An asset represents value of possession that can be converted into cash. May be a stock, currency, commodity or index.
An option that offers a fixed return that is prearranged that the investor receives immediately upon expiry
A term that refers to a specific type of financial trading method that offers a fixed rate of return that is predetermined before the investment is made.
Trading on an asset using Call/Put method with the belief that the value of the asset will be higher that the rate
A price reported in “real time” without delay
Allows traders to increase the exact same option, produce a identical option which will eventually produce multiple profits.
A type of option that was traded on select markets but has been introduced to the public like binary options
The value of an asset before the time of expiry
The expiry rate is the value of the traded asset at the expiry time, this rate determines whether the trade ended in the money or out of the money.
The time and date when an option or trade expires
Fundamental analysis uses past and present data, with the goal of making financial forecasts.
A trade in which the traders predicts that the chosen asset will expire at a price that is higher than the rate price.
An asset in which moves in the direction predicted by trader during a specific trade.
Also known as “the stake”, this is the sum of money invested in on a trade
The maximum loss possibility that equals to the premium cost
Low A trade in which the trader predicts that the underlying asset will expire at a price that is lower than the rate price.
A price that represents the current value of an underlying asset
Fixed Option is a type of a binary option trading method in which the trader stays in the money if the traded asset reaches its predefined price before the expiry time.
The return is the amount of the original investment that the trader will receive if the investment is profitable.
A term used to describe trades that had an unprofitable result
Payouts funds that are reciceved when the trade was profitable, the payouts is a predetermined amount or percentage on the trade
Trading an asset using the CALL OR PUT method with the belief that its value on the expiry will be lower than that the rate placed
Binary options signals are trading recommendations provided to customers with a certain initial investment amount placed unto their account
A partial ownership of a company or enterprise
Uses past data in order to predict future trends in the price of an asset, technical analysis considers all aspects of an asset price are built into its
market price. As a result, certain trends can be assumed in order to determine which direction an asset will take.
The time and date when an trade concludes
Binary options allows traders to trade with a variety of assets such as currencies, indices, stocks, and commodities.
Small capitalisation stocks are relatively small stocks with market capitalisations of below $100 million. The definition can vary between brokerages
and can change from time to time. It is in the field of Small Cap Stocks where large growth potential can often be found, as institutional investors often
do not research them and mutual funds often have restrictions prohibiting them from establishing meaningful positions in Small Caps.
Private equities are equity securities of companies that have not “gone public” (in other words, companies that have not listed their stock on a public
exchange). Private Equity can also be private placements of listed companies.
Listed companies often gain access to the private equity market in order to raise assets for the development of new products or technologies, to
increase their working capital, engage in acquisitions or maximise their capital structure.
Private Equity investments can offer potentially higher returns than the normal stock or bond investments. They provide the experienced investor with
the possibility of diversification because they have a relatively weak comparison to the traditional markets and are therefore not dependent on market
trends. However, the capital invested should normally be viewed on a long term basis, usually 1-5 years or beyond.
Micro cap refers to a stock with a market capitalisation of below $50 million, although definitions vary. This sector represents very high risk as the
stocks are usually in the earliest stages of development but as a result may offer tremendous long term potential through participating in these types of
Mid caps are normally stocks with market capitalisations of between $2 billion to $10 billion, although definitions may vary.
Large caps are stocks with market capitalisations of between $10 billion and $200 billion, although definitions vary. These are amongst the largest of
stocks trading on the markets and can offer excellent dividend income. However, when considering growth on capital, as these are the behemoths of
the stock markets it is worth remembering the maxim that “elephants don’t gallop”.
Usually a source of money for start up companies. This is typically raised by venture capital firms who invest in private companies that need capital to
develop and market their products. A venture capital funding arrangement will often entail relinquishing some level of ownership and control of the
business by the current owners. So normally, investors look for more than a mere capital investment.
This type of Private Equity financing provides growth capital for medium-sized companies. These companies usually have an established market
position, a good market capitalisation and usually generate sales of several million US Dollars. They are profitable or about to be profitable. Here,
Private Equity capital is used to finance either additional expansion or acquisitions, or to allow an adjustment in ownership structure. This is one of
bhmarkets main operational activities and a vital market for bhmarkets’ clients.
This provides the investor with a stake in a company that is experiencing financial difficulties, in return for a capital injection. The objective is a planned
turnaround or the liquidation of undervalued parts of the assets. Investors usually follow a take-over strategy and seek some kind of control. They
might have an entrepreneurial interest or just the intention to liquidate parts of the company. This type of investment is normally only undertaken by the
more experienced investor.
The total value of a company’s issued shares, excluding any that have been repurchased by the company. Simply put, this is a comparative measure
of the company’s size obtained by multiplying the share price by the number of shares in issue.
Volatility describes the scale of movement in the price of a stock. The greater the volatility
(fluctuation), the more risky the investment. Normally, volatility depends on the size of the stock:
The smaller the company’s capitalization, the easier the price of the stock can be influenced, i.e. the bigger is the volatility. Small Caps, in other words,
are usually considered more volatile investments
than large caps.
Supply and demand determines the liquidity of the stock. In the Small Caps limited market, one can be much larger than the other resulting in fast
rising or falling prices or even the impossibility to sell the stock. Liquidity in simple words refers to how easily a share can be bought and sold on the
market in relation to the influence on its price. A share is liquid when there are enough shares in circulation to allow large transactions to be made
without a substantial change in the price (see volatility). The shares of a Small Cap company might not be liquid or freely tradable, there may be a
limited market in the company’s shares on a daily basis, there may be no shares available to buy and sometimes shares cannot be sold because a
buyer cannot be found. In addition, there may sometimes be a restriction in selling (see Restriction) or an obligation to hold on to the stock for a
predefined period of time. Information on the stock, may also be limited, which is where bhmarkets expertise is instrumental in providing the
much needed information.
Long only refers to an investment strategy which concentrates only on buying assets and holding them to make profits. A long only fund therefore does not use any derivatives, gearing or short selling tactics in an effort to enhance gains. Leverage generally refers to increases in market exposure achieved by direct or indirect borrowing. It therefore increases performance risk and volatility. bhmarkets exclusively recommends a long only strategy and strongly advises against any increases of risks for small cap investments.
The extent to which an investor or a company is using borrowed money. For companies, leverage is measured by the debt-to-equity ratio, which is
calculated by dividing the long-term debt by shareholders’ equity. The more long-term debt there is, the greater the financial leverage and the greater
the risk of the company failing. For investors, the term means the practice of investing with borrowed money to increase potential profit.
The most common usage relates to the use of pre-defined contracts relating to the right to buy or sell an underlying security rather than to the security
itself i.e. they are “derived” from the security rather than being the security itself.
The sale of a stock which the seller does not own. This is a speculative practice done in the belief that the price of a stock is going to fall and the seller will then be able to cover the sale by buying the stock back at a lower price. Any profit would be the difference between the initial selling price and the subsequent purchase price. It is illegal for a seller not to declare a short sale at the time of
placing the order.
A standard against which a specific strategy is measured.
Example: A long only blue chip investor can compare his performance with the Dow Jones index and see whether his choice was better than the performance of the 30 biggest US stocks.
Evaluating the performance history of stock is often problematic owing to the difficulty in setting an
appropriate benchmark. This is important for risk appraisal when evaluating the assessment of manager / advisor skill.
The London Stock Exchange is a public limited company and is the primary stock exchange in the U.K. and the largest in Europe. The LSE is the most
international of all stock exchanges with companies from more than 50 countries being listed. Through its two primary markets – the Main Market and