1. ACCOUNTS 14 day periods into which the stock exchange

trading calendar is divided.

2. ACCOUNTS DAY Sixth or seventh day following the expiry of an

accounts period on which settlement on all period deals must be completed.

3. BACKWARDATION Where stock cannot be delivered on settlement

date although it has been paid for, a third party is found who owns and will lend similar stock. As a security measure, this stock is paid for in full. When the original stock that could not be delivered on time is finally available, the lender will be given back his stock and will refund monies paid to him less backwardation which is a commission for the loan.

4. BONUS SHARES Additional shares issued to shareholders at no

additional cost to themselves as a form of extra dividend. Also known as scrip issue.

5. CALL-OVER Bargaining and closing deals in a stock

exchange without a formal floor and position dealings, where the secretary reads, calls out each security to be dealt, one at a time.

6. CARRY-OVER When a deal has been arranged but, for some

valid reason, either the buyer cannot pay on time, or the Jobber may not be able to deliver stock on time. In this case, a third party can be introduced to solve the problem.

7. CONTANGO Is interest charged a client by his broker to

cover the costs of borrowing money from a third party so as to pay for stock bought on his behalf. This happens when a client has commissioned his broker to purchase securities but for some reason, cannot pay on time.


8. CUM. AND EX. hese prefixes are written in front of other

words such as capital, rights and dividends to qualify them. “Cum” is short for cumulative, which means “inclusive of”. “Ex” on the other hand is short for excluding, which is the opposite of including.

In commerce these terms refer to rights of buyers and sellers of securities when these are sold before a dividend has been effected but after it has been declared. These terms are necessitated

by the fact that shares are bought and sold throughout the year, but companies only declare dividends after the end of their financial year when profits can be determined, and moreover, payment of dividends may take place long after they have been declared.

Thus “Ex Capital” infers that the seller of shares has sold them excluding their right to receive a bonus share issue which has been declared at the time of sale. “Cum Capital” then means he sells them inclusive of this right.

Ex Rights Cum Rights: The Term “Rights” refers to the decision by the directors to raise new share capital at current market rates but to give a prior option to existing shareholders to purchase a fixed number of shares at preferential rates below market values. Ex and Cum proceeding it refers to the sale of shares decision, but before the dividend.

Cum Dividend: These terms simply mean that the seller of shares retain his right to receiving the dividend on the shares he sells although the title to the shares has passed to the buyer reserve:

P.S. “Cum” anything shares give the buyer above par value because his purchase comes inclusive of the rights to collect on prior earnings. They are therefore sold at higher prices than “Ex” shares.

9. FLOOR Loose term referring to the trading area of a

stock exchange. This encompasses all the position dealings or “markets” of the exchange.

10. GILT-EDGED SECURITIES These are loan securities that are issued by Governments and because they are backed by the Governments “continuity”, they are considered perfectly safe, giving regular periodic interest payments, a fixed rate of interest, and guaranteed capital redemption at the expiry of the loan term eg Treasury bonds.


Similar securities issued by public corporations are called bonds, if they are issued by public companies they are called debentures.