Payment for transactions on the due date as distinct from carry forward (Badla) from one settlement period to the next.

Dates fixed in advance by the exchange for the first and last business days of each clearance. The intervening period is called settlement period.

Each Exchange maintains a clearing house to act as the central agency for effecting delivery and settlement of contracts between all members. The days on which members pay or receive the amounts due to them are called pay-in or pay-out days respectively.

A situation where by an individual or a group acquires such control on a security that it cannot be obtained or delivered for performance of existing contracts except at exorbitant prices. In such situations, the Governing Board may intervene to regulate or even prohibit further dealings in that security.

Temporary reversal of trend in share prices. This could be a reaction (a decrease following a consistent rise in prices) or a rally (an increase following a consistent fall in prices).

Reckless heavy short-sales leading to unduly depressed prices. In such a situation, the Governing Board may prohibit short sales, fix minimum prices below which sells or purchases are not permitted and limit further dealings only to closing out of existing contracts.

Means "with". A cum price includes the right to any recently declared dividend (CD) or right share (CR) or bonus share (CB).

Closing Price

The trade price of a security at the end of a trading day. Based on the closing price of the security, the base price at the beginning of the next trading day is calculated.

When a trading member enters an order, any other trading member with an order on the opposite side is referred to as the counterparty.

Trading where the settlement of trades is postponed on the stock exchange until a future settlement period involving payment of interest on the account. It refers to the trading in which the settlement is postponed to the next account period on payment of contango charges (known as ‘vyaj badla’) in which the buyer pays interest on borrowed funds or the backwardation charges (a.k.a ‘unda badla’) in which the short seller pays a charge for borrowing securities.

Clearing refers to the process by which mutual indebtedness among members is settled. The clearing corporation matches the final buyers and sellers through multilateral netting. The members of the clearing corporation also known as clearing members settle their dues with the clearing house that is operated by the clearing corporation. The clearing corporation is the legal counter-party to both legs of every trade.

An investor sends the certificate along with the transfer deed to the company for transfer. In certain cases the registration is rejected if the shares are fake, forged or stolen or if there is a signature difference etc;. In such cases the company returns the shares along with a letter which is termed as a company objection.

Call Option
This is the right, but not the obligation, to purchase shares at a specified price at a specified date in the future. See Options.For this privilege, the buyer pays a premium which would be a fraction of the price of the underlying security. You are gambling that the share price will rise above the option price. If this happens you can buy the shares and sell them immediately for a profit.If the share price does not rise above your option price, you do not exercise the option and it expires - all you have lost is the initial payment made to purchase the option.

Call
The demand by a company or any other issuer of shares for payment. It may be the demand for full payment on the due date, such as, for example, with a rights issue. It may, alternatively, be the demand for a further payment when the total amount is payable by instalments.The calls are usually made several months apart by call letter and the shares are said to be paid-up when the final call has been paid. A call by a company should not be confused with a call option.

Capital Adequacy
The test of a securities business's ability to meet its financial obligation.Capital adequacy rules mean that a bank/financial institution has to have enough money to conduct its business

Capitalization
The total value of the company in the stockmarket.This value is arrived at by multiplying the number of shares in issue by the company's share price. This market capitalization obviously fluctuates as the share price moves up and down.It's an important figure - if your company is worth £2 billion, you'll have more credibility with bankers and other companies you want to take over than if you're a little minnow with hardly any value.

Capitalization Issue
Money from a company's reserves is converted into issued capital, which is then distributed to shareholders in place of a cash dividend. This is also known as a Scrip Issue.

Call Risk
The risk that bonds will be redeemed (or "called") before maturity. This possibility increases during periods of falling interest rates.

Capital Appreciation
An increase in the value of an investment, measured by the increase in a fund unit's value from the time of purchase to the time of redemption.

Capital Gain
The amount by which an investment's selling price exceeds its purchase price.

Capital Market
A market where debt or equity securities are traded.

Commercial Paper
Debt instruments issued by corporations to meet their short-term financing needs. Such instruments are unsecured and have maturities ranging from 15 to 365 days.

Commission
A fee charged by a broker or distributor for his/her service in facilitating a transaction.

Coupon
Interest rate on a debt security that the issuer promises to pay to the holder until maturity. Usually expressed as a percentage of the face value

Consideration
Consideration is the total purchase or sale amount associated with a transaction. The amount you 'pay' or 'receive'. It may also be the basis for working out the commission, taxes and any other charges you are asked to pay.

Contract
On any securities market this is the agreement between a buyer and a seller buy or sell securities. The written agreement between the seller and the buyer to transfer ownership of the property from the former to the latter.It is a legally binding agreement for sale.In two identical parts, one signed by seller and one by purchaser. When the two parts are exchanged (exchange of contracts) both parties are committed to the transaction.

Convertible
Any security is described as convertible when it carries the right or option for the holder to at some stage convert it in for another form of security at a fixed price. Convertibles are often bonds or loan stock (but sometimes preference shares) which carry the right to be converted into ordinary shares at some date in the future at a previously specified price.

Corporate Bonds
A corporate bond is an IOU issued by a public company, such as HLL,ITC, TELCO etc. When you invest in a corporate bond, you are lending money to the company. In return you will receive interest at a fixed rate and the promise that your capital will be repaid at a certain date in the future. The guarantee that our capital will be returned is only as good as the company you are lending money to. While HLL, ITC, TELCO are considered 'good risks' by investment pundits because they are blue chip companies, other smaller companies are likely to be a less good risk.

Correction
A correction is a term to describe a downward movement in share prices. In other words, a shake out or even a crash or mini-cash. Stockbrokers and fund managers like the term correction, perhaps because
they believe if they use the term crash or 'heavy fall', it'll cause panic. Whatever you decide to call a downward jolt in share prices, if you lose money, it may be described as a correction, but you'll feel pretty sick all the same!

Clearing refers to the process by which all transactions between members is settled through multilateral netting.

The share is described as cum-bonus when a potential purchaser is entitled to receive the current bonus.

The share is described as cum-rights when a potential purchaser is entitled to receive the current rights.

The amount to be paid by operators to the stock exchange to carry over their transactions from one settlement period to another.

Payment for transactions on the due date as distinct from carry-forward (badla) from one settlement period to the next

Capital loss
The negative difference between the selling price of the stock and purchase price of the stock.

Cash markets
The markets where securities (assets) have to be delivered immediately.

Capital Asset Pricing Model (CAPM)

A model describing the relationship between risk and expected return, and serves as a model for the pricing of risky securities. CAPM says that the expected return of a security or a portfolio equals the rate on a risk-free security plus a risk premium. If this expected return does not meet or beat required return then the investment should not be undertaken.

Circuit breaker
When a stock price increases or decreases by a certain percentage in a single day it hits the circuit breaker. Once the stock hits the circuit breaker, trading in the stock above (or below) that price is not allowed for that particular day.

Custodial fees
The fees charged by the custodian for keeping the securities.

Cumulative preference share
Preference shares whose dividends will get accumulated, if the issuer does not make timely dividend payments.

Convertible preference shares
Preference shares that can be converted into equity shares at the option of the holder.

Commercial Paper (CP)

CPs are negotiable, short-term, unsecured, promissory notes with fixed maturities, issued by well rated companies generally sold on discount basis.

It is the risk that the other party to a contract may not fulfill the terms of a contract.