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Glossary

We have compiled a comprehensive A-Z glossary of share dealing and investment terms.

B

BACS
Bankers Automated Clearing System.

Bear
An investor who sells a security in the hope of buying it back at a lower price, as they believe the market will go down. A bear market is a falling market in which bears would prosper.

Bed & ISA

A Bed & ISA transaction is where a parcel of shares in the same Company, held in an individual’s own name and outside of an ISA, are sold and then simultaneously bought back within an ISA.

It is not possible under HM Revenue and Custom (HMRC) rules to put shares directly into an ISA. This means that to put your shares into an ISA they must be first sold, the cash transferred into the ISA and then the shares repurchased. The sale and repurchase are made at the same time to limit potential price movement.

Best Execution Policy

Investment firms must take all reasonable steps to obtain the best possible result, taking into account price, costs, speed, likelihood of execution and settlement, size, nature or any other consideration relevant to the execution of the order – see our Best Execution Policy.

Bid Price
The price at which investors can sell their shares.

Big Bang
27th October 1986, when the London Stock Exchange’s new regulations took effect and the automated price quotation system was introduced to The City.

Blue Chip
The term used to refer to larger, well-known companies which are generally lower risk and provide a steady income.

Boiler Rooms
Operations, usually based outside the UK, set up specifically to defraud unsuspecting individuals and often involving very large sums of money. Also refer to our FAQs.

Bonds
Bonds are effectively IOUs. Investors can lend a company or government money for a set period in return for a fixed income, referred to as the coupon. This set income means bonds are often called ‘fixed interest’ investments. When the bond matures, you should get your original investment back.

Bonus Issue
New shares issued by a company which do not require any payment from 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. Also known as a Capitalization or Scrip Issue.

Bull
An investor who buys a security in the hope of selling it at a higher price, as they believe the market will go up. A bull market is a rising market in which bulls would prosper.

Business Days
Days during which the London Stock Exchange and banks in England and Wales are open for business, with the exception of weekends.

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