Share Dealing Glossary.

Unsure of any share dealing terms? Check out our glossary to find out the meaning of many of the phrases associated with share dealing. You can find out more about the products Halifax Share Dealing offer here.

Halifax Share Dealing Glossary A-E


When one company takes over another.

Advice Date
The last date on which HSDL can accept an instruction to take up an offer.

Advisory broker
An advisory broker advises (and executes) buy and sell decisions on behalf of the client. However, the final decision to buy and sell always rests with the client. Halifax Share Dealing is an execution-only stock broker.

AIM stocks
Alternative Investment Market (AIM) stocks are smaller and growing companies, the market began trading in June 1995.

Fund Managers may apply an Annual Management Charge (AMC) on the value of the fund holding. This charge is built into the price of the fund. Please consult the Key Investor Information Document (KIID) for your fund using our Funds Centre for more information. This can also be referred to as on going charges.

Annual General Meeting (AGM)
An annual meeting called by the directors of a company that allow shareholders to stay informed and involved with company decisions and workings.

Average Price
A transaction effected at a price based on a volume weighted average price over a given period.



Best bid
The highest bid price for a specific tradable instrument (i.e. 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 offer
The lowest offer price for a specific tradable instrument (i.e. 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 price
The price at which a market participant is bidding to buy shares.

Bidding Company (in a Takeover)
The company that is planning to acquire another company.

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
The issue by a company of new shares which do not require any payment to be made by the shareholder. This has the effect of making the company's shares more marketable because of the increased number available and the lower market price.

An Exchange member firm, which provides advice and dealing services to the public and can deal on its own account.



Capital Gains Tax (CGT)
The tax an individual is liable to pay on realised capital gains which accrue in a year of assessment during any part of which the individual is resident in the UK. ISAs are free from CGT.

CREST Depositary Interests (CDIs)
These are UK securities representing an underlying interest in an overseas security. They are issued on a one-for-one basis. Because CDIs are UK securities, you can receive dividends in sterling and can buy or sell CDIs easily in the UK.

Certificates are the traditional way of holding shares and means your shares will be in paper format.

The difference between the previous day's closing price and the most recent price of a security.

Closing Price
The closing price is the last price for a tradable instrument at the time the market closes. For SETS, the closing trade price is the uncrossing trade price at which orders execute during an auction, or a Volume Weighted Average Price (VWAP). For AIM listed securities the closing price is the best bid, offer and mid price calculated from market maker quotes at the end of the mandatory quote period.

Where a company reduces the number of shares they have in circulation by a set ratio for all shareholders, generally in turn increasing the price per share.

This is the changing of one type of share for another.

Corporate action/event
A change affecting a company's shares which may impact shareholders and often requires action by the shareholder.

Corporate Bonds
Corporate bonds are debt securities issued by private and public organisations

The paperless share settlement system through which trades executed on the London Stock Exchange (LSE) are settled. CREST is operated by CRESTCo, and was introduced in 1996. See Settlement.



Daily change
The daily change in the price of a security, i.e. the difference between the most recent price of a security and the previous day's closing price.

Dealing commission
Dealing commission is the charge made by the brokers who buy and sell shares on your behalf. The commission charge is usually based on the value of the shares being bought and sold.

When a company no longer meets the requirements of the exchange on which it trades and so is removed on either a voluntary or involuntarily basis.

When a company separates its existing business into smaller components. These components can trade independently or may be sold to raise capital.

The process of investing across a range of investments in order to diversify (or minimise risk). As a result, if one investment performs poorly, better performance from the rest of the portfolio helps to reduce the risk of loss.

That part of a company's profits after tax which is distributed to shareholders - usually expressed in pence per share. Also see Scrip Issue.



An instruction given by a shareholder to express their decision about a corporate action.

This is the number of shares received, in addition to your original holding. The entitlement is based on your existing shareholding and is calculated as a ratio.

The risk-sharing part of a company's capital, usually made up of ordinary shares.

Equity option
Equity options give the option buyer the right to buy or sell shares of companies. The standard LIFFE contract size for equity options is 100 or 1000 shares.

Ex Date
If a customer holds shares in a company at the start of business on this day, they will be entitled to receive a dividend.

Excess application
Companies occasionally give shareholders the option to apply for more than their entitlement. This is not always guaranteed and is subject to scaling back.

Exchange Traded Fund (ETF)
A collective investment vehicle which tracks indices - they can allow low cost exposure to the performance of an index.

Execution only
An execution only broker buys and sells shares on the instructions of the client. Halifax Share Dealing is an execution only broker.

To take up your rights as a shareholder.

Exercise price
The exercise (or strike) price is the price at which the option can be exercised, regardless of the actual market price of the stock.

Extraordinary general meeting
A shareholder meeting held in addition to the company's Annual General Meeting (AGM). Often held to discuss or vote on important issues.


Halifax Share Dealing Glossary F - K


Financial Conduct Authority (FCA)
An independent body which regulates the financial services industry in the UK.

Financial year
The year for which corporate tax rates apply.

FTSE 100
The index of the top one hundred companies listed on the London Stock Exchange.

FTSE 250
The index of the top 250 companies listed on the London Stock Exchange.

A fund is a collective investment scheme where money is pooled, and invested in a portfolio of securities with a common investment purpose. OEICs and Unit Trusts are examples of funds.

Fund manager
A fund manager is a professional who decides how fund money is invested (see fund).

A futures contract is an agreement or obligation to buy or sell a given quantity of a particular security, at a specified future date at a pre-determined price.



Gearing is a feature of leveraged instruments such as covered warrants, futures and options. In an option, by investing a small amount called the option premium, investors can multiply their gains since returns are magnified.

A Gilt is a bond issued by the government.

Going short
Selling futures involves a commitment to sell the underlying asset at a future date at a specified price. This is called going short.

The total amount before deductions (e.g. before tax deductions).



A hedge is typically accomplished by making approximately offsetting transactions that will largely eliminate one or more types of risk. Hedging Investors can use derivatives and covered warrants to hedge investments. For instance, if an investor owns a particular stock, he or she can neutralise the impact of an impending fall in price by buying a put option, selling futures or buying a put warrant.

The highest price that a security traded at during a certain time period.



A statistical measure of the changes in a portfolio of stocks representing a portion of the overall market. For instance, the FTSE 100 and the S&P500 are examples of indices.

Indicative Quote
A quote whose price and volume are not guaranteed. That is, market participants are not obliged to deal at the displayed prices or volumes, when their quotes are indicative. Indicative quotes are displayed during the pre-mandatory quote period.

Individual Savings Account (ISA)
An ISA is a tax efficient savings account.

Initial Public Offering (IPO)
Also known as flotation, it is the company’s first offer of shares in the stock market. The shares may be offered at face value or at a premium. Also see Offer for sale.

Any company or other legal person or undertaking (including a public sector issuer) any class of whose securities has been admitted or is, or is proposed to be, the subject of an application for admission to trading.


Halifax Share Dealing Glossary L - Q


To take no action on a voluntary Corporate Action.

Limited company
A limited company is privately owned with less than 50 shareholders having limited liability. Nearly all newly formed companies in the UK are incorporated as limited companies.

When a company becomes insolvent, it may go into liquidation, wherein all its assets are sold and the proceeds are distributed among the debtors and shareholders, in that order.

Listed company
A company whose securities have been admitted to the UKLA’s Official List and admitted to trading on the London Stock Exchange.



Mandatory event
A Corporate Action which will take place regardless of whether shareholders approve.

An account with a broker where a client is able to purchase securities on credit after the margin has been deposited.

Market Abuse
The Market Abuse Directive adopted by the UK on 1st July 2005 expressly prohibits insider dealing, market manipulation and misleading behaviour. Making statements or spreading rumours through the mass media or otherwise (e.g. internet chat rooms) which give or are likely to give a regular user of the stockmarket false or misleading impressions as to the supply of or demand for a listed share, can be a criminal offence.

Market price
The price of a security. For shares, there are two prices quoted on the exchange – bid price and offer price.

Maturity period
This is the life of a bond or security.

In a merger, two companies come together to become one. The shareholders of the merging companies often become joint owners of the combined entity.

Mid price
A price between the offer and bid price. The mid price is equal to the sum of the best bid price and the best offer price divided by two, and rounded up to be consistent with the relevant price format.

Markets in Financial Instruments Directive (MiFID)
MiFID introduced new and more extensive requirements that firms have to adopt, in particular for their conduct of business and internal organisation.

Money laundering
The process of disguising money obtained from criminal activity.



Name change
Whenever a company changes the name under which it is listed.

The amount remaining after deductions (e.g. after tax adjustments have been made).

Nil-paid rights
A right to buy shares (usually at a discounted rate) that has come at no cost to the seller. Shareholders are given options as to what to do with the rights. Options can often include selling the rights, taking up the right to buy or tail swallowing.

Nominee account (Halifax Share Dealing Account)
A nominee account is where we hold your assets on your behalf. The shares you buy are registered in our name but you retain ownership of them. There is less paperwork and you don't have to worry about losing your share certificates.

The New York Stock Exchange (NYSE), the world’s largest stock exchange.



An Open-Ended Investment Company (OEIC) is a type of collective investment scheme, similar to a unit trust except that an OEIC is incorporated as a separate legal entity and issues shares rather than units.

If you're looking to invest in a fund, please note the fund manager will charge an 'ongoing charges figure' from the fund (also referred to as the OCF). You can find the OCF within a fund’s 'Key Investor Information' Document' (KIID).

Open Offer
The Company will announce a number of shares to be issued at a set price.

Ordinary shares
The most common form of share. Holders may receive dividends in line with the company's profitability and recommendation of its directors.



On the 6th April 2008 the Government turned all PEPs into ISAs.

A Placing is the issue of new shares via an auction process. Unlike a rights issue or open offer, a placing of shares is not an offer to existing shareholders; it is open to anyone, usually institutions.

Preference shares
These are normally fixed-income shares whose shareholders have the right to receive dividends before ordinary shareholders and rank above ordinary shareholders for the repayment of their investment in the company if it is wound up.

When a company applies for a listing of its securities which are to be offered to the public in the UK, a prospectus is required in accordance with the UKLA’s Listing Rules, detailing information on the company, its accounts, directors and its securities.

Public limited company (plc)
A company whose shares may be purchased by the public and whose share capital is not less than a statutory minimum. Not all plcs are listed companies



Qualifying Shareholder
A shareholder who holds the stock on the qualifying date (ex-date).

An offer to buy or sell a quote driven security. Quotes are displayed by market makers that are registered in that security.


Halifax Share Dealing Glossary R - U


Record Date
This is the date on which the Registrars for the company will distribute entitlements to shareholders. It is usually prior to the ex-date. It does not guarantee entitlement. If a customer sells their stock after record date but prior to the ex-date, they are not entitled to participate in the offer. If a customer buys stock after record date but prior to ex-date and holds them until the ex-date, they are entitled to participate in the offer.

A company which is responsible for keeping a record of a listed company’s shareholders. Each company has its own registrar responsible for maintaining the share register for its holdings.

Return of capital
A payment from an investment back to the shareholder which is not treated as income. 

Rights issue
An invitation to existing shareholders to purchase additional shares in the company, usually at a discounted price.

Risk is the probability that the actual return of an investment will be different from the expected return. The higher the risk, the higher will be the probability of gain or loss on the investment.



Scale back
If more shares are applied for than are going to be issued, the Company will 'scale back' applications. The scale back will be applied across the applications to give a consistent scale back to all applicants. Shareholders will be repaid funds for the shares not actually issued.

Scheme of arrangement
A term used to describe a complex event where the original stock is usually replaced by stock and/or cash.

Scrip dividend
An issue of shares available to shareholders that replaces a dividend payment. Shareholders have the option to forgo their dividend for the share alternative.

Scrip issue
The issue by a company of new shares which do not require any payment to be made by the shareholder. This has the effect of making the company's shares more marketable because of the increased number available and the lower market price.

Securities are the generic term for shares and bonds.

Settlement, or the settlement date is when your trade is completed. It is the day you receive your money from sales or pay for shares you have bought. Settlement is usually two working days after you bought or sold the shares if you hold them electronically in our nominee account, or 10 working days after you bought or sold the shares if you have certificated shares.

SIPP's or Self Invested Personal Pensions are designed for you to take full control of your pension. Once a SIPP is funded, there is a wide variety of investment options for you including funds, unit trusts, Open Ended Investment Companies (OEICS) and UK shares. Once the SIPP is funded, you are not able to withdraw from it until you are 55.

The authorised share capital of a company is divided into a number of equal parts. Each part is called a share.

A general term that can cover shares, gilts and corporate bonds.

Stock exchange
A stock exchange is where stocks and shares are bought and sold.

Stock Exchange Daily Official List code (SEDOL)
A 7 digit alphanumeric reference for a listed security.



Tail swallowing
When shareholders are given the rights to buy shares, tail swallowing is the method of selling just enough rights to take up and buy the remaining rights worth of shares.

The acquisition of one business or company by another.

Tender offer
An offer made by a company to purchase shares from shareholders, often at a price higher than the current market price.

TIDM (ticker) code
The 3 or 4 lettered unique stock market code for a selected company.

A trade is a deal made on the London Stock Exchange. Sometimes referred to as a 'bargain'.

A type of order which is executed (where possible) when a price reaches or falls to a predetermined 'trigger' price.

A fiduciary relationship that empowers one or more people (trustees) to safeguard and administer the assets (money or property) of the beneficiaries or investors.

T+ 2
This means the settlement date will be two working days after the trading date. For example, if you sell £1,000 of shares on Monday 1st June and settlement is T+2, you'll receive the £1,000 two working days later on Wednesday 3rd June.



Underlying asset
The value of a derivative instrument depends on the performance of the underlying asset or security. These may be commodity derivatives such as gold, sugar, jute, pepper, iced broilers or coffee. They could also be financial in nature such as stocks, bonds, gilts, currencies and money market instruments.

Unit Trusts
A unit trust is a portfolio of holdings in various companies. This is divided into units and managed by professionals.


Halifax Share Dealing Glossary V - Z


A measure of the amount of movement in the price of an instrument.

Voluntary corporate action
A corporate action where the outcome is determined by a decision made by the shareholder.

Voting rights
The entitlement of ordinary shareholders to vote in person or by proxy at company general meetings.

VWAP (Volume weighted average price)
Volume weighted average price (VWAP), which is calculated by dividing the value of trades by the volume over a given period. A closing 10 minute VWAP is used to set closing prices on the order book.



A Warrant is a tradable security providing the holder with the right to buy specific shares at a set price on a future date.



The return earned on an investment taking into account the annual income and its present capital value. There are a number of different types of yield, and in some cases different methods of calculating each type.


Halifax Share Dealing Limited. Registered in England and Wales no. 3195646. Registered Office: Trinity Road, Halifax, West Yorkshire, HX1 2RG. Authorised and regulated by the Financial Conduct Authority, 12 Endeavour Square, London, E20 1JN under registration number 183332. A Member of the London Stock Exchange and an HM Revenue & Customs Approved ISA Manager.