Meeting. Called to vote on a major company issue. For instance to ratify a takeover, or perhaps to sack the board.
• Equity Another name for shares.
• Ex Means excluding. The opposite to cum. Therefore shares that are ex-dividend, come with no payout.
• Execution Only Stockbrokers Stockbroking lite. They offer a bare bones buy and sell facility, but don't give investment advice. Think e*trade, Barclays Stockbrokers, or Hargreaves Lansdown.
• Exit PE The price earnings ratio at which a company is sold.
• Face Value The nominal rather than real value of a share, or other security.
• Finance Director Head bean counter, chief company accountant.
• Financial Times Newspaper of record for the Square Mile. Referred to as the Pink'un.
• Firm/Firmer When a market is on the rise.
• Fixed Assets Fixtures, fittings, plant and machinery. In other words the physical assets of the company.
• Fixed investments Held for long term. Taken in conjunction with fixed assets, they provide the tangible asset backing for the company's liabilities and debt.
• FTSE 100, or Footsie Financial Times Stock Exchange index. FTSE 100 (top 100 companies), FTSE 250 (midcaps), FTSE All Share (whole market)
• Fundamental Analysis Way of spotting undervalued shares based on the company's fundamentals such as earnings, dividends and future prospects.
• Fund Manager Person Paid to invest cash for a pension fund, or insurer.
• Gearing Shows how heavily indebted a company is.
• Gilt-Edged Securities Government bonds or loan stocks. One of the safest forms of investment and hence the name gilt-edged.
• Grey Market Trading in new shares before they are actually issued.
• Growth Companies As the name suggests a firm that is expected to grow earnings quickly.
• Hedge Funds Investment vehicles that attempt make above-average returns. Often bet on currency markets or mergers and takeovers. They borrow heavily sometimes to double up their bets.
• Index FTSE, Dow Jones, Hang Seng Nikkei.
• Institutions Big City funds and insurers.
• Investment Bank American equivalent of a merchant bank. Issues and underwrites shares, buys and sells shares and bonds and other financial instruments.
• Interims Half year results.
• Investment Club Collective name for hobby investors.
• Investment Trust Investment fund that is quoted on the stock exchange.
• IPO Initial Public Offering of shares. Refers to a company floating on the stock market.
• LIBOR London Inter-bank Offered Rate is the rate at which banks borrow funds from each other.
• Limit Up/Down Continental European markets will suspend shares if the rise too high (go limit up), or fall too far (limit down).
• Liquidity Proportion of an investment fund held in cash.
• London Stock Exchange UK Share market.
• Long Holder of a particularly large line of stock, usually convinced the price will go up.
• M & A Mergers and acquisitions.
• Management Buy-outs/Buy-ins Buyout is where existing management raises finances to take the company private. Buy-in is where outside management buys the company and takes control
• Market capitalisation, Market Cap Stock market value of a firm.
• Market Maker Buys and sells shares.
• Merchant Bank Issues and underwrites shares, buys and sells shares and bonds and other financial instruments.
• Merger When two companies come together.
• Mid Price - The mid point between what a market maker will pay for a share (bid) and what he will sell shares for (known as the offer).
• Moody's Credit rating agency.
• Names Individual Members of the Lloyd's of London market who have unlimited liabilities (see Equitas).
• NASDAQ The US high-tech market.
• Net Asset Value (NAV) Value of a funds' investments or a property company's assets. Normally expressed on a per share basis.
• New York Stock Exchange America's leading bourse.
• Non-executive Director Independent members of the board.
• OFEX Unregulated share market for unlisted companies. Normally smaller, riskier investments.
• Offer Price Price at which you can buy shares.
• Ordinary Shares Most common form of equity, distinct from preference shares that carry different rights and rewards.
• Par Value Original, or nominal value of a share and bears no relation to the actual value of the share.
• PEG Investing ratio designed to uncover growth stock. Measures relationship between price earnings ratio and earnings growth.
• Penny Share Refers to small-cap shares of a very low price - but definitely not valued at a penny.
• PEP/Personal Equity Plans Tax shelter for private investors, with limits on how much can be ploughed in every year.
• Portfolio An investor, bank or fund manager's total holding of shares, bonds and other investments.
• Preference Shares Classed as debt, they carry a fixed dividend, but unlike ordinary shares, bring with them no voting rights.
• Preliminary Results Also referred to as final, or annual results, they are the unaudited annual figures for the company.
• Pre-tax Profit Main performance indicator for most companies.
• Proshare Advocate of investment clubs, it is backed by the government to promote private investment.
• Prospectus Official brochure issued by a company that wants to join the stock market.
• Provisions Funds set aside to meet future, sometimes unknown, liabilities.
• Relative Strength Share performance compared with a specified index.
• Rights Issue A means of raising more cash by issuing extra shares. Usually the new equity is offered at a discount to ensure investors subscribe.
• ROCE Stands for return on capital employed. Shows how well the directors are sweating the company's assets.
• Scrip Issue, or Bonus Issue New free shares, usually used to dilute the share price with no diminution in the value of the total investment.
• Securities Name for shares, prefs and bonds of a company.
• Shareholders' Funds Original value of the company's share capital plus the additional reserves since the company came to market.
• Short Selling more shares than you physically own in the belief the shares will fall and craftily buying the shares at a lower level to cover that short position.
• Spread Difference between the bid and offfer price.
• Stamp Duty Tax levied when you buys shares.
• Standard & Poor’s Credit rating agency.
• Subsidiary Company Where a larger company owns more than 50pc of a smaller company.
• Technical Analysis Focuses on the ups and downs of the share price and its relative performance, rather than the company's key performance indicators such as profits and EPS.
• Tipsheet The likes of T1PS and Red Hot Penny Shares carry out analysis of the lower reaches of the market and tip the commpanies/shares they believe will be winners.
• Tracker Funds Investment funds that simply track a stock market index.
• Turnover The sales of a company. May also be referred to as revenues.
• UK GAAP UK's General Accepted Accounting Practices.
• Unit Trust Investment fund in which you buy units, which are similar to shares.
• Warrant A tradable security providing the holder with the right to buy shares at a set price on a future date.
• Yield The annual dividend expressed in percentage terms.