Broker

A broker is an individual or firm that acts as an intermediary between an investor and a securities exchange. Because securities exchanges only accept orders from individuals or firms who are members of that exchange, individual traders and investors need the services of exchange members.

Margin Account

A margin account involves borrowing funds from your broker-dealer to purchase securities, using the account as collateral. You will also be required to pay a periodic interest rate to the broker. A margin account can increase your purchasing power however it can also expose you to greater losses.

Markets in Financial Instruments Directive (MiFID)

Markets in Financial Instruments Directive (MiFID) is the framework of European Union (EU) legislation for investment intermediaries that provide services to clients around shares, bonds, units in collective investment schemes and derivatives (collectively known as ‘financial instruments’) MiFID was applied in the UK from November 2007 and was revised by MiFID II, which took effect in […]

Participation notes

Participation notes are a form of derivative, issued by a counterparty such as a bank or a broker, which give an investor the same exposure as buying the underlying security would. For example, for an investor who isn’t allowed to hold shares in an Indian company directly, a bank or a broker can create a […]

Principal – of a debt

Principal, in the context of debt, refers to the amount originally borrowed. The borrower has to repay the principal plus interest. The term is also used by brokers to distinguish between dealing as principal (meaning on their own behalf) or dealing as agent (on behalf of someone else).

Free float

All the shares that are available to trade, i.e. excluding shares locked up for various reasons. Examples of where shares may be locked up include those held by Directors, Investment managers, Distributors (Brokers) and governments.

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Broker