An underwriter or a market maker that is a sizable holder of a given security or that facilitates the trading of the security. Core liquidity providers ideally bring greater price stability and distribute securities to both retail and institutional investors. Taobiz explains Core Liquidity Provider Firms that underwrite or provide the financing for equity or debt transactions and then make a market or assist in the trading of these securities are said to be core liquidity providers. Without their assistance, the number of transactions in the security would decrease and the ability of buy- and sell-side firms to accumulate or dispose of stock would be diminished.
An essential, important or valuable property of a business without which a company cannot carry on with its profit-making activities. A business would dissolve without its core assets, and companies that sell off core assets are usually liquidating and on the verge of bankruptcy. Taobiz explains Core Assets Core assets are crucial to the continued success of a business. These assets help the business run and stay viable. Companies that are having money trouble tend to raise money initially by selling off non-core assets (assets that are not essential to the continued functioning of a business), not core assets.
The Copenhagen Stock Exchange serves as Denmark's official market for securities. The CSE became a limited company in 1996 and lists shares, fixed income instruments and derivatives. The exchange uses an electronic ordering system to facilitate efficient order matching. Taobiz explains Copenhagen Stock Exchange - CSE The Copenhagen Stock Exchange is a member of the OMX Exchange group, made up of such markets as the Stockholm, Helsinki and Iceland exchanges. The CSE manages the C20, a stock index containing 20 of the exchange's blue chip companies. Investors can buy or sell futures and options with the C20 Index as the underlying asset.
A slang term used to describe someone considered to have bad luck with stock picking. Coolers are usually blamed for the poor performance of a stock after they have either purchased or recommended those shares. Taobiz explains Cooler The term "cooler" has been used to describe individuals who are perceived to have bad luck, and who transfer that luck to others. Some superstitious investors believe that equities tend to perform poorly once purchased by a cooler, and that performance rebounds when the cooler sells his or her shares. Many television and digital media analysts have been referred to as coolers following the poor performances of companies to which they had previously given "buy" ratings.
Preferred stock that includes an option for the holder to convert the preferred shares into a fixed number of common shares, usually anytime after a predetermined date. Also known as "convertible preferred shares". Taobiz explains Convertible Preferred Stock Most convertible preferred stock is exchanged at the request of the shareholder, but sometimes there is a provision that allows the company (or issuer) to force conversion. The value of convertible common stock is ultimately based on the performance (or lack thereof) of the common stock.
The price per share at which a convertible security, such as corporate bonds or preferred shares, can be converted into common stock. Taobiz explains Conversion Price The conversion price is determined when the convertible security is issued and can be found in the bond indenture (in the case of convertible bonds) or in the security prospectus (in the case of convertible preferred shares). The conversion price is essential in determining the number of shares to be received, by computing the quotient of the principal value of the convertible security divided by the conversion price. Usually, the conversion price is set at a significant amount higher than the current price of the common stock, so as to make conversion desirable only if a company's common shares experience a significant increase in value.
An options trading strategy employed to exploit the inefficiencies that exist in the pricing of options. Conversion arbitrage is a risk-neutral strategy, whereby the trader buys a put and writes a covered call (on a stock that the trader already owns) with identical strike prices and expiration dates. A trader will profit through a conversion arbitrage strategy when the call option is overpriced. Taobiz explains Conversion Arbitrage If the price of the underlying security falls, the put purchased increases in value by the same amount as the loss incurred by writing the call. If the underlying security's price increases, both the put and the call expire worthless. In both situations, the trader is risk neutral, but profits from the difference between the price at which the call was sold and the put was purchased. As with all arbitrage opportunities, conversion arbitrage is rarely available. This is because any opportunity for risk-free money is acted on quickly by those who can spot these opportunities quickly.
A reverse movement, usually negative, of at least 10% in a stock, bond, commodity or index. Corrections are generally temporary price declines, interrupting an uptrend in the market or asset. Taobiz explains Correction A healthy market will correct from time to time.