Glossary of Terms

  • Investment Companies with Variable Capital (ICVCs)

    These are very similar to Unit Trusts, but they are set up as a company rather than as a trust. They are also known as Open Ended Investment Companies (OEICs).
  • Income

    Is the dividend or interest received from an investment.
  • Index

    An index consists of a ‘basket’ of securities’ prices which are used to show how a particular market is performing.
  • Index-Linked Bonds

    These are instruments which pay coupons which are initially set in line with market interest rates. Their coupons, however, are adjusted in line with movements in the RPI. Their redemption value may also be index-linked.
  • Indicative Quote

    A quote whose price and volume are not guaranteed. Indicative quotes are displayed during the pre-mandatory quote period, and market participants are not obliged to deal at these prices.
  • Individual Savings Account (ISA)

    This is a tax efficient investment wrapper available to UK residents. It allows you to shelter certain investments from capital gains and income tax.
  • Initial margin requirement

    The initial margin requirement is the amount required to be deposited and subsequently maintained in order to open a derivatives position.

  • Initial Public Offering

    An initial public offering (IPO) is a type of public offering where shares of stock in a company are sold to the general public, on a securities exchange, for the first time. Through this process, a private company transforms into a public company.

  • Insider Dealing

    Is buying or selling shares based on specific, unpublished information, which would be likely to affect the share price if it were made public knowledge. An "insider" can't deal based on the information, can't encourage others to deal, or give the information to anyone else. To do so is a criminal offence.
  • Insolvency

    The inability of a person (or a company) to settle debts.
  • Instrument

    Something that has financial value such as stocks, bonds shares or currencies.
  • International Order Book (IOB)

    An order-driven trading service for international equities, provided by the London Stock Exchange.
  • Investment Club

    A group of investors, usually friends or work colleagues, who contribute periodically to a central fund to invest in shares.
  • Investment Trusts

    Investment Trusts are companies whose shares are listed on the London Stock Exchange, and are therefore closed-ended, unlike unit trusts and OEICS, which have the ability to create new units should there be further investments in the product. They invest their money into shares and bonds of other companies.
  • ISIN

    An ISIN (International Securities Identification Number) is an international code for a listed security. An ISIN consists of a two-character country code, a nine-digit number and one check digit.
  • Issued share capital

    The number of shares a company has made available for shareholders. The company's issued share capital can never be greater than their Authorised Share Capital.