Glossary

This glossary is available to download as a PDF

1. A
2. B
3. C
4. D
5. E
6. F
7. G
8. H
9. I
10. J
11. K
12. L
13. M
14. N
15. O
16. P
17. Q
18. R
19. S
20. T
21. U
22. V
23. W
24. X
25. Y
26. Z

B

Backwardation

When the spot or near-term price of a commodity is higher than the forward price.

Basis Point

One hundredth of one percent (0.01%).

Basis Risk

When relationships between products used to hedge each other change or break down.

Bear Market

A falling market.

Best

The broker can buy or sell at the 'best' price available at his/her discretion.

Bid

The wish to buy.

Big-Bang

October 27th 1986, the stock exchange's new regulations were Introduced together with the automated price quotation system.

Black and Scholes

The original option pricing model used by many market practitioners, written by Black and Scholes in 1972, (see Scholes - Merton).

Blue Chip

Large established company - in China known as 'Red Chips'

Bond

A borrower of funds issues a bond stipulating the amount of payments to a lender, it may be linked to a floating rate (FRN) or a fixed interest rate.