It is a much-studied column, and it is surprising what interest and entertainment can be extracted from these daily reports of the health and spirits of the money market if it only takes the trouble to master the peculiar vocabulary. The principal terms connected with the investment of money we shall set down here, with a few words of explanation for each. A business woman—no matter whether she has money to invest or not—should at least know what they mean.
The Money Market is a more or less figurative expression, covering the whole field for the investment or employment of money, the leading dealers in the market being bankers, bill discounters, and capitalists of all sorts. Money is cheap or dear in the market according as the rates for discount are low or the reverse; and business is brisk or flat, according as the amount of such discounts is large or small.
A stockbroker is a broker who deals in the purchase and sale of stocks or shares for others. What is known as a stockjobber is one who buys and sells stock on his own account on speculation: he is a useful medium between the public and the broker.
There are some dealers on the Stock Exchange—the mart where stocks and shares are bought and sold—who, by a poetic figure, are known as Bulls and Bears. Bulls are dealers who buying stock low have an interest in trying all sorts of devices to raise prices. Bears, on the other hand, try to bring prices down, they being commonly persons who have sold and undertaken to deliver more stock than they are in possession of, and who are therefore under the necessity of buying in at a loss in order to settle their accounts. How they came to be called bulls and bears is doubtful. “They have been connected,” says one writer, “with the animals to which allusion is made by a reference to their respective modes of attack. The bear crushes, or bears down his antagonist, whereas the bull’s method is to toss him up.”
Transfer is the legal operation by which the rights and responsibilities of the people disposing of stock or shares are conveyed to those who buy. When the purchaser, or his or her attorney, signs the transfer in the bank books, that is known as Acceptance of Stock.
The periodical payments of interest made by the Government to the holders of the National Debt and other public funds are known as Dividends. The term dividend is also applied to the sums paid to the shareholders of a company at each periodical division of profits.
Cum-Dividend means that the purchaser of the shares is to receive the dividend then payable or about to be paid. That is to say, the sale is with the dividend.
Ex-Dividend just means the reverse; a sale ex-dividend is without the dividend.
Paid-up shares are shares on which the full subscribed or nominal amount has been paid up. In the case of a limited liability company, for example, the shares may be nominally of £100, with £50 paid-up. Here the purchaser has to consider that she is liable at any time to be called on to subscribe the remaining £50 per share. Should the company come to grief she will not only lose what she paid for the shares, but be liable for £50 as well upon each share.
When the price of securities of any kind is equal to their nominal value, they are said to be at par. Suppose £100 shares in a gas company are selling at £94, they are 6 per cent. below par; if £103 they are 3 per cent. above par.