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Glossary

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

D

DAX
The major companies listed on the German Stock Exchange.

Day Trader
Someone who jumps in and out of a stock on a daily basis, hoping to profit from small price movements.

Dealing Hours
Currently 0800 to 1630 Monday to Friday.

Demutualisation
The process by which a mutually owned building society or life office becomes a public limited company. Members of the former mutual usually receive windfall or free shares.

Deposit Account
An account opened and operated by us with a United Kingdom bank or building society for use in connection with your share dealing account.

Derivative

A security whose price is dependent upon or derived from one or more underlying assets. The derivative itself is merely a contract between two or more parties.

Discretionary
A discretionary broker has the authority to deal on behalf of a client and to make investment decisions without their prior approval. The minimum size of a Discretionary portfolio is £50,000. A fee will be charged on the value of the entire portfolio alongside standard comissions on dealing.

Dividend
The part of a company’s profits after tax which is distributed to shareholders – either as cash or shares.

Dividend Allowance

From April 2016 the Dividend Tax Credit will be replaced by a new tax-free Dividend Allowance.

The Dividend Allowance means that you won’t have to pay tax on the first £5,000 of your dividend income. You will, however, pay tax on any dividend income you receive over £5,000 at the following rates:

•7.5% on dividend income within the basic rate Income Tax band
•32.5% on dividend income within the higher rate Income Tax band
•38.1% on dividend income within the additional rate Income Tax band

From April 2018 the Dividend Allowance will be reduced to £2,000.

Dividend Yield
A method of assessing the income from an investment. It is the annual gross dividends (as currently declared or forecast) expressed as a percentage of the current market price.

Dow Jones
The top companies on the New York Stock Exchange (often regarded as the more established American companies).

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