| CAC 40 | |
| The index of 40 of the largest companies on the official list of the French Stock Exchange. | |
| Call | |
| A further instalment due on shares which are only partly paid. For example, there were two calls on British Telecom shares of 40p each | |
| Call Option | |
| An option giving the holder the right to buy an instrument for a particular price within a set time. It involves the right, but not the obligation, to buy a market at a specified price (the strike price) on a particular date in the future. | |
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| Callable | |
| Callable bonds give an investor the right to redemption at a set price on a set date. | |
| Call profit/loss | |
| for a long call, equal to the call value minus the premium. For a short call, equal to the premium minus the call value. | |
| Capital | |
| The money used to set up a business. Share capital is the money which is raised by selling ordinary and preference shares to shareholders. Loan capital is long-term borrowings. Authorised capital is the total amount in shares a company is empowered to issue. Paid-up capital is the amount of shares the company has sold to shareholders. | |
| Capital Gains Tax | |
| tax paid for profits made on an asset that has been held for a certain period of time. Spread Betting profits are free of CGT under current UK tax laws. Check here for a comprehensive explanation of our understanding of the tax rules regarding spread betting. | |
| Capitalisation issue | |
| See Bonus issue. Also known as scrip issue. | |
| Cash and Carry | |
| This is a forex strategy involving selling a low interest-rate currency and using the money to buy a currency that yields a higher rate. If for instance you sold a currency with a 2% interest rate and bought another with a 7% interest rate, you would gain 5% as long as the exchange rate between the currencies doesn't change. This strategy doesn't work in high volatility environments. | |
| Cash call | |
| a demand from a spread betting company for extra funds to cover a bet that is losing money. Also called margin call. | |
| Cash price | |
| current market price of the actual physical share or commodity. Also called 'spot price' in the currency market. | |
| Cash settlement | |
| Some deals such as Gilts and traded options are done for cash rather than for account settlement. These deals have to be settled the day following the deal. | |
| CD | |
| See 'Certificate of Deposit' above. | |
| Certificate of Deposit | |
| A 'CD' is a Certificate of Deposit (time deposit). You can get these at any bank. You'll have to deposit a decent amount, maybe a minimum of 1,000.00 for a certain amount of time, maybe 1, 2 or 5 years. In return, the bank will offer you BOTH your money back at the end of the time, and a guaranteed payment for letting them keep it (that's 'interest'). Because they know they can have your money for a whole year, they will give you more interest (but not much more) than a standard savings account. | |
| CHAPS | |
| Clearing House Automated Payment System. A system in the Uk to make cash payments in pounds. The receiver gets the fund on the same day. | |
| Chartist | |
| one which engages in technical analysis. | |
| Charts | |
| graphs that show the movement of a traded product. Chart patterns are used to make trading decisions. See technical analysis. | |
| Circuit Breakers | |
| When an exchange imposes the closure of trading after prices have fallen by a certain percentage - a move designed to restrict so-called panic selling. | |
| Closing price | |
| The price at which a product was traded to close an open position. See 'closing trade'. It may also refer to the price of the last transaction in a day's trading session. | |
| Closing trade | |
| a second bet of equal size to the initial bet, but in the opposite direction, and therefore taking a profit or loss. For example, a closing trade for a buy bet is a sell bet. Also called a closing bet. | |
| CME | |
| The Chicago Mercantile Exchange. | |
| Cocktail Swap | |
| A mixture of different kinds of swaps. Often used to spread risk on large deals. | |
| Collateral | |
| Assets pledged as margin in place of cash. | |
| Compensation fund | |
| A fund maintained by the Stock Exchange to make good any losses to the public if a stockbroker should fail. | |
| Commodities | |
| physical products, such as foods or metals, which are processed and resold. Investors usually buy or sell these products through futures contracts. | |
| Contingent orders | |
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A contingent order is used to manage risk on an already active position. A contingent (or 'if done') order is where a stop or limit order is placed and, 'if done,' a second order is automatically set against the new open position. In other words it is a mechanism by which first a stop or limit order is placed; then, if and only if the order is triggered, a second order is automatically set against the new position. Orders contingent on another event happening are a popular way of managing a position. A contingent order will be executed once certain conditions have been met on the traders position(s). One such contingent order would be if a trader were to place a stop loss on a trade in order to minimise their total exposure and exit a bet should it go against them. In the most common scenario, a limit or stop order is placed which will be executed if the market reaches a certain level. A contingent order is then placed against this first order when triggered. The second part of the order cannot be acted upon unless the first part has been executed. Example: The £/USD CFD quotes at 1.9550-1.9553. You set an order to sell 250,000 CFDs above the current market quote at 1.9600. If this order is filled and opens a position, you wish to work a stop order at 1.9700 and a limit order at 1.9500. |
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| Contract month | |
| the month in which futures or spread bets must be settled. In the commodities market it would be the month that a commodity would be satisfied by making or accepting delivery. Also called delivery month. | |
| Contract note | |
| A confirmation of the key details of a trade. | |
| Contract length | |
| The length of time a position is open for before it expires. | |
| Consolidation | |
| a price patterns characterized by extended sideways movement. It's a point in the stocks trading where there is no longer interest provided by the traders in pushing the stock, but investors believe there still could be gains in the longer term. | |
| Consumer Price Index | |
| The Consumer Price Index, used by the government as a measure of inflation. | |
| Contango | |
| A situation in which futures prices rise progressively as the maturity date moves further away from spot. The increase reflects the addedcost of storage and insurance for commodities. Contango isthe opposite of backwardation and is the normal relationship between spot and future prices. | |
| Contrary opinion | |
| the general theory that one can profit by doing the opposite of the majority of traders are bullish, it implies that most market participants who believe prices are going higher are already long, and hence the path of least resistance is down. | |
| Controlled risk bet | |
| a bet which has a strictly limited maximum loss. In other words a controlled risk bet is a bet where the maximum loss is predefined (i.e. a bet with a guaranteed stop loss) | |
| Contract size | |
| the smallest amount at which a futures or options product can be traded in. Also called a lot size. | |
| Contract month | |
| the month during which a bet expires, often quarterly for financial markets. | |
| Contracts for difference (CFDs) | |
| a taxable derivative where the bid-offer price is quoted is very similar to that of the underlying product. It is a type of margin trading because only a margin of 10% to 20% of the full cost of the trade is required at the outset. | |
| Controlled risk bet | |
| see guaranteed stop-loss | |
| Convertible stock | |
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A form of loan stock convertible into ordinary shares usually on a specified date, or
between specified dates. For example, a convertible loan stock 9% 2002 pays a regular 9% interest a year, but you have the choice to convert it into ordinary shares in the company at a specified rate of exchange (e.g. 2 ordinary shares for each £1 of loan stock) on say 1 June 2002. In some cases you are given a choice of dates and rates of exchange. For example, a convertible loan stock 2002/4 could offer you the choice of converting to ordinary shares on 1 June 2002 at 10 ordinary shares per £1 stock, or 1 June 2004
at 8 ordinary shares per £1 stock. It can be said that convertible stock offers a two-way bet because you continue to receive regular interest, but if the ordinary shares go up so will the price of the stock in accordance with the underlying value of the terms of the conversion. On the other hand, if the ordinary shares fall you can keep the convertible stock until its redemption date and continue to receive the regular interest payments. |
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| Corporate action | |
| an event that will change the capital structure of a company including a rights issue, scrip issue or special dividend. | |
| Contract note | |
| A written confirmation from the broker that a bargain (buying or selling) has been carried out. | |
| Convertible stock | |
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A form of loan stock convertible into ordinary shares usually on a specified date, or
between specified dates. For example, a convertible loan stock 9% 2002 pays a regular 9% interest a year, but you have the choice to convert it into ordinary shares in the company at a specified rate of exchange (e.g. 2 ordinary shares for each £1 of loan stock) on say 1 June 2002. In some cases you are given a choice of dates and rates of exchange. For example, a convertible loan stock 2002/4 could offer you the choice of converting to ordinary shares on 1 June 2002 at 10 ordinary shares per £1 stock, or 1 June 2004
at 8 ordinary shares per £1 stock. It can be said that convertible stock offers a two-way bet because you continue to receive regular interest, but if the ordinary shares go up so will the price of the stock in accordance with the underlying value of the terms of the conversion. On the other hand, if the ordinary shares fall you can keep the convertible stock until its redemption date and continue to receive the regular interest payments. |
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| Coupon | |
| Coupon is the amount of interest payable on a fixed interest stock. | |
| Cover | |
| To exit or buy back a short position. An off setting transition to limit liability. | |
| Close to the money | |
| an option contract for which the strike price is close to the current market price of the underlying security. | |
| Credit account | |
| This is an account with a spread betting providers where you do not have to put the full margin amount upfront as margin to open positions. You do, however, have to provide proof that you have the assets to cover any potential losses. In other words this is a type of account where the client does not need to deposit funds. However, proof that shows the client's assets are enough to cover margin and payments is required. The opposite of a deposit account. | |
| Credit limit | |
| This represents the maximum amount of losses you can incur in your account before a margin call is issued. In other words the total losses a client with a credit account can run on open bets before it is necessary to send in extra funds (or before a margin call). | |
| Credit Rating | |
| The assumed creditworthiness of a company or sovereign nation issuing debt securities and their ability to repay the investor. Credit ratings affect the ability of a government or company to secure financing from banks and also inform the price their securities might command on the open market. | |
| Cross corners | |
| In sports spreads this is the total number of corners gained by the home team in a football match multiplied by the total number of corners gained by the away team. | |
| Cum dividend | |
| Shares sold entitling the buyer to receive the next dividend. | |
| Cum rights | |
| A share bought together with the rights issue attached to it. | |
| Cum scrip | |
| A share bought together with the scrip issue attached to it. | |
| Currencies | |
| money in public circulation. | |
| Currency cross | |
| The exchange rate between two currencies. | |
| Cut and reverse | |
| closing an existing position and opening a new position through one trade. For example, you can buy 20 Dec Lloyds and sell 30 Dec Lloyds, resulting in a sell 10 Dec Lloyds. Also called overclosure | |
| Cyclical stocks | |
| Stocks that rise and fall quickly in line with economic growth. | |
