Agent
A securities firm is classified as an agent when it acts on behalf of its clients as buyer or seller of a security. The agent does not own the security at any time during the transaction. 
All-or-None Order
An order that must be filled completely or the trade will not take place. 
Annual Report
A publication, including financial statements and a report on operations, issued by a company to its shareholders at the company’s fiscal year-end. 
Arbitrage
The simultaneous purchase of a security on one stock market and the sale of the same security on another stock market at prices which yield a profit.
Ask or Offer
The lowest price at which someone is willing to sell the security. When combined with the bid price information, it forms the basis of a stock quote.
Ask Size
The aggregate size in board lots of the most recent ask to sell a particular security.
Assets
Everything a company or person owns, including money, securities, equipment and real estate. Assets include everything that is owed to the company or person. Assets are listed on a company’s balance sheet or an individual’s net worth statement. 
Averages and Indices
Statistical tools that measure the state of the stock market or the economy, based on the performance of stocks, bonds or other components. Examples on the BSE are the Domestic Company Index (DCI) and the Foreign Company Index (FCI), amongst others.
Averaging Down
Buying more of a security at a price that is lower than the price paid for the initial investment. The aim of averaging down is to reduce the average cost per unit of the investment.

Basis Point
One-hundredth of a percentage point. For example, the difference between 5.25% and 5.50% is 25 basis points. 
Bear Market
A market in which stock prices are falling. 
Bid
The highest price a buyer is willing to pay for a stock. When combined with the ask price information, it forms the basis of a stock quote.
Bid Size
The aggregate size in board lots of the most recent bid to buy a particular security.
Blue Chip Stocks
Stocks of leading and nationally known companies that offer a record of continuous dividend payments and other strong investment qualities. 
Bonds
Promissory notes issued by a corporation or government to its lenders, usually with a specified amount of interest for a specified length of time. 
Book
An electronic record of all pending buy and sell orders for a particular stock. 
Booked Orders
Orders that do not trade immediately upon entry. These orders are also known as outstanding orders. 
Broker or Brokerage Firm
A securities firm or a registered investment advisor affiliated with a firm. Brokers are the link between investors and the stock market. When acting as a broker for the purchase or sale of listed stock, the investment advisor does not own the securities but acts as an agent for the buyer and seller and charges a commission for these services.
Bull Market
A market in which stock prices are rising. 
Business Day
Any day from Monday to Friday, excluding statutory holidays
Buy-In
If a broker fails to deliver securities sold to another broker on the settlement date, the receiving broker may buy the securities at the current market price of the stock and charge the delivering broker the cost difference of such a purchase.

Call Option
An option which gives the holder the right, but not the obligation, to buy a fixed amount of a certain stock at a specified price within a specified time. Calls are purchased by investors who expect a price increase. 
Central Securities Depository Botswana (CSDB)
Central Securities Depository Botswana. (CSDB) is the BSE’s securities depository, clearing and settlement unit. CSD is accountable for the safe custody and movement of securities, accurate record keeping, the processing of post-trade transactions, and the collection and distribution of entitlements relating to the securities that have been deposited by participants.
Capital
To an economist, capital means machinery, factories and inventory required to produce other products. To investors, capital means their cash plus the financial assets they have invested in securities, their home and other fixed assets.
Capital Gain or Loss
Profit or loss resulting from the sale of certain assets classified under the federal income tax legislation as capital assets. This includes stocks and other investments such as investment property.
Capital Stock
All shares representing ownership of a company, including preferred and common shares.
Capitalization Change
Any change in the issued and outstanding listed securities of an issuer. This change may involve the issuance, repurchase, or cancellation of listed securities or listed securities that are issuable upon conversion or exchange of other securities of an issuer.
Capitalization or Capital Structure
Total dollar amount of all money invested in a company, such as debt, preferred and common stock, contributed surplus and retained earnings of a company.
Cash
A special term attached to an equity order that requires the trade to be settled either the same day or the following business day for cash. 
Cash Dividend / Distribution
A dividend/distribution that is paid in cash.
Certificate
The physical document that shows ownership of a bond, stock or other security.
Changes in Stock List
Any modification to the list of tradable issues of an exchange. These modifications include: new listings, supplemental security listings, substitutional listings, deletions, name changes, and stock symbol changes.
Clearing Day
Any business day on which the clearing corporation is open to effect trade clearing and settlement. 
Client Order
An order from a retail customer of a Participating Organization. 
Close Price
The price of the last board lot trade executed at the close of trading. See also: Board Lot.
Closed-End Investment Fund
An investment trust that issues a fixed number of securities that trade on a stock exchange or in the over-the-counter market. Assets of a closed-end fund are professionally managed in accordance with the fund’s investment objective and policies and may be invested in a wide range of financial instruments/assets. Like other publicly traded securities, the market price of closed-end fund securities fluctuates and is determined by supply and demand in the marketplace.
Commission
The fee charged by an investment advisor or broker for buying or selling securities as an agent on behalf of a client.
Commodities
Products used for commerce that are traded on a separate, authorized commodities exchange. Commodities include agricultural products and natural resources such as timber, oil and metals. Commodities are the basis for futures contracts traded on these exchanges.
Common Shares or Common Stock
Securities that represent part ownership in a company and generally carry voting privileges. Common shareholders may be paid dividends, but only after preferred shareholders are paid. Common shareholders are last in line after creditors, debt holders and preferred shareholders to claim any of a company’s assets in the event of liquidation.
Continuous Disclosure
A company’s ongoing obligation to inform the public of significant corporate events, both favourable and unfavourable. 
Corporation or Company
A form of business organization created under provincial or federal laws that has a legal identity separate from its owners. The shareholders are the corporation’s owners and are liable for the debts of the corporation only up to the amount of their investment. This is known as limited liability.
Cyclical Stock
A stock of a company in an industry sector that is particularly sensitive to swings in economic conditions. 

Daily Price Limit
The maximum price advance or decline permitted for a futures contract in one trading session compared to the previous day’s settlement price. 
Defensive Stock
A stock purchased from a company that has maintained a record of stable earnings and continuous dividend payments through periods of economic downturn. 
Delist
The removal of a security’s listing on a stock exchange. This is done when the security no longer exists, the company is bankrupt, the public distribution of the security has dropped to an unacceptably low level, or the company has failed to comply with the terms of its listing agreement.
Delisted Issuer
An issuer whose securities are no longer listed on the BSE. A listed issuer is delisted when the last listed security of the issuer is delisted. 
Delivery
The tender and receipt of the underlying commodity or the payment or receipt of cash in the settlement of the contract. 
Demand
The combined desire, ability and willingness on the part of consumers to buy goods or services. Demand is determined by income and by price, which are, in part, determined by supply.
Diversification
Limiting investment risk by purchasing different types of securities from different companies representing different sectors of the economy. 
Dividend
The portion of the issuer’s equity paid directly to shareholders. It is generally paid on common or preferred shares. The issuer or its representative provides the amount, frequency (monthly, quarterly, semi-annually, or annually), payable date, and record date. The exchange that the issue is listed on sets the ex-dividend/distribution (ex-d) date for entitlement. An issuer is under no legal obligation to pay either preferred or common dividends. 
Dividend Yield
Equal to the indicated annual dividend rate per share divided by the security’s price. For example, if the indicated dividend rate is P1.00 and the closing price is P50.00, P1 divided by P50.00 equals 2%.
Dividend Payable Date
The date set by the issuer on which the dividend will be paid.

Equities
Common and preferred stocks, which represent a share in the ownership of a company.
Equity Price
The price per share traded.
Equity Value
The total value of volume traded on one side of the transaction for a specified period. It equals price multiplied by volume.
Equity Volume
The total number of shares traded on one side of the transaction. 
Exchange-Traded Fund (ETF)
A special type of financial instrument that allows an investor to buy an entire basket of stocks through a single security, which tracks and matches the returns of a stock market index. ETFs are considered to be a special type of index mutual fund, but they are listed on an exchange and trade like a stock. The BSE New Gold ETF, NEWPLAT ETF and NEWFUNDS ETF.
Expiration Date
The date at which an option contract expires. This means that the option can’t be exercised after that date.

Face Value
The cash denomination of the individual debt instrument. It is the amount of money that the holder of a debt instrument receives back from the issuer on the debt instrument’s maturity date. Face value is also referred to as par value or principal.

Growth Stock
The shares of companies that have enjoyed better-than-average growth over recent years and are expected to continue their climb.

Hedge
A strategy used to limit investment loss by making a transaction that offsets an existing position.

Income Stock
A security with a solid record of dividend payments and which offers a dividend yield higher than the average common stock. 
Index
A statistical measure of the state of the stock market, based on the performance of stocks. Examples are the Domestic Company Index (DCI), the Foreign Company Index (FCI) and the Botswana Bond Index (BBI). 
Inflation
An overall increase in prices for goods and services, usually measured by the percentage change in the Consumer Price Index.
Initial Public Offering (IPO)
A company’s first issue of shares to the general public.
Inside Information
Non-public information pertaining to the business affairs of a corporation that could affect the company’s share price should the information be made public. 
Insider
All directors and senior officers of a company, and those who are presumed to have access to inside information concerning the company. An insider is also anyone owning more than 10% of the voting shares of a company. 
Insider Trading
There are two types of insider trading. The first type occurs when insiders trade in the stock of their company. Insiders must report these transactions to the appropriate securities commissions. The other type of insider trading is when anyone trades securities based on material information that is not public knowledge. This type of insider trading is illegal.
Investment
The purchase or ownership of a security in order to earn income, capital or both. Investments may also include artwork, antiques and real estate.
Investment Advisor
A person employed by an investment dealer who provides investment advice to clients and executes trades on their behalf in securities and other investment products.
Investment Capital
Initial investment capital necessary for starting a business. Investment capital usually consists of inventory, equipment, pre-opening expenses and leaseholds.
Investment Dealer
Securities firms that employ investment advisors to work with retail and institutional clients. Investment dealers have underwriting, trading and research departments.
Investment Fund
A closed-end fund that offers investors the ability to buy a security that represents a portfolio of investments with a specific investment strategy. These products use funds raised through a public offering to invest in a portfolio of securities, which are actively managed to create income streams for investors, typically through a combination of dividends, capital gains, interest payments, and in some cases, income from derivative investment strategies. These funds are not directly related to an operating business. Some examples are: funds of income funds, senior loan funds, mortgage-backed security funds, and commodity funds.
Investor Relations
A corporate function, combining finance, marketing and communications, to provide investors with accurate information about a company’s performance and prospects. 
Issue
Any of a company’s securities or the act of distributing the securities. Issued shares refer to the portion of a company’s shares that have been issued for sale. A company does not have to issue the total number of its authorized shares. 
Issuer Status
The trading status of a listed or formerly listed issuer. Issuer status types include: delisted, listed, suspended, and trading.

Junior Corporation
A young company in the early stages of operations and growth.

Last Sale Price
For any listed security, the last sale price equals the last board lot sale price of the security on the exchange, in the regular trading session. 
Liabilities
The debts and obligations of a company or an individual. Current liabilities are debts due and payable within one year. Long-term liabilities are those payable after one year. Liabilities are found on a company’s balance sheet or an individual’s net worth statement.
Limit Order
An order to buy or sell stock at a specified price. The order can be executed only at the specified price or better. A limit order sets the maximum price the client is willing to pay as a buyer, and the minimum price they are willing to accept as a seller.
Liquidating Order
An order to close out an existing open futures or options contract. A liquidating order involves the sale of a contract that has been purchased or purchase of a contract that has been sold.
Liquidity
This refers to how easily securities can be bought or sold in the market. A security is liquid when there are enough units outstanding for large transactions to occur without a substantial change in price. Liquidity is one of the most important characteristics of a good market. Liquidity also refers to how easily investors can convert their securities into cash and to a corporation’s cash position, which is how much the value of the corporation’s current assets exceeds current liabilities. 
Listed Issuer
An issuer that has at least one class of securities listed on the BSE.
Listed Stock
Shares of an issuer that are traded on a stock exchange. Issuers pay fees to the exchange to be listed and must abide by the rules and regulations set out by the exchange to maintain listing privileges.
Listing Application
The document that an issuer completes and submits to an exchange when it applies to list its shares on the exchange. The issuer must disclose its activities, plans, management and finances in the application.
Long
A term that refers to ownership of securities. For example, if you are long 100 shares of XYZ, this means that you own 100 shares of XYZ company. 
Low Price
The lowest price at which a board lot trade was executed during a period of time. See also: Board Lot.

Market
The place where buyers and sellers meet to exchange goods and services. It also represents the actual or potential demand for a product or service.
Market Capitalization
The number of issued and outstanding securities listed for trading for an individual issue multiplied by the board lot trading price. Should a trading price not be available, a bid price, a price on another market, or if applicable, the price for an issue of the same issuer which the first issue is convertible into, may be used. Total market capitalization for a market is obtained by adding together all individual issue market capitalizations (warrants and rights excluded). 
Market Maker
A trader employed by a securities firm who is required to maintain reasonable liquidity in securities markets by making firm bids or offers for one or more designated securities up to a specified minimum guaranteed fill. 
Market Order
An order to buy or sell securities immediately at the best current price. 
Material Change
A change in an issuer’s affairs that could have a significant effect on the market value of its securities, such as a change in the nature of the business or control of the issuer. Under the principle of continuous disclosure, a listed issuer must issue a news release and report to the applicable self-regulatory organization as soon as a material change occurs. 
Member
Firms entitled to trade through the facilities of BSE. They are also permitted to act as sponsors for listed issuers or issuers proposing to be listed on the BSE.
Mutual Fund
A fund managed by an expert who invests in stocks, bonds, options, money market instruments or other securities. Mutual fund units can be purchased through brokers or, in some cases, directly from the mutual fund company.

NBFIRA
The regulatory authority that oversees the Botswana Stock Exchange
Net Change
The difference between the previous day’s closing price and the last traded price. 
Net Worth
The difference between a company’s or individual’s total assets and its total liabilities. Also known as shareholders’ equity for a company.
New Issue
A stock or bond issue sold by a company for the first time. Proceeds may be used to retire the company’s outstanding securities, or be used for a new plant, equipment or additional working capital. New debt issues are also offered by governments.
New Issuer Listing
Occurs concurrently with the posting of the new issuer’s securities for trading. The preconditions for listing include the acceptance by the Exchange that all listing requirements and conditions have been satisfied. The effective listing date is the date when the listed securities open for trading.
New Issuer Listing – Application
An issuer whose application for listing was based on the BSE listing application requirements. These applications in themselves provide prospectus-level disclosure; however, often the listing application is accompanied by an offering document or a prospectus.
New Listing
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.

Odd Lot
A number of shares that are less than a board lot, which is the regular trading unit decided upon by the particular stock exchange. An odd lot is also an amount that is less than the par value of one trading unit on the over-the-counter market. For example, if a board lot is 100 shares, an odd lot would be 99 or fewer shares. 
Opening
The market opens at 1030 hrs each business day. 
Original Listing/Initial Listing
A listing is designated as an original listing on BSE, if it satisfies the following three conditions:

• It meets listing requirements.
• It pays applicable listing fees.
• It is described in the exchange bulletin as an original listing by 

Typical examples of original/initial listings include: 

• An initial public offering (IPO)
• Transfer or secondary listing from another exchange
• A new entity created by a spin-off (such as a division, from an existing issuer, becoming its own publicly traded entity) 

Over-The-Counter (OTC) Market
The market maintained by securities dealers for issues not listed on a stock exchange. An OTC market is also known as an unlisted market.

Par Value
A security’s nominal face value. 
Penny Stock
Low-priced speculative issues of stock selling at less than P1.00 a share.
Portfolio
Holdings of securities by an individual or institution. A portfolio may include various types of securities representing different companies and industry sectors. 
Price-Earnings (P/E) Ratio
A common stock’s last closing market price per share divided by the latest reported 12-month earnings per share. This ratio shows you how many times the actual or anticipated annual earnings a stock is trading at.
Private Placement
The private offering of a security to a small group of buyers. Resale of the security is limited. 
Profit
What is left over for the owners of a business after all expenses have been deducted from revenues. Gross profit is the profit before corporate income taxes. Net profit is the final profit of the business after taxes have been paid.
Prospectus
A legal document describing securities being offered for sale to the public. It must be prepared in accordance with provincial securities commission regulations. Prospectus documents usually disclose pertinent information concerning the company’s operations, securities, management and purpose of the offering.
Push-Out
A push-out occurs during a share split when new shares are forwarded to the registered holders of old share certificates, without the holders having to surrender the old shares. Both the old and new shares have equal value.
Put Option
A put option is a contract that gives the holder the right to sell a specified number of shares at a stated price within a fixed time period. Put options are purchased by those who think a stock may decline in price.

Rally
A brisk rise in the general price level of the market or price of a stock.
Registered Traders
A trader employed by a securities firm who is required to maintain reasonable liquidity in securities markets by making firm bids or offers for one or more designated securities up to a specified minimum guaranteed fill. 
Revenue
The total amount of funds generated by a business.
Rights
A temporary privilege that lets shareholders purchase additional shares directly from the issuer at a stated price. The price is usually less than the market price of the common shares on the day the rights are issued. The rights are only valid within a given time period.
Risk
The future chance or probability of loss.

Securities
Transferable certificates of ownership of investment products such as notes, bonds, stocks, futures contracts and options.
Systematic Risk
Systemic risk refers to risk that are beyond the investors parameters and cannot be mitigated to a larger extent. Such risk often affects the economy and cannot be reduced or diversified as a reduction measure. Examples include: Global security threats, changes in taxation clauses, investment policies and shifts in socio economic parameters.
Settlement
The process that follows a transaction when the seller delivers the security to the buyer and the buyer pays the seller for the security. 
Settlement Date
The date when a securities buyer must pay for a purchase or a seller must deliver the securities sold. Settlement must be made on or before the third business day following the transaction date in most cases.
Settlement Price
The price used to determine the daily net gains or losses in the value of an open futures or options contract. 
Share Certificate
A paper certificate that represents the number of shares an investor owns. 
Speculator
Someone prepared to accept calculated risks in the marketplace for attractive potential returns.
Spread
The difference between the bid and the ask prices of a stock. 
Share Split
A corporate action that increases the number of securities issued and outstanding, without the issuer receiving any consideration for the issue. Approval by security holders is required in many jurisdictions. Each security holder gets more securities, in direct proportion to the amount of securities they own on the record date; thus, their percentage ownership of the issuer does not change. For example, a two-for-one stock split involves the issuance of two new securities for every old security. 
Stock Symbol
A one-character to three-character, alphabetic root symbol, which represents an issuer listed on BSE.
Structured Products
Closed-end or open-end investment funds, which provide innovative and flexible investment products designed to respond to modern investor needs, such as yield enhancement, risk reduction, or asset diversification. Structured products allow investors to buy a single unit/share of a fund that represents an interest in the investment portfolio. Based on the investment strategy, the portfolio can purchase a basket of securities, track an index, or hold a specific type of security or portion of a security.

The subcategories under the structured products include: investment funds, ETFs, capital trusts, split share corporations, and mutual fund partnerships. 
Suspended Issuer
An issuer whose trading privileges for a listed security or securities have been revoked by the BSE for violating one of its member rules. The listed issuer remains suspended until trading privileges have been reinstated, or the listed issuer is delisted.

Thin Market
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 thin market, price fluctuations between transactions are usually larger than when the market is liquid. A thin market in a particular stock may reflect lack of interest in that issue, or a limited supply of the stock.
Tick
Slang used for minimum spread. Depending on the stock price it could be a half-cent, one cent or five cents. 
Timely Disclosure Policy
This policy requires all listed companies to publicly disclose material information in a timely manner. 
Total Number of Shares
The total number of issued and outstanding shares for the security.
Trading Halt
A trading halt is imposed by the exchange, usually due to the dissemination of news that might impact a stock’s price. 
Trading Session
The period during which the Exchange is open for trading.
Traded Value
The total dollar value of shares traded during a trading session.
Transaction Date
The date when the purchase or sale of a security takes place. 
Transactions
As reported in exchange trading statistics, represents the total number of trades for a specified period.
Transfer Secretary
A trust company appointed by a listed company to keep a record of the names, addresses and number of shares held by its shareholders. Frequently, the transfer agent also distributes dividend cheques to the company’s shareholders. 
Transferable Security
A security that can be transferred from one party holder to another without restrictions provided that all proper documentation is included.

Underlying Interest
The specific security, commodity, index or financial instrument that an option or futures contract is traded. 
Underwriting
The purchase for resale of a new issue of securities by an investment dealer or group of dealers who are also known as underwriters. The formal agreements for these transactions are called underwriting agreements.
Unlisted
A security not listed on a stock exchange, but traded on the over-the-counter market.
Uptick
A stock is said to be on an uptick when the last trade occurred at a higher price than the one before it.

Venture Capital
Money raised by companies to finance new ventures.
Venture Company
A classification of BSE-listed companies that are in the early stages of development and meet the minimum asset, market value and shareholder distribution requirements for listing on the Venture Capital Board.
Volatility
A statistical measure of changes in price over a period of time.
Volume
See Debt Volume and Equity Volume.
VWAP
Volume-weighted, average trading price of the listed securities, calculated by dividing the total value by the total volume of securities traded for the relevant period. This definition is generally used by listed issuers to price their shares.

Warrant
A security giving the holder the right to purchase securities at a stipulated price within a specified time limit. Exercise of the warrant is solely at the discretion of the holder. Warrants are not exercisable after the expiry date. A warrant is often issued in conjunction with another security as part of a financing. A warrant may be traded as a listed security or it may be held privately.
World Federation of Exchanges (WFE)The World Federation of Exchanges (WFE) is a global trade association for the exchange industry. The membership is comprised of more than 50 regulated exchanges from all regions of the world. Together, these exchanges account for over 95% of world stock market capitalization, and most of its exchange-traded futures, options, listed investment funds, and bonds. BSE is an affiliate member of the WFE.

Yield
This is the measure of the return on an investment and is shown as a percentage. A stock yield is calculated by dividing the annual dividend by the stock’s current market price. For example, a stock selling at P50 and with an annual dividend of P5 per share yields 10%. A bond yield is a more complicated calculation, involving annual interest payments, plus amortizing the difference between its current market price and par value over the life of the bond.