Share Trading Account Australia

Share Trading Accounts Australia

If you’re new to the world of share trading, you might not know the lingo in the industry. If that’s you, here’s a glossary of the common terms used in the trading world. Print it, memorise it, however you like - it’s here for your reference.

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All Ordinaries (Or, All Ords)

The all ordinaries index is a listing of weight share prices of about five hundred of the biggest companies in Australia. Established in January of 1980 by the Australian Securities Exchange at five hundred points, it’s the major measure of performance of the sharemarket in Australia. The companies are weighted by size using terms of their market capitalization (or the total value of all of their shares.)

Australian Securities Exchange Code/ASX Code

This is the unique code given to the companies listed by the ASX.

Bear Market

This the term used to describe a time when the prices of shares in general are declining.

Blue Chip

These are prized shares in large companies which are known for being able to turn profits, regardless of a good or bad market, and are considered reduced risk.

Brokerage

This is the fee you will pay to a stockbroking firm when they buy or sell shares on your behalf.

Bull Market

This is the term used to describe the market during a time when share prices are generally on the rise.

Clearing House Electronic Subregister System

This is the system which will perform the settling of share trades, and provides the electronic subregists for the shares which are listed by ASX companies.

Conditional Order

This term describes the instruction to monitor a certain stock or share on your part and, should it reach a target price set by you, buy or sell the share/stock for you automatically.

Contract Note

This is a document which confirms the transaction, either between a pair of dealers or a client and broker and will include the cost, quantity and type of share which is traded.

Delayed Price

This is the price, delayed typically by 10 or 15 minutes which is not actually the current price of the share.

Delisted

This is used when a company has been removed from the Official Listings of the exchange and the shares will no longer be quoted.

Derivative

A derivative is the financial instrument which derives value from an underlying instrument. These include share price indices, shares, commodities, fixed interest securities, foreign currencies and more. Some forms of derivative are warrants, futures and exchange-traded options, among others.

Dividend

The dividend is the distribution of profits from a company to its shareholders. This is generally a number of cents for each share.

Dynamic Data

Online trading systems offer this service, allowing the user to view their live market info without the need to refresh your browser.

Float

This is the term used to describe the initial raising of funds through public subscription to a security or securities. An example is the first time that shares are offered through the share market.

Fundamental Analysis

This is the overall examination of a companies financial standing, the sector of industry as well as the current economy.

Futures

These are contracts to either sell or by a certain asset, or its equivalent in cash, at a specified date in the future.

Holder Identification Number (HIN)

This will identify a particular person as the owner of a security or securities, and you should keep this number stored in a secure manner.

Limit Order

This is a special instruction from a client to a broker to either buy or sell securities at a previously decided price or better.

Listed Company

A company that has agreed that they will follow the Australian Securities Exchange Listing Rules and has shares which are bought and sold through the ASX.

Live Price

This is the price at the exact moment in time of a share.

Market Depth

This is a snapshot of the supply and demand, or how liquid a certain share is.

Market Order

This is an order from the client to a broker to either sell or buy a certain share at the current market price immediately.

Option

This is the contract between to different parties which hands the buyer/taker the right (not an obligation) to either buy or sell an asset at a specific price on and/or before a specified date.

Short Selling

This is generally seen as a major contributing factor to the market volatility during the current financial crisis. This practice is when one sells a financial instrument which they do not own, intending to buy it later at a much lower price.

Securityholder Reference Numbers (SRN)

These numbers are used to identify an issuer sponsored holding, and they all begin with an “I”.

Straight Through Processing (STP)

This is a very efficient way to process a transaction electronically. This includes several stages including settlement, trading and clearing.

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