List of Glossary Terms
The PDSnet Glossary of Terms contains definitions and explanations for over 2600 financial market terms. These definitions are constantly kept up-to-date with current topical examples from the markets. They are also updated for changes in legislation and current events like COVID19 and the July 2021 civil unrest.
The terms in the Glossary are directly linked to all PDSnet articles, confidential reports, lecture modules and other material. This means that a client reading one of our publications can immediately see which terms are defined in the Glossary and click through to read the definition. Terms within the definitions in the glossary are similarly linked, which gives the Glossary an enormous educational depth share market investors.
| LABOUR |
In economic terms, a factor of poduction which involves people exchanging their labour for money. Entrepreneurs are regarded as a separate factor of production - "entrepreneurial ability". In... read more |
| LABOUR BROKER |
A person or organisation that specialises in placing short-term workers. The union movement is strongly opposed to the existence of labour brokers, because, obviously, they make it possible for... read more |
| LABOUR INTENSIVE |
A term used to describe those industries like the mining industry which traditionally have a large unskilled and semi-skilled work force. Such industries are often the subject of strikes and... read more |
| LABOUR MARKET |
An informal marketplace where people exchange their labour for wages, salaries and other benefits. The flexibility of the labour market is an important... read more |
| LABOUR RELATIONS |
A field of commercial activity which seeks to optimize the relationship between business and the labour force so as to ensure a minimum number of days work lost to strike action through contented... read more |
| LAG |
The number of data points that a filter, such as a moving average, follows or trails the input price data. So, for example, you can have a 65-day exponentially smoothed moving average which is... read more |
| LAGGING INDICATOR |
Certain economic indicators regularly lag behind the business cycle because of the nature of their business. For example, large construction contracts normally have a duration of three to five... read more |
| LAGGING MOVING AVERAGE |
This is a moving average which is calculated in exactly the same way as a simple moving average, but then it is shifted back several days (user definable) usually with the objective of avoiding... read more |
| LAISSEZ-FAIRE |
This is the policy of leaving things to run their own course, without any interference. In economics, this refers to the non-interference by the government, in the free-market. It is a French... read more |
| LAND BANK |
An agricultural bank owned by the South African government that specialises in providing loans for the purchase of land, agriculutral equipment and other farming needs. The Land Bank carries... read more |
| LAND REFORM |
Part of South Africa's constitution is to remedy the imbalances of the past and part of this process is to restore land claims to those who were dispossessed during the colonial and apartheid... read more |
| LAPSE RATE |
An insurance term which is a percentage of renewal notices for insurance policies that are not then renewed. A high level of lapses can indicate that consumer disposable income is reduced and... read more |
| LARGE MERGER |
A large merger is one where the combined turnovers of the two companies merging is more than R6,6bn or the turnover of the company that is being acquired is more than R190m. Such mergers must... read more |
| LAST DAY TO REGISTER |
The date by which you must be registered as a shareholder in order to participate in a corporate action such as the paying of a dividend or a rights issue. The last day to register is three days... read more |
| LAST DAY TO TRADE |
The last day to trade (LDT) in securities, which are subject to a corporate action (such as a rights issue or a dividend), in order to ensure settlement on record... read more |
| LAST IN FIRST OUT |
In accounting, a method of valuing closing stock which assumes that the most recently-purchased stock is the first stock to be used - which leaves the oldest and usually the less-expensive stock... read more |
| LAST TRANSACTION PRICE |
The price at which a certain share was last traded. This information is normally reported on the price page of your newspaper in a column headed "last". It is sometimes called the "closing" or... read more |
| LATEST QUARTERLY EARNINGS |
The percentage change from the latest earnings reported compared with the same quarter a year earlier. |
| LAZY BALANCE SHEET |
Occasionally, you will come across a listed company which is said to have a "lazy balance sheet" because they are carrying a lot of cash and cash equivalents - which could... read more |
| LEAD |
The number of data points that a filter, much as a moving average, precedes the input price data. |
| LEADING INDICATORS |
(1) These are indicators which tend to anticipate movements in other indicators. For example, the paper and packaging industry tends to start experiencing better conditions before the rest of... read more |
| LEADING MOVING AVERAGE |
The opposite of a lagging moving average, this is a moving average that has been advanced by a few days on the chart. Advancing a moving average in this way moves it away from the price chart... read more |
| LEADING SECTOR |
This is a sector which moves ahead of the business cycle. A good example is the packaging sector. As the economy turns and moves into an expansionary phase, manufacturers see that they need to... read more |
| LEAKAGE |
An economics term which refers to money which is taken out of the normal circular flow of money within the economy. Savings is a good example, but also imports result in funds leaving the economy.... read more |
| LEAPS |
Acronym for long-term equity anticipation securities, which are long-term listed options, with maturities that can be as long as two and a half years. |
| LEASE ADJUSTED NET LEVERAGE |
The ratio of a company's debt to its earnings before interest, taxation, depreciation and amortisation (EBITDA).... read more |
| LEAST DEVELOPED COUNTRIES |
A list of countries which have an annual gross national income per capita of less than $1025 for at least 3 years. In addition, they are countries with poor health, education, nutrition and literacy.... read more |
| LEDGER |
A "book" or more commonly today, a computer file into which transactions are entered from the journals. There are three types of ledger accounts - purchases, sales and general. Information from... read more |
| LEG |
One side of a spread. |
| LEG OUT |
In rolling forward in futures, a method that would result in liquidating a position. |
| LEGAL PERSONA |
This is a legal term that refers to the fact that, in addition to natural persons, companies are also considered by law to be persons independent of their owners or managers. Legal persona gives... read more |
| LETTER OF ALLOCATION |
A letter informing an applicant of how many shares he/she has been given in a share issue. Issue of shares, such as an initial public offer (IPO), are often over-subscribed which means that at... read more |
| LETTER OF ALLOTMENT |
A letter informing an applicant of how many shares he/she has been given in a share issue. Issue of shares, such as an initial public offer (IPO), are often over-subscribed which means that at... read more |
| LEVERAGE |
The relationship of a company's borrowings or debt to ordinary shareholders' funds. The American term for gearing is "leverage". A company... read more |
| LEVERAGED |
The relationship of a company's borrowings or debt to ordinary shareholders' funds. The American term for gearing is "leverage". A company... read more |
| LEVERAGED BUYOUT |
The acquisition of a company using a considerable amount of borrowed capital - often with the assets of company that is to be bought acting as collateral. Obviously leveraged buyouts can saddle... read more |
| LI DAVID |
A Chinese actuary and quatitative analyst who is best known for his application of gaussian copulas for securitised mortgage bonds leading to the "sub-prime" crisis of 2007/8. Li's formulae justified... read more |
| LIABILITY |
An accounting term, which records monies owed by the company to outsiders. The most common forms of liabilities are share capital and reserves (which are money "owed" to... read more |
| LIBOR |
The rate at which banks in the UK lend money to each other. This rate, usually known as "libor" is similar to the Johannesburg offer rate or "jibor" in South Africa. Banks frequently lend money... read more |
| LIEN |
A form of security or collateral for a loan - usually over movable property. A lien entitles the creditor to retain possession of the asset until the debt is paid. |
| LIFESTYLE TAX AUDIT |
The Receiver of Revenue sometimes undertakes a lifestyle audit of an individual who appears to be living beyond his taxed income and stated assets. The Income Tax Act allows for SARS to investigate... read more |
| LIFO |
In accounting, a method of valuing closing stock which assumes that the most recently-purchased stock is the first stock to be used - which leaves the oldest and usually the less-expensive stock... read more |
| LIKE-FOR-LIKE SALES |
The sales made by a retailer from the same stores which it owned in the previous financial period - as opposed to new store which have been opened in the current financial period. Same store... read more |
| LIMIT (UP OR DOWN) |
The maximum price advance or decline from the previous day's settlement price permitted during one trading session, as fixed by the rules of an exchange. The purpose of limit up or limit down... read more |
| LIMIT MOVE |
A change in price that exceeds the limits set by the exchange on which the contract is traded. |
| LIMIT ORDER |
Limit order types are orders that stipulate both a volume to be bought or sold and a limit price. Limit orders will always execute at the specified limit or better. With on-line trading, all... read more |
| LIMITED LIABILITY |
Corporate entities are juristic persons who have full legal persona. This means that they are responsible for their own debts separately from the people who own their shares. This is not true... read more |
| LINE CHART |
Technical Analysis, or charting as it is called, has three primary divisions - Formations, Line Charts and Wave and Cycle Theories. Line charts start with a simple chart of the closing price... read more |
| LINE INDICATOR |
This is a mathematical formula which is applied to a continuous stream of financial data with the objective of improving its predictability. Most line indicators have standard trading strategies... read more |
| LINEAR WEIGHTING |
The even weighting of a moving average so that older data has proportionately less impact than more recent data. In a standard moving average every price from the most recent to the oldest in... read more |
| LINKED INVESTMENT SERVICE PROVIDER |
This is a company which offers the investor a single platform from which he/she can invest in a broad range of collective investment schemes (CIS) such as unit trusts and insurance options. Linked... read more |
| LINKED UNIT |
A security which combines an equity share with a debt instrument. These securities were typically employed in property companies and still exist in some of them. The debt instrument offers a... read more |
| LIQUID |
A liquid share is one which typically trades more than R5 million but less than R500 million worth of shares every trading day. A good example of... read more |
| LIQUID ASSETS |
Assets that can be readily converted into cash. Normally, these are current assets such as debtors, stock and obviously cash or bank balances. The "liquidity" of an asset is the speed and ease... read more |
| LIQUID MARKET |
A security or commodity market with enough units outstanding to allow large transactions without a substantial change in price. |
| LIQUIDATE |
To settle the affairs of a company/firm by selling assets in order to pay creditors. When a company is liquidated, ordinary shareholders are entitled to receive their... read more |
| LIQUIDATING VALUE |
A money balance figure calculated by beginning with adjusted total equity, subtracting short option value, and adding long option value. This figure provides a critical snapshot of the financial... read more |
| LIQUIDATION |
The process whereby a company is dissolved. The court, the company itself, a shareholder, the Master of the court, the business rescue practitioner, a creditor, or the minister may initiate such... read more |
| LIQUIDITY |
The ability of a company (or person) to raise cash on short notice, usually with a view to meeting debts, unexpected expenses, or to take advantage... read more |
| LIQUIDITY COVERAGE RATIO |
This is a ratio used in the banking industry to ensure that a commercial bank has sufficient liquidity to meet its short-term cash outflows over the next 30 days. In general, banks aim to have... read more |
| LISP |
This is a company which offers the investor a single platform from which he/she can invest in a broad range of collective investment schemes (CIS) such as unit trusts and insurance options. Linked... read more |
| LISTED INVESTMENT |
An investment which can be traded on an organised exchange. The investment can be a debt instrument, equity or one of a number of other instruments. To have its securities listed on the JSE,... read more |
| LISTING |
A company which has obtained the right to have its shares traded on an organised exchange. The JSE has stringent requirements for companies... read more |
| LISTING DATE |
The date on which a company was listed on the JSE. Most listing are accompanied by an initial public offer (IPO) whereby the company raises capital from the public to fund its business. One of... read more |
| LISTING REQUIREMENTS |
For a company to list on the main board of the Johannesburg Stock Exchange it must have: " (1) a subscribed capital (including reserves but excluding minority interests, and revaluations of assets... read more |
| LISTINGS BOOM |
This describes a surge in companies lising on the JSE over a period of time. As a company executive, having your company listed on the JSE is attractive, as capital can be generated to grow the... read more |
| LIVE PRICES |
Share and other asset prices which are received directly from the JSE in the form of a "trickle feed". A feed of live prices is very expensive and can generally only be justified by institutional... read more |
| LIVING STANDARDS MEASUREMENT |
A categorisation of living standards in South Africa with 1 representing the poorest category of citizen and 10 representing the richest. The measure is based on a list of questions about how... read more |
| LJUNG-BOX STATISTIC |
A chi-square test of significance of higher order correlation existence. The marginal significance level is the probability that a no more higher order correlation exists. There are a large number... read more |
| LMIL |
An electronic information system operated by the London Stock Exchange (LSE) to provide information on LSE-listed companies to investors and the media. This system is similar to the Stock Exchange... read more |
| LOAD |
Commission and fees taken out of investment capital; that is, the situation in which a front-loaded mutual fund takes commission and fees out of investment capital before the money is put to... read more |
| LOAN LEVY |
A levy imposed on citizens to help finance government expenditure. Usually the levy is compulsory and repaid by the government when they have funds available, usually by a reduction in tax. In... read more |
| LOAN STOCK |
Shares in a company which are put up as collateral for a loan. In general, a bank will lend about 50% of the current market value of listed shares given to it as collateral. Unlisted shares would... read more |
| LOAN TO VALUE |
This is the amount of debt which a real estate investment trust (REIT) or property company has as a proportion of the value of the properties which it owns. In general... read more |
| LOAN-LOSS |
A provision for loans which cannot be collected by a financial institution. A bank's loan-loss is expensed off the income statement in the calculation of its profits and... read more |
| LOCAL COUNTER-PARTY TRANSACTION |
A transaction where a member firm trades as a principal with a person in South Africa, other than a member firm in South Africa. |
| LOCALISATION |
A policy of encouraging the purchase of locally produced products over imports. In the second half of 2021, the South African government issued a directive to all government departments... read more |
| LOCKED IN |
A special arrangement whereby certain shareholders are prevented from selling their shares for a defined period of time. This is typically a condition of an acquisition where the major shareholders... read more |
| LOCKED LIMIT |
A market that, if not restricted, would seek price equilibrium outside the limit but, instead, moves to the limit and ceases to trade. |
| LOG CHARTS |
Long-term standard charts, especially of indexes, have the disadvantage that the older data cannot be compared with the most recent data. For example, the 40% collapse of the JSE Overall index... read more |
| LOGARITHMIC CHART |
There are a number of ways to display the data on a chart. A linear chart is just like the charts that you used to draw at school with both the X and the... read more |
| LONDON GOLD MARKET FIXING |
The result of a twice-a-day dedicated conference between the 15 members of the London Gold Market Fixing Ltd. Previously this meeting was held at the premises of Nathan Meyer Rothchild &... read more |
| LONDON INTERBANK OFFERED RATE |
The rate at which banks in the UK lend money to each other. This rate, usually known as "libor" is similar to the Johannesburg offer rate or "jibor" in South Africa. Banks frequently lend money... read more |
| LONDON MARKET INFORMATION LINK |
An electronic information system operated by the London Stock Exchange (LSE) to provide information on LSE-listed companies to investors and the media. This system is similar to the Stock Exchange... read more |
| LONDON STOCK EXCHANGE |
The London Stock Exchange is one of the world's oldest stock exchanges and can trace its history back more than 300 years. Starting life in the coffee houses... read more |
| LONG |
Establishing ownership of the responsibilities of a buyer of a tradable; holding securities in anticipation of a price increase in that security. An investor who is "long of a stock" is a person... read more |
| LONG LEGGED DOJI |
A candlestick formation which comprises of a very small or non-existent body and very long upper and lower shadows. The body of the candle is exactly in between the two shadows.... read more |
| LONG NAME |
Companies which are listed on the JSE have three "names" - their long name, their short name and their code. Thus, for example, Pick 'n Pay Stores Limited is the company's long name. Its short... read more |
| LONG OPTION VALUE |
The current market value of all long options in a trading account. This amount of cash would flow into the account (less any commissions and fees) in the event that the options were offset (sold)... read more |
| LONG POSITION |
A holding of securities that benefits if the market goes up. A purchase of shares on the JSE is a long position - as opposed to a short or bear sale of the same the shares - which would be a... read more |
| LONG TERM TREND |
A trend which lasts for at least two years and usually much longer. The current upward trend on the S&P500 index has been in progress, with corrections, since March 2009 - over 11 years -... read more |
| LONG-TERM LIABILITY |
A debt, which is to be repaid over years rather than months. A good example of this would be debentures, which carry a fixed percentage return and are redeemable by the company at some future... read more |
| LOOKBACK INTERVAL |
The number of periods of historical data used for observation and calculation. For example, a 50-day moving average has a lookback interval of 50 trading days. |
| LOOP STRUCTURE |
An illegal structure where a person resident in South Africa for tax purposes owns a company or trust overseas which then, in turn, owns assets in South Africa. Certain loop structures can be... read more |
| LOOSELY HELD |
This expression refers to shares which are held by people who are not familiar with the inner workings of the company. They will sell their shares... read more |
| LOSS |
A loss occurs where a company's expenses exceed its incomes in a particular accounting period. The loss can be because of a once-off... read more |
| LOT |
A unit of trading. In the futures market, one lot refers to one futures or options contract. In the forex market, one lot is equivalent to 100,000 units of a particular foreign currency. Originally... read more |
| LOW |
The lowest point in a price pattern over a specific period. |
| LOW PASS FREQUENCY FILTER |
A data smoother or filter that lets pass low frequency trend sinusoids and rejects high frequency noise (see SMA). |
| LOW-TICKING |
To sell at the bid price. |
| LOWER SHADOW |
A candlestick charting term which refers to the extent to which a share's price trades below its open, in a green candle or... read more |
| LSE |
The London Stock Exchange is one of the world's oldest stock exchanges and can trace its history back more than 300 years. Starting life in the coffee houses... read more |
| LTV |
This is the amount of debt which a real estate investment trust (REIT) or property company has as a proportion of the value of the properties which it owns. In general... read more |
| LUX |
21 - 09 - 2020 Luxe (Previously called Taste Holdings) consists of two businesses - a food franchisor and a luxury goods retailer. It had master franchises in Southern Africa for Starbucks... read more |
| LUXE HOLDINGS LIMITED |
21 - 09 - 2020 Luxe (Previously called Taste Holdings) consists of two businesses - a food franchisor and a luxury goods retailer. It had master franchises in Southern Africa for Starbucks... read more |