Key Terms

Market Capitalization - Way of estimating company's value: a method of assessing the value of a company by multiplying the number of shares by the stock market price


Short Selling - Sale of securities before payment: the sale of a borrowed security in anticipation that the security price will fall and can be paid back from the profits earned after repurchasing it at the lower price

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.


Bear Market - A market in which stock prices are falling.

Bull Market - A market in which stock prices are rising.

Commission - The fee charged by an investment advisor or broker for buying or selling securities as an agent on behalf of a client.


Equities - Common and preferred stocks, which represent a share in the ownership of a company.

Freeze - An interruption in trading on a stock, triggered when an order violates parameters set by Market Regulation Services for that particular stock.

Index - A statistical measure of the state of the stock market, based on the performance of stocks. Examples are the S&P/TSX Composite Index and the S&P/TSX Venture Composite Index.

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.


Continuous Disclosure - A company's ongoing obligation to inform the public of significant corporate events, both favourable and unfavorable.

Penny StockLow-priced speculative issues of stock selling at less than $1.00 a share.

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 $50 and with an annual dividend of $5 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.


Money MarketPart - of the capital market established to buy and sell short-term financial obligations. These include federal government treasury bills, short-term Government of Canada bonds, commercial paper, bankers' acceptances and guaranteed investment certificates. Longer-term securities are also traded in the money market when their term shortens to three years.

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.