Glossary of ‘Financial Terms’ starting with Alphabet ‘D’, i.e. ‘Meaning’ or ‘Definition’ of Common and Unusual terms relating to Accounting, Auditing, Company Law, GST, Income Tax, Investments, etc., along with the ‘Context’ in which they are used.
Trading of securities outside the stock exchanges. The broker instead of routing the trade of his clients in the system of stock exchanges, matches or executes the trades of its clients in a system provided by him outside the stock exchange.
The amount that has to be deposited at the Stock Exchange on a daily basis for the purchase or sale of a security. This amount is decided by the stock exchange.
A kind of fictitious trading, or wash selling, whereby a group of unscrupulous investors artificially inflate the price of a security so that they sell it at a profit. As a stock price rises due to increased volume, investors who didn’t do all their homework may be attracted to the stock in order to participate in the rising price. These investors are typically caught owning a stock that continues to depreciate long after the daisy chain sells out their positions for a profit.
Street on which The Stock Exchange, Mumbai is situated. Used synonymously for The Stock Exchange, Mumbai.
Dawn Raid (U.S.)
A situation in which a predator broker sweeps into the market the instant it opens and buys up a large block of shares before the others have chance to react.
An order that is placed for execution if possible, during only one trading session. If the order cannot be executed that day it is automatically cancelled.
A new breed of retail investor, found mostly in the United States who deals on the stock market via online brokers from dawn to dusk. A day trader undertakes many different buy and sell transactions during the day. Previously trading could only be carried out by stock broking professionals with access to expensive trading terminals. Day traders love the Internet–related dotcom stock and have been blamed for some of the volatility that these stocks have been prone to.
A firm that enters into transactions as a counterparty on both sides of the market in one or more products.
Bonds issued by a company bearing a fixed rate of interest usually payable half yearly on specific dates and principal amount repayable on a particular date on redemption of the debentures.
A trustee of a trust deed for securing any issue of debentures of a body corporate.
The most distant months of futures contract.
Deferred net settlement
A category of payments system in which banks continually send payment instructions over a period of time, with final transfer occurring at the end of the processing cycle. During the period, a record is kept of net debits and credits.
Defined Benefit Plan
A pension plan in which the sponsor agrees to make specified payments to qualifying employees. The pension obligations are effectively the debt obligation of the plan sponsor.
Defined Contribution Plan
A pension plan in which the sponsor is responsible only for making specified contributions into the plan on behalf of qualifying participants.
The exchange from which securities of a company are proposed to be delisted in accordance with SEBI Delisting Guidelines.
Delisting of securities
Permanent removal of securities of a listed company from a stock exchange. As a consequence of delisting, the securities of that company would no longer be traded at that stock exchange.
Presentation of securities with transfer deeds in fulfillment of a transaction.
Delivery Notice (U.S.)
The written notice given by the seller of his intention to make delivery against an open short futures position on a particular date.
An output given to each member of the Stock Exchange at the end of a settlement period containing particulars such as number of shares, value of shares, names of the receiving members etc. to enable him to deliver such shares in time.
The price fixed by the Stock Exchange at which deliveries on futures are invoiced. Also the price at which the future contract is settled when deliveries are made.
The process of transforming securities holdings in physical form to those in electronic form through a Depository Participant.
Process of transition from “mutually-owned” association to a company “owned by shareholders”. In other words, transformation of the legal structure from a mutual form to a business corporation form and privatisation of the corporations so constituted, is referred to as demutualization.
A system of organisation, which keeps records of securities, deposited by its depositors. The records may be physical or simply electronic records.
Depository participant (DP)
An agent of the depository through which it interfaces with the investor. A DP can offer depository services only after it gets proper registration from SEBI.
A fall in value of a security or security index or a currency in terms of others or its purchasing power.
Depth of Market
The number of shares of a security that can be bought or sold at the best bid or offer price.
The process of removing legal or quasi legal restriction on the type of business done or on the prices charged, within a particular industry. The aim of most deregulations is to increase competition by increasing the freedom of players in the industry.
Markets such as futures and option markets that are developed to satisfy specific needs arising in traditional markets. These markets provide the same basic functions as forward markets, but trading usually takes place on standardized contracts.
(1) A security derived from a debt instrument, share, loan whether secured or unsecured, risk instrument or contract for differences or any other form of security;
(2) A contract which derives its value from the prices, or index or prices, of underlying securities
The quotation of variable units of domestic currency in terms of fixed units of foreign currency.
A floating security whose value is not solely determined by free market supply and demand pressures but also by interventions of the concerned authorities.
A price for a bond which includes the amount of interest that has accrued on the bond since the date of the last interest payment.
Full and material information given by a company that may allow an investor to take an informed investment decision.
When a security is quoted at a price below its nominal or face value, it is said to be at a discount.
A situation where some intervention usually by government agencies for the purpose of controlling or regulating the growth of financial intermediaries lessens their advantage in the provision of financial services and drives financial transfers and businesses into other channels.
Return to investors of the accumulated income of a trust or mutual fund and distribution of capital gains.
A statement showing the pattern of holding of a security as on a given date.
The dates on which income is paid to unit holders as in a trust, or mutual fund.
The period over which the income of a unit trust or mutual fund is accumulated before its distribution to investors.
Spreading the risk by constructing a portfolio that contains many different investments whose returns are relatively uncorrelated. Thus, risk levels can be reduced without a corresponding reduction in returns.
Payment made to shareholders, usually once or twice a year out of a company’s profit after tax. Dividend payments do not distribute the entire net profit of a company, a part or substantial part of which is held back as reserves for the company’s expansion. Dividend is declared on the face value or par value of a share, and not on its market price.
Denotes the number of times equity earnings per share covers the equity dividend per share.
A requirement that companies notify the Stock Exchange immediately that the company intends to declare dividend so that it can set the ex dividend date.
A current liability showing the amount due to stock holders/shareholders for dividend declared but not paid.
Don’t Fight The Tape (U.S)
Colloquial expression meaning, “Don’t trade against the Market trend”.
Companies whose products or services are in some way dependent on the Internet and which have the suffix “.com” (dot.com) as part of their registered name.
An estimate of the amount of loss the holder of a security might suffer if there is a fall in its value.
In the securities market the offering of large amounts of stock without regard for the effect on prices on the market. In the international trade, the selling of goods overseas below cost to get rid of a surplus or to gain a competitive edge over the foreign firms.
An auction in which the auctioneer’s prices fall rather than rise. In such an auction, the first person to bid wins whatever it is that the auctioneer is selling. The system is used in the Dutch flower markets and also, occasionally, as a method of selling securities.