Tadawul All Share Index (TASI)
An index designed to reflect the movement of the equity market on the Saudi Exchange.
Ask price
The price at which a trader is willing to sell a security.
Bid price
The price a trader is willing to pay for a given share.
Bull run
When a market as a whole is on a prolonged period of increasing prices.
Central Securities Depository (CSD)
A specialist financial institution holding securities either in certificated or uncertificated form, so that ownership can be transferred through a book entry rather than physical transfer of certificates.
Clearing
All activities pertaining to a security being traded from the moment a commitment is made regarding a transaction to the moment it is settled.
Custodian
A financial institution that holds customers securities for safeguarding to minimize the risk of their theft or loss. It can also be a clearing member for banks, corporations, foreign investors and institutional investors. They clear the trade by ensuring pay-in/pay-out of securities.
Depository system
IT system used by stock markets to facilitation of clearing, settlement, safekeeping and registry functions.
Derivative
A security or financial instrument whose value is determined by an underlying asset.
Exchange Traded Funds (ETF)
A fund made up of a portfolio of shares that reflect the composition of an index. The fund is listed on a recognized exchange and trades like a normal security.
Exchange Traded Products (ETPs)
Securities that are traded on a stock exchange, the value of which is derived from underlying instruments like commodities, currencies, share prices or interest rates.
Futures contract
A contractual agreement, to buy or sell a particular a particular commodity or financial instrument at a predetermined price in the future.
Hedge
A derivative instrument to protect an investment from unfavourable changes in value.
Independent custody
Providing custody services if trading services are provided by an execution broker.
Index
A simulated portfolio of securities that represents a market or a portion of that market.
Liquidity
How easily securities can be bought or sold on the market. A security is liquid if there are units available for large transactions to take place without substantial changes in price.
Liquidity risk
The risk that arises from the difficulty in buying or selling a security.
Market maker
A member firm of an exchange that buys and securities for its own account (principal trades) and for customer accounts (agency trades) and who promotes liquidity in the market.
Member
An individual or corporate body who has the right to trade in securities on an exchange on behalf on investors.
Option
The right (but not the obligation) to buy (a call option) or sell (a put option), a given amount of stock, commodity, currency, index or debt at a specified price (the strike price) during a specified period of time.
Options contract
A financial derivative representing a contract by the option writer to the option holder.
Over-the – Counter (OTC)
A security traded in some context other than a formal exchange, such as a dealer network.
Par value
The nominal value assigned to a security by the issuer.
Securities Borrowing and Lending (SBL)
A collateralized loan of securities from one party (lender) of transaction to another party (borrower).
Shareholder register
A list of a company’s shareholders updated on an ongoing basis. The register includes each person’s name, address and the number of shares owned.
Short selling
The practice of borrowing shares with the idea of returning them later. This is usually done when it is believed that the shares will fall in price, as the borrower could make a profit by selling the shares now and returning at a lower price.
Volatility
The price movements of a stock or a market as a whole.