Alexander David: Dedicated, independent broker providing online share dealing, investing & share trading

The Stock Exchange introduced a new, less regulated, market in June 1995. This is the Alternative Investment Market (AIM). It is designed primarily to enable trading in new, small and growing companies. A Press Release dated 20 February 1995 confirmed that shares and securities on AIM do not fail to be treated as quoted or listed for tax purposes.

A certificate of debt (usually interest-bearing or discounted) that is issued by a government or corporation in order to raise money: the issuer is required to pay a fixed sum annually until maturity and then a fixed sum to repay the principal.

A company through which transactions on an exchange may be cleared

A CFD is an agreement between two parties to settle, at the close of the contract, the difference between the opening and closing prices, multiplied by the number of underlying shares specified in the contract.

The 100 companies that have the largest value on the stock market (that is the largest total value, not the largest price per share) are included in the FTSE 100. The list of 100 companies is updated on a quarterly basis to ensure that it (roughly) contains the largest 100 UK companies at any point in time. Footsie:- Popular name for the FTSE 100 index of the UK’s largest 100 companies.

An index of the share prices of the 250 largest companies (by market capitalisation) immediately following the largest 100 companies.

An index containing the 700 largest companies on the London Stock Exchange. Like the FTSE 100 and FTSE 250, the index is named for the Financial Times (FT) and the London Stock Exchange (SE), who are its joint owners. The FTSE-ASI and the FTSE 100 are the indices generally tracked by Index Trackers.

The FTSE Small Cap is not a marketplace, but an index of smaller company shares quoted on the London Stock Exchange. It is made up of the companies in the FTSE All Share index that are outside the top 350 companies by market value. Many of our shares are constituents of this index, so it is a good indicator of how smaller companies similar to our own are doing overall.

A type of derivative that allows you to bid for the right to pay a future value on either an index option or a commodity. Futures are a great way to lose 100%, or possibly even more, of your investment, because if they expire worthless you get nothing. Futures have a fixed duration and normally only last for one year at the most.

When the government needs to borrow money, it sells you these. They are government bonds and as a rule the interest is paid gross (i.e. free of tax). They are very safe and their US equivalent is the Treasury bill, or “T-Bill”.

A public limited company that makes investments into a variety of other companies. Notwithstanding several important differences to unit trusts, these are also pooled stock market investment funds. Unlike unit trusts they can take on debt that can amplify the underlying movements.

A new issue or flotation is when the company actually has its shares listed on an exchange and are freely tradeable. There are hundreds of issues that take place all year, Alexander David Securities can help you decide on which ones to go for.

A share of very low market capitalisation (often a few million pounds) trading in multiples of just a few pence. Penny shares tend to be very volatile, subject to extreme price fluctuations on the flimsiest of rumours, and are far riskier than larger shares.

This the funding given to the company before listing. There is no guarantee that the company will list, but if it does then there is normally an increase from the Pre IPO to the IPO price which is called an uplift (profit). This is a high risk trade but with high risk comes high reward.

Also known as venture capital. Private equity groups buy other business. They put up a fraction of the cost themselves and the balance is usually funded by debt.

An option is a derivatives contract on an underlying instrument. Options on London stocks are often referred to as ’Traded Options’, but there is no difference between a traded option and an option.

Your money is invested with thousands of others in one pooled fund. Presiding over the fund is a manager or managers responsible for achieving the fund’s stated investment objective. Most unit trusts have high charges. They are to be replaced by Open Ended Investment Companies.