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A

Alienation of income

Term generally used to describe the transfer of the right to receive income from a source while not necessarily transferring the ownership of that source to the same person.

An examination or an inspection of books of accounts by an auditor to make sure that all the departments are properly recording all the transactions.

Anchoring-and-Adjustment

The tendency to evaluate current decisions in the context of past events.

Agent/agency agreement

An agent is an independent person or legal entity which acts on behalf of another (the ‘principal’). In international transactions, generally refers to a sales representative

A method of calculating EMI in which the appropriation towards interest and principal is made at the end of the financial year.

AGMARK is a certification mark for agricultural produce, assuring that they conform to a grade standard notified by Directorate of Marketing & Inspection (DMI), Department

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B

Bank to bank payment

A transfer of funds (airmail or cable) between remitter and beneficiary via the banking system.

Large transactions of a particular stock sold as a unit.

Orders physically held by the floor broker in the trading pit.

They are the shares issued to capitalize on the reserves and surplus of the company without charging the shareholders. From the accounting perspective it involves a debit to t

A bullish view is a trend in the financial market that sees an upward trajectory in stock prices, foreseeing general gains.

A reversal pattern marked by a succession of at least three generally higher highs alternating with successively lower lows. Occurs after a notable price rise. The pattern is

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C

Describes the behavior of nonlinear systems. A subset of nonlinear dynamics analysis, chaos theory is a branch of mathematics focusing on irregular and complex behavior that h

The unwritten law that is based on custom, usage, and court decisions; different from statutory law, which consists of laws passed by legisla-tures.

Credit, withholding tax

Various kinds of income (such as dividends, interest, royalties) are taxed at source by requiring the payer to deduct tax and account for it to the tax authorities (abroad). T

Comparable uncontrolled price (cup) method

A transfer pricing method that compares the price for property or services transferred in a controlled transaction to the price charged for property or services transferred in

Closing market rate

The rate at which a position can be closed based on the market price at end of the day.

Corresponding adjustment

An adjustment to the tax liability of the associated enterprise in a second jurisdiction made by the tax administration of that jurisdiction, corresponding to a primary adjust

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D

Daily Margin Statement

The Daily Margin Statement provides information to investors and traders about the amount of available margin and how it is being used. It is usually password protected.

Direct charge method a

Method of charging directly for specific intra-group services on a clearly identified basis.

Deductible expense which reflects the decrease of a natural resource due to extraction of the resource.

Phrase used in connection with circumstances in which the full rigour of the tax law is not enforced because, in particular, of the small amount or minor breach which may be i

Dependent personal services

The OECD model tax treaty provides rules for the treatment of salaries, wages and other similar remuneration (i.e. employment income) under the heading "dependent personal ser

Relative variation of actual from expected losses.

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E

Endowment insurance pays the sum assured upon the death of the life insured during the policy term or on survival to the end of the policy term.

Exchange control (EC)

Government regulations covering the inflow and outflow of foreign exchange.

Equilibrium Market

A price region that represents a balance between demand and supply.

Exemption method

Tax credit or exemption is offered via a unilateral method. For example, if you have paid 35% tax in a foreign country, but as per the Indian tax bracket, you need to pay 25%,

It is a fee charged by the mutual fund houses when an investor partially/fully exits a scheme or redeems their units. One must note that this fee is charged only when an inves

ELSS-Equity Linked Savings Scheme

Mutual Fund Schemes that invest in equities and equity-related securities with a lock-in period of three years and provide tax benefits under Section 80 C of the IT act.

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F

Floor Trader (FT)

An individual who executes trades for the purchase or sale of any commodity futures or options contract on any contract market for such individual's own account.

Funds Available

A sum of money available for an investor/trader in his account to invest/trade. Includes withdrawable funds and sale credit (Sell proceeds- Margin for sale)

Fixed-period option

Payment of a death benefit in equal instalments over a specified time period.

Money paid for the transportation of goods. Freight insurance is a common coverage in marine insurance, purchased by the owners of transporting vessels.

Food and Agriculture Organisation

The placing of funds in overseas accounts in order to meet the bank’s daily requirements.

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G

Goods Till Triggered (GTT) Order

GTT orders are executed if the market price of the stock reaches the trigger price (predetermined limit price) before the expiry of the GTT order.

Gross receipts, whether in the form of cash or property, of the taxpayer received as compensation for independent personal services, and the gross receipts of the taxpayer der

These are the benchmark to measure the strength and weaknesses in the overall market.

Large grain elevator facility with the capacity to ship grain by rail and/or barge to domestic or foreign markets.

The term used to describe a security that is in proper form to transfer title, which means that the registered owner has endorsed it. To settle a sale, the certificate must be

Gold ETFs (Exchange Traded Funds) is an investment tool that is based on the domestic price of physical gold. 1 unit of this ETF equals 1 gram of 99.5% pure gold. Like other E

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H

Hacker insurance

A coverage that protects businesses engaged in electronic commerce from losses caused by hackers.

Historic Volatility

How much contract price has fluctuated over a period of time in the past; usually calculated by taking a standard deviation of price changes over a time period.

Halloween Strategy

An investment strategy in which investors sell their stocks before 01-May and don’t reinvest till 31-October to increase their profits is known as a Halloween Strategy.

The party who purchased an option. Initial Performance Bond The funds required when a futures position (or a short options on futures position) is opened. Sometimes referred t

Human life value

The sum of money that when paid in instalments of both principal and interest over the individual?s remaining working life, will produce the same income the person would have

High Net Worth Individuals (HNIs)

In India, individuals with an investible surplus of more than ₹ 2 crore are considered as HNIs.

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I

Increasing term insurance

Term life insurance in which the death benefit increases periodically over the policy's term, usually purchased as a cost of living rider to a whole life policy.

Identity theft insurance

Coverage for expenses incurred as the result of an identity theft. Can include costs for notarizing fraud affidavits and certified mail, lost income from time taken off from w

A fund that specializes in the purchase of securities that match or represent a specific index. For example, BSE 30 index is a fund that seeks to mimic the returns represented

International double taxation

See: Double taxation, domestic and international

Income tax Liability

It refers to the direct tax the policyholder has to pay against his income during a particular financial year under the Income Tax Act of 1962.

Issuing (or opening) bank

The buyer’s bank which establishes a documentary credit at the request of the buyer, in favour of the beneficiary (seller/exporter). It is also called the buyer’s bank or open

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J

The power, right, or authority to interpret and apply tax laws or decisions.

Joint and several liability

The legal doctrine that allows a plaintiff to collect in full from one negligent party in an accident where there are two or more negligent parties.

One or two or more agents jointly instructed by a principal to act on his behalf. In the case of estate agents this is normally on the basis that if any one of the agents effe

Members of a stock exchange who stand ready to buy and sell shares in which they specialize are called jobbers.

As the term suggests, the Joining Fee is what you pay when your application form for a card is accepted. It varies from bank to bank and on the type of card applied for. Typic

Jeopardy assessment

Tax assessment made where there is some danger of tax being lost.

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K

Karat is a unit to measure of the purity of a precious metal. For example, Pure gold is 24 karat.

Krugerrand is South African gold coin.

Kidnap/ransom insurance

Coverage up to specific limits for the cost of ransom or extortion payments and related expenses. Often bought by international corporations to cover employees. Most policies

Koala is Australian platinum coin casted in 1987.

An employee whose services would be difficult to replace if the employee were to die or become disabled.

Key person insurance

Insurance on the life or health of a key individual whose services are essential to the continuing success of a business and whose death or disability could cause the firm a s

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L

Locked positions

Locked positions are positions of equal size on the same account on the same instrument but in opposite directions (buying and selling).

Long-term care rider

An accelerated death benefit specifically for insured's long-term care needs.

Actions taken to reduce the fre-quency and/or severity of losses.

Long Hedge (Futures)

A long hedge is one where a long position is taken on a futures contract. A hedger uses when an asset is expected to be bought in the future. Alternatively, it can be used by

Liability insurance

Insurance for what the policy-holder is legally obligated to pay because of bodily injury or property damage caused to another person.

Lock-in indicates a freeze on the shares. SEBI (DIP) Guidelines have stipulated Lock-in requirements on shares of promoters mainly to ensure that the promoters, who control th

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M

A set minimum margin (per outstanding futures contract) that a customer must maintain in his margin account. Typically 75% of initial margin.

Also known as Systematic Risk, it refers to the risk that an investor can experience due to a change in stock market performance.

Misstatement-of-sex clause

If a person?s sex has been misrepresented, the insurer adjusts the amount of proceeds payable rather than cancelling the policy altogether.

The average profitability of a trader's account, as measured over a given period.

A merger is when two unique companies, come together and form a new company.

A strategy for selecting stocks using screening criteria that have been found to work in the past.

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N

A security issue that is newly added to the list of tradable security issues of an exchange. It is accompanied with a new listing date.

The bank that is stipulated in a documentary credit as authorised to pay or issue a deferred payment undertaking or accept drafts. A nominated Bank isnormally bound to pay und

A seller of an option contract who does not own a position in the underlying security.

Broadly speaking, a person who spends most of the calendar year outside his country of domicile. Non-residents are usually taxed on income derived from sources within the taxi

A negative act in insurance refers to intentional misrepresentation or fraudulent activities by the policyholder, leading to a violation of the terms and conditions of the ins

Auto insurance coverage that pays for each driver?s own injuries, regardless of who caused the accident. It also refers to an auto liability insurance system that restricts la

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O

A block of stock consisting of less than 100 shares. When odd lots trade, a premium is usually tacked on by the specialist or market maker. These receive the least favorable p

A technical analysis theory based on the assumption that the small investor is always wrong. Therefore, if odd lot sales are up – that is small investors are selling stock – i

Ontario Securities Commission

The government agency that administers the Securities Act (Ontario) and the Commodity Futures Act (Ontario) and regulates securities and listed futures contract transactions i

Open End Mutual Fund

Investors buy shares directly from fund, and sell shares directly to fund. Share price is Net Asset Value (NAV).

The person who sells an option in return for a premium and is obligated to perform when the holder exercises his right under the option contract. Also referred to as the write

Operating Income

Sales minus all expenses except income taxes and other items not related to basic business.

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P

Partly Paid Rights Issue

Partly Paid Rights Issue is when you are required to pay only a partial amount while applying for the Rights Issue.

The price at which the underlying currency can be bought or sold.

Privileged tax regime

Euphemism for the tax regime of a tax haven.

A push-out occurs during a stock split when new shares are forwarded to the registered holders of old share certificates, without the holders having to surrender the old share

Pre-tax profits

Profit after deducting depreciation, costs, etc., but before deducting taxes.

This is an abbreviation of a stock's price-to-earnings ratio. The price-to-earnings ratio is a stock's share price divided by earnings per share for the company's most recent

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Q

Qualified Retirement Plan Definition

A qualified retirement plan is one that is allowed certain tax advantages because it meets criteria spelled out in the Internal Revenue Code and in the Employee Retirement Inc

Qualified Retirement Plan

A Defined Benefit or Defined Contribution retirement plan that receives special tax treatment because it meets the requirements of the Internal Revenue Code.

The second currency in a currency pair, for which a client is able to sell/buy a base currency. For instance, in the currency pair USD/JPY, Japanese yen is the quote currency.

In the context of the foreign tax credit system, this term denotes the separate calculation of the foreign tax payable on all foreign income of a particular category which may

Information on the last trade, and current bid and asked prices. Most quotes are intentionally delayed about 20 minutes.

Also known as a rocket scientist, a quant is someone who is really good at math, computer science and the like and brings those skills to bear in the securities industry. The

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R

A person is said to be a resident alien of a country if he resides in that country but is a citizen of another country.

Real-Time Quotes

Stock trading price reports that have not been artificially delayed.

An individual charged with minimizing the adverse impact of losses on the achievement of a company?s goals.

A trading area bounded by horizontal, or near horizontal, lines. It can either be a reversal or continuation pattern, depending on the breakout.

The measure of an investor's ability to withstand volatility in the markets. Investors with a near-term focus are likely to be more conservative than those with a long-term vi

A rent representing the full, or nearly the full, letting value of a property on a given set of terms and conditions

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S

An option strategy in which an investor buys one call and two puts on the same underlying security with the same exercise price and expiration date.

When a credit card holder guarantees payment to the bank by providing it with his Savings deposit details to ensure payment of the outstanding balance, it is called a secured

A sharp move up in stock price forcing short sellers to liquidate their positions.

Same Store Sales

Sales at retail stores or restaurants open at least one year. A chain’s same store sales growth excludes gains due to increases in the number of stores. Same store sales growt

The price at which the futures contract underlying a call or put option can be purchased (if a call) or sold (if a put). Also referred to as exercise price.

SWIFT (Society for Worldwide Interbank Financial Telecommunications)

A computer network which is used to send instruction and payment statements.

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T

A type of life insurance where the sum assured is payable only in the event of death of the insurer during the specified term. In the case of survival, the contract expires an

Tertiary Beneficiary

In life insurance, a beneficiary designated as third in line to receive the proceeds or benefits if the primary and secondary beneficiaries do not survive the insured.

Term which refers to a tax adviser who assists the taxpayer in fulfilling his obligations under the legislation.

It is the difference between the price behaviour or benchmark of an index and the position of an investment portfolio.

The condition of an automobile or other property when damage is so extensive that repair costs would exceed the value of the vehicle or property.

A market that occurs when there are comparatively few bids to buy or offers to sell, or both. The phrase may apply to a single security or to the entire stock market. In a thi

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U

A stock is said to be on an uptick when the last trade occurred at a higher price than the one before it.

Tax on goods which are used within the taxing jurisdiction although the goods were purchased in another jurisdiction

Underlying security

The security subject to being purchased or sold upon exercise of the option contract.

Unplanned retention

The implicit assumption of risk by a firm or individual that does not recognize that a risk is acknowledge to exist but the maximum possible loss associated with it is signifi

Underlying Futures Contract

The specific futures contract that is bought or sold by exercising an option.

A comprehensive report of the government's financial statements, containing all expenditures and revenues -- actual numbers for the year going by (revised estimates) and forec

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V

A measure of market risk.

Volume is the daily number of shares of a security that are traded. Volume is one of the most important indicators we watch. Its relation with price movements tells us 90% of

A traditional Indian architecture and design system, which specifies the detailed methodology of designing buildings, buying land etc. in order to maximise benefits, from the

The price range on the CBOT Market Profile in which approximately 70% of the day's trades occur.

For a retirement savings plan participant, vesting refers to the gradual granting of ownership of contributions made by your employer.

A stock that trades at a lower price relative to its fundamentals, thus, making it appealing to value investors is known as a Value Stock.

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W

Premises designed and built for the purpose of bulk storage of raw materials or finished or partly finished goods, pending either onward transit or division into smaller batch

Working Capital

Working capital is a financial metric which is the difference between a company's current assets and current liabilities. It implies the availability of enough cash and cash e

Willing seller-willing buyer

An assumption sometimes made for valuation purposes that the owner of the property concerned is willing to dispose of his interest therein and that there is at least one genui

Withholding tax

Tax on income imposed at source, i.e. a third party is charged with the task of deducting the tax from certain kinds of payments and remitting that amount to the government. W

Whole Life Insurance

Life insurance that is kept in force for a person's whole life as along as the scheduled premiums are maintained and where benefits are payable to a beneficiary on death of th

Weather insurance

A type of business interruption insurance that compensates for financial losses caused by adverse weather conditions, such as constant rain on the day scheduled for a major ou

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X

A covered colonnade, as originally used for exercise by Greek athletes. Or a garden walk, usually bordered by trees.

A Nasdaq stock symbol specifying that it is a mutual fund.

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Y

A slang word used in the currency industry meaning "billion".

Yield to Maturity (YTM)

The rate of return the investor will earn if the bond is held to maturity.

The national currency of Japan. It was introduced in 1872 and remains one of the major reserve currencies in the world.

The return on debt securities with different maturities, for a level of default risk.

Yield interest rate

Yield refers to the actual rate of interest expressed as a rate per cent per annum relating to the net proceeds or outlay. The formulae for converting yields to discounts and

Give up possession, especially by the tenant at the end of a lease.

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Z

A defined area of land or part of a building which is allocated for a particular purpose, eg. development plans may allocate areas of land for different uses or values of prop

What shows on a credit card holder's bill when all outstanding dues are paid and no new purchases have been made during the billing cycle.

A statistical measure that quantifies the distance (measured in standard deviations) a data point is from the mean of a data set. In a more financial sense, Z-score is the out

In a bull market, an Elliott three-wave pattern that subdivides into a 5-3-5 pattern with the top of wave B noticeably lower than the start of wave A. In a bear market, this p

In planning terms, the dividing of an area by a local planning authority into zones for particular uses or activities.

Zero-coupon Bonds

The bonds that are issued at a discount price and redeemed at face value without any interest payment to the investors are called Zero-coupon bonds.

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