Glossary of Terms

  • Backwardation

    For cash markets, this is a situation where the offer price of a security is lower than the bid price. For futures markets, it is a market condition in which the futures price is lower in the distant delivery months than in the near delivery months
  • BACS

    Stands for Bankers' Automated Clearing Service, a United Kingdom scheme for the electronic processing of financial transactions. Is used to withdraw funds from your account and takes 3 business days. Faster BACS arrives the same day but is limited to amounts up to £10,000.
  • Balance Sheet

    A statement showing at a specific point in time the assets and liabilities of a company.
  • Bargain

    This is another word for a transaction or a deal.
  • Bear Market

    This is the term for a market which is falling, traditionally defined as where the price is 20% below its recent high.
  • Bearer Securities

    These do not show the owner's name, and there is no register kept of all the current owners. If you physically hold the document, then you're the owner, just like a bank note.
  • Bed & ISA

    This is where shares in an investment account are sold and reinvested in an ISA. The benefit is you can use existing money or investments to take advantage of annual tax allowances rather than having to find new money, which may not be available.

  • Best bid

    The highest price any buyer has declared that they are willing to pay for a specific security at a given time, determined by the current quotes and orders in the trading system.
  • Best Execution

    This considers various characteristics of the financial instrument concerned: price, costs, speed and likelihood of execution and settlement, the size of the order, the possible execution venues available, liquidity, the settlement currency and any other consideration relevant to the execution of the order. These are weighted accordingly to each of the above criteria and are examined on an order-by-order basis. Usually price will be considered the most important factor in obtaining the best possible result for your orders. See our Order Execution Policy for further details.

  • Best offer

    The lowest price any seller has declared that they are willing to accept for a specific security at a given time, determined by the current quotes and orders in the trading system.
  • Bid

    The rate at which the market or a particular trader is willing to buy the stock from you.
  • Bid offer spread

    The difference between the buying and selling prices of a security.
  • Bid Situation

    This security is currently engaged in a bid situation.
  • Blue chip

    A publicly traded company known for the quality and wide acceptance of its products, services and management, and for its ability to profit and pay dividends to shareholders.
  • Bond price

    The market price of a bond depends on the coupon rate, the market interest rate and the number of years to maturity. Bond prices are inversely related to interest rates.
  • Bonds

    Debt securities issued by governments and companies as a means of raising capital which generally entitle the holder to a fixed-rate of interest during their life and repayment of the amount of the bond at maturity.
  • Bonus Issue

    Also known as a "scrip" or "capitalisation" issue. New shares are given to existing shareholders, free of charge, in proportion to their current holding. It helps a company increase the number of shares available for trading, and reduce the current market price per share.
  • Book Cost

    The original cost of an investment, generally used to compare against the current market value.
  • Bounce

    To drop to a low price and recover.
  • Bull Market

    A market which is is a rising trend.
  • Buyback

    A Corporate Action that will occur when a company decides to repurchase shares in existence by offering to buy back some of their shares from existing shareholders. This has the effect of reducing the number of shares, thereby increasing the earnings per share for existing shareholders.
  • Beneficial Owner

    Beneficial Owner - The underlying owner of a security, who has paid for the stock and is therefore entitled to the benefits of ownership.