The third part of our financial dictionary focuses on a few more terms which you will want to know the meaning of should you be considering entering the market.
When a market is subject to low liquidity and wide spreads and the trading is very light it is known as a narrow market. This small amount of activity often leads to large scale, unpredictable increasing and decreasing in prices.
One of the most important terms of all, as it is the basis of the whole market. The offer comes when a seller is willing to sell a at a certain price. If an offer is accepted then the agreement is bound by law.
This refers to a warrant’s intrinsic value. Also sometimes known as “moneyness.”
This is the bid or offer price of a security at any given time in a market though, it should be noted, it is not necessarily the same as the price at which the security will eventually be purchased.
When a trading range either falls or breaks and an upturn ensues in either the share or the market’s performance this is known as a rally.
When a bond is issued by a foreign borrower in Japan it is known as a Samurai Bond. Though it will come in Yen it can be purchased by a non-Japanese investor.
The assets owned by a company or individual which are physical – i.e. machinery, property, etc.
The umbrella fund refers to single fund which contains several sub-funds within it. Each of these funds invests in a different market or currency. The general use of this collective structure is to allow those who invest in it to move from one market to the next and one currency to the next with greater ease and security.