A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

	Calendar spread		An option strategy which generally involves the purchase of a farther-term option (call or put) and the writing of an equal number of nearer-term options of the same type and strike price. Example: buying 1 XYZ May 60 call (far-term portion of the spread) and writing 1 XYZ March 60 call (near-term portion of the spread). Also known as horizontal spread or time spread.
	Call		An option contract that gives the holder the right to buy the underlying asset at a specified price for a certain, fixed period of time.
	Call loan		A loan which may be terminated or called at any time by the lender or borrower. Used to finance purchases of securities.
	Callable		Preferred shares or bonds that give the issuing corporation an option to repurchase, or "call" those securities at a stated price. These are also known as redeemable securities.
	Call		An option contract that gives the holder the right to buy the underlying asset at a specified price for a certain, fixed period of time.
	Canadian Depository for Securities (CDS)		CDS is the designated central clearing corporation for all equity trades in Canada.
	Canadian Investor Protection Fund (CIPF)		A fund set up by the exchanges and the Investment Dealers Association to protect investors from losses resulting from the bankruptcy of a member firm.
	Canadian Securities Administrators (CSA)		An association comprised of the administrators of each province. The CSA meets regularly to discuss regulatory issues of national importance as well as to coordinate the implementation of national policies.
	Canadian Securities Institute		Created in 1970, the Canadian Securities Institute (CSI) is a not-for-profit organization. The CSI has two goals: to enhance the knowledge of securities and financial industry professionals, and to promote knowledge and understanding of investing among Canadians. The CSI is sponsored by the Investment Dealers Association of Canada as well as Bourse de Montréal Inc., the Toronto Stock Exchange and the Canadian Venture Exchange.
	Capital		Generally, the money or property used in a business. The term is also used to apply to cash in reserve, savings, or other property of value.
	Capital cost allowance (CCA)		A taxation term, equivalent to depreciation, that makes allowance for the wearing away of a fixed asset.
	Capital loss		The loss resulting from a capital asset being sold for less than its purchase price.
	Capital stock		All ownership shares of a company, both common and preferred.
	Capitalization or capital structure		The total amount of all securities, including long-term debt, common and preferred stock, issued by a company.
	Capped-style option		A capped option is an over-the-counter traded option with an established profit cap or cap price. The cap price is equal to the option's strike price plus a cap interval for a call option or the strike price minus a cap interval for a put option. A capped option is automatically exercised when the underlying asset closes at or above (for a call) or at or below (for a put) the option's cap price.
	Cash equivalent		Assets that can be quickly converted to cash. These include receivables, Treasury bills, short-term commercial paper, and short-term municipal and corporate bonds and notes.
	Cash settlement		The process by which the terms of an option contract are fulfilled through the payment or receipt in dollars of the amount by which the option is in-the-money as opposed to delivering or receiving the underlying asset.
	Cash settlement amount		See Exercise settlement amount.
	Central bank		A body established by a national government to regulate currency and monetary policy on a national & international level. In Canada, it is the Bank of Canada and in the U.S., it is the Federal Reserve Board.
	Certificate		The document evidencing ownership of a bond, stock or other asset. See also Share certificate and Street certificate.
	Certificate of Deposit (CD		A fixed income debt asset issued by most chartered banks, usually in minimum denominations of $1000 with maturity terms of one to six years.
	Clearing		The process of settling the day's trading among member firms through a clearinghouse or clearing corporation.
	Clearinghouse or Clearing corporation		A corporation is responsible for settling trading accounts, clearing trades, collecting and maintaining margin monies, regulating delivery, and reporting trading data. Clearinghouses act as counterparties to all derivative instruments, acting as a buyer to every clearing member seller and a seller to every clearing member buyer. See also Canadian Derivatives Clearing Corporation (CDCC)..
	Closed-end fund		A fund company that issues a fixed number of shares. Its shares are not redeemable, but are bought and sold on stock exchanges or on the over-the-counter market.
	Class of options		All call and put options that cover the same underlying asset.
	Closing price		The final price of an asset at which the transaction was made. (See also Settlement price.)
	Closing transaction		A reduction or an elimination of an open position by the appropriate offsetting purchase or sale. A closing sale is made when an existing long option position is closed with a selling transaction. A closing purchase is made when an existing short position is closed by a purchase transaction. In both cases, this transaction will reduce the open interest for the specific derivative involved. Also known as a liquidating order.
	Collar		A protective strategy in which a written call and a long put are taken against a previously owned long stock position. The options may have the same strike price or different strike prices and the expiration months may or may not be the same. For example, if the investor previously purchased XYZ Corporation at $46 and it rose to $62, a "collar" involving the purchase of a May 60 put and the writing of a May 65 call could be established as a way of protecting some of the unrealized profit in the XYZ Corporation stock position. The reverse, a long call combined with a written put, might also be used if the investor has previously established a short stock position in XYZ Corporation. This strategy is also known as a fence.
	Collateral		Securities against which loans are made. If the value of the securities (relative to the loan) declines to an unacceptable level, this triggers a margin call, whereby the investor is asked to post additional collateral or the securities are sold to repay the loan.
	Collateral Trust Bond		A bond secured by stocks or bonds of companies controlled by the issuing company, or other securities, which are deposited with a trustee.
	Commercial paper		A negotiable corporate promissory note with a term of a few days to one year. It is generally not secured by company assets.
	Combination		An arrangement of options involving two long or two short positions with different expiration dates or strike prices.
	Commission		The fee charged by participating organizations to clients for trades done on their behalf.
	Commission des valeurs mobilières du Québec (CVMQ)		The CVMQ protects and fosters the growth of the financial capital of Quebecers within a stable and efficient financial system. Its mission is to ensure the smooth operation of the securities market, to protect investors against unfair, unethical, or fraudulent practices, and to regulate information that public companies send their asset holders and the general public. It also oversees the activities of market professionals, the associations they work with, and the agencies responsible for the smooth operation of markets such as Bourse de Montréal Inc.
	Commodity		A commodity could be an agricultural product such as canola or wheat, or a natural resource such as oil or gold. A commodity can be the basis for a futures contract.
	Common shares		Securities which represent part ownership in a company and generally carry voting privileges.
	Competitive tender		A distribution method where a prospective underwriter submits a sealed bid, containing price and terms, to an issuer who awards the contract to the bidder with the best price and terms. This method is used in particular by the Bank of Canada in distributing new debt issues.
	Compound Interest		Interest earned on interest.
	Compounding		The process by which income is earned on income that has previously been earned. The end value of the investment includes both the original amount invested and the reinvested income.
	Condor spread		A strategy involving four strike prices that has both limited risk and limited profit potential. A long call condor spread is established by buying one call at the lowest strike, writing one call at the second strike, writing another call at the third strike, and buying one call at the fourth (highest) strike. This spread is also referred to as a "flat-top butterfly."
	Conglomerate		A company directly or indirectly operating in a variety of industries, usually unrelated to each other.
	Consolidated financial statements		A combination of the financial statements of a parent company and its subsidiaries, presenting the financial position of the group as a whole.
	Consumer price index (CPI)		A statistical device that measures the change in the cost of living for consumers. It is used to illustrate the extent to which prices have risen, or the amount of inflation that has taken place.
	Contingency order		An order to execute a transaction involving one asset that depends on the price of another asset. An example might be: "Sell the XYZ May 60 call at 2, contingent upon XYZ stock being at or below $59 1/2."
	Continuous disclosure		An ongoing obligation on the part of a company to quickly inform the public of any material changes, both favourable and unfavourable.
	Contributed surplus		A component of shareholders' equity which originates from sources other than earnings, such as the initial sale of stock above par value.
	Conventional equity fund		See Equity Fund.
	Conversion		An investment strategy in which a long put and a short call with the same strike price and expiration date are combined with long stock to lock in a nearly riskless profit. For example, buying 100 shares of XYZ stock, writing 1 XYZ May 60 call, and buying 1 XYZ May 60 put at desirable prices. The process of executing these three-sided trades is sometimes called "conversion arbitrage." (See also Reversal/Reverse conversion.)
	Convertible		A feature of certain bonds, debentures and preferred shares. They may be exchanged by the holder usually for the common stock of the same company, in accordance with the terms of the conversion privilege.
	Corporation		A legal business entity created under federal or provincial statutes. Because the corporation is a separate entity from its owners, shareholders have no legal liability for its debts.
	Cost of carry		All expenses incurred in maintaining a security's position. Can include storage of commodities, interest expenses, insurance, etc.
	Coupon		A portion of a bond certificate entitling the holder to an interest payment of a specified amount when clipped and presented at a bank on or after its due date.
	Coupon rate		The annual interest rate of a bond.
	Covenant		A pledge in a bond indenture indicating the fulfilment of a promise or agreement by the company issuing the debt.
	Cover		To close out an open position. This term is used most frequently to describe the purchase of an option or stock to close out an existing short position for either a profit or loss.
	Covered call option writing		A strategy in which one sells call options while simultaneously owning an equivalent position in the underlying asset.
	Covered option		An open short option position that is fully offset by a corresponding stock or option position. That is, a covered call could be offset by long stock or a long call, while a covered put could be offset by a long put or a short stock position. This ensures that if the owner of the option exercises, the writer of the option will not have a problem fulfilling the delivery requirements. (See also Uncovered option writing.)
	Covered put/Covered cash-secured put		Cash secured put is an option stategy in which a put option is written against a sufficient amount of cash (or T-bills) to pay for the stock purchase if the short option is assigned.
	Covered straddle		An option strategy in which one call and one put with the same strike price and expiration date are written against 100 shares of the underlying stock. Example: writing 1 XYZ May 60 call and 1 XYZ May 60 put, and buying 100 shares of XYZ stock. In actuality, this is not a fully "covered" strategy because assignment on the short put would require purchase of additional stock.
	Credit		Money received in an account either from a deposit or a transaction that results in increasing the account's cash balance.
	Credit spread		A spread strategy that increases the account's cash balance when it is established. A bull spread with puts and a bear spread with calls are examples of credit spreads.
	Cross		A trade that occurs when two accounts within participating organizations wish to buy and sell the same security at an agreed price and volume. A cross can only occur at or between the current bid and ask for the security.
	Cum dividend/With dividend		The holder of shares purchased cum dividend is entitled to an upcoming already declared dividend. Opposite to this is ex-dividend.
	Cum rights/With rights		The holder of shares purchased cum rights is entitled to forthcoming, already declared rights. Opposite to this is Ex-rights.
	Cumulative preferred		A preferred stock having a provision that if one or more of its dividends are not paid, the unpaid dividends accumulate and must be paid before any dividends may be paid on the company's common shares.
	Current asset		An asset that could be converted into cash within 12 months.
	Current liability		A liability that has to be paid within 12 months.
	Current yield		The annual rate of return that an investor purchasing an asset at its market price would realize. This is the annual income from an asset divided by the current price of the asset. It is also known as the return on investment (ROI).
	Curvature		See Gamma.
	Custodian		A financial institution, usually a bank or trust company, that holds a mutual fund's securities and cash in safekeeping.
	Cyclical stock		A stock purchased from a company in an industry sector that is particularly sensitive to swings in economic conditions.