In options trading, a call is the right to buy a specified number of shares at a set price by a specific date. Investors buy call options when they think the price of a stock is going up and want to lock in the strike price.

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.

The total of financial assets that an investor has invested insecurities, real estate, and other fixed assets, as well as cash.

A measure of the sales and purchases of assets, such as direct investment (e.g., the purchase of a factory) or portfolio investment (e.g., stocks and bonds) between Canada and the rest of the world. If Canada has a current account deficit, it must be financed by either the sale of Canadian assets to foreigners or by borrowing from foreigners, typically in the form of government bonds. In principle, the current account and capital account should balance each other out -- that is, to the extent that we buy more goods, services and the like than we sell (i.e., have a current account deficit), we have to sell our assets, or go into debt, to finance our spending (i.e., have a capital account surplus). In theory, therefore, the balance of payments is always zero. Canada typically runs a current account deficit. This requires a capital inflow, which increases our overall foreign indebtedness.

Tangible items used in the operation of a business but not consumed in the course of those operations. These are also known as "fixed assets." Some examples of capital assets are the company's buildings or the machinery with which a product is made. For tax purposes, capital assets may also include the security investments ("securities") of a business.

A profit made on the sale of an asset when the market price rises above the purchase price. Profit that is made from the sale of real estate, stocks, bonds, or other capital assets.

An exemption from tax arising from a capital gain on qualified small business and farm property as defined by Revenue Canada.

Loss that is incurred from the sale of capital assets at a price below the purchase price.

Securities or physical property such as real estate, that may increase or decrease in value and on which a gain or loss may be realized on deposition.

All ownership shares of a company, both common and preferred.

The total amount of all securities, including long-term debt, common and preferred stock, issued by a company.

In an investment portfolio, cash means relatively stable investments that can be easily changed into currency, such as checking accounts, Treasury bills, money market accounts or short-term bond funds.

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.

Income from all sources less expenses over a stated period of time. A shortfall or surplus is determined.

The amount of cash a person may obtain by voluntarily surrendering a life insurance policy.

Basic insurance protection combined with tax-deferred investing. A portion of your annual premium pays for insurance, while the rest goes into the policy's investment or cash-value account. Your investment earnings accumulate free of taxes until you withdraw them, but it often takes 10 years or more for the tax-deferral benefits to overcome the drag of the commissions charged by insurers.

A rotating pump, commonly used for large-volume oil and natural gas pipelines, that takes in fluids near the centre and accelerates them as they move to the outlet on the outer rim

A document providing evidence of ownership of a security such as a stock or bond.

A time deposit with a specified maturity date.

To confirm formally. To guarantee (on a cheque) that there are sufficient funds on deposit for payment.

A designation conferred by the Canadian Securities Institute in recognition of the attainment of certain standards of education and proficiency in investments. The CIM program is broken into two parts: CIM1 and CIM2. Each part consists of two three-hour exams. CIM1 is being replaced with the Professional Financial Planning course, which consists of two three-hour exams and a case study.

(1) For an option or futures contract, the difference between the current price and the previous day's settlement price. (2) For an index or average, the difference between the current value and the previous day's market close. (3) For a stock or bond quote, the difference between the current price and the last trade of the previous day.

The oldest commodity exchange in the United States; established in 1886. The exchange lists agricultural commodity futures such as corn, oats and soybeans, in addition to more recent innovations as GNMA mortgages and the Nasdaq 100 Index.

Generally, a fund which tries to mimic the performance and/or the strategy of a successful, existing fund. They can also be funds trading in derivatives of successful foreign stocks, thus simulating their performance, while remaining RRSP-eligible. Closed Mortgage: A convertible mortgage where the lending rate is fixed for a set period of time, and there is no allowance to repay the loan in advance. Also known as a closed-end mortgage.

A fund company that issues a fixed number of shares. Its shares are not redeemable, but are bought and sold on stock exchanges or the over-the-counter market.

Expenses incurred when real estate is transferred from a seller to a buyer.

Natural gas trapped in coal seams

A document used to make minor changes to a will. Usually prepared through a lawyer. A codicil requires witnesses.

Assets pledged by a borrower as security for the repayment of a loan.

A negotiable corporate promissory note with a term of a few days to a year. It is generally not secured by company assets.

The broker's or agent's fee for buying or selling securities for a client. The fee is usually based on a percentage of the transaction's market value.

A product used for commerce that is traded on an organized exchange. 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.

The federal agency established by the Commodity Futures Trading Commission Act of 1974 to ensure the open and efficient operation of the futures markets. The five futures markets commissioners are appointed by the president (subject to Senate approval).

A class of stock that represents ownership or equity in a company. Common shares sometimes carry a voting privilege and entitles the holder to a share in the company's profits, usually issued in the form of dividends.

A security representing ownership of a corporation's assets. Voting rights are normally accorded to holders of common stock.

When a security is traded on more than one exchange, the price may vary among exchanges. The composite price includes all the prices for all transactions of the security on any exchanges where it is traded; as a result, you have a better idea of the security's true price.

Reinvesting interest as capital to earn additional capital.

Interest earned on the initial investment as well as in interest previously earned. Interest may be compounded daily, weekly, monthly, quarterly, semi-annually, or annually for compounding purposes.

A relatively stable and predictable investment that usually features a specific (or limited) gain or loss.

The term applied to debt incurred for consumable or depreciating assets that aren't considered investments. You should include credit card debt, store-financed consumer purchases, car loans, family loans that will be repaid, etc. Don't include routine bills paid monthly such as water, phone, and electricity, and don't include mortgages, home or business equity loans, home or business equity lines of credit, or stock margin accounts.

A statistical device that measures the increase in the cost of living for consumers. It is used sometimes to illustrate the extent that price sin general have risen or the amount of inflation that has taken place.

Taxes on consumption -- purchases of goods and services -- levied by both the federal and provincial governments. Federal consumption taxes consist mainly of GST and excise taxes on motor fuel, tobacco products and alcoholic beverages. Provincial consumption taxes consist mainly of retail sales taxes, and provincial taxes on motive fuel and tobacco products.

An arrangement whereby an investor contracts to purchase a given amount of a security by a certain date and agrees to make partial payments at specified intervals.

A condition attached to a security, such as a bond, debenture, or preferred share which may be exchanged by the owner, usually for the common stock of the same corporation, in accordance with the terms of the conversion privilege.

A mortgage that allows the borrower to switch from a short-term mortgage to a longer-term one.

Term life insurance which can be converted to any permanent or whole life policy without evidence of insurability subject to time limitations.

Changes in companies that affect their listings on stock changes. Examples of corporate actions are new issues, defunct issues, mergers and name changes.

Bonds issued by private corporations. They have a par value of $1,000 and are due all at once. They are traded on major exchanges.

Tax on corporate income in Canada. In addition, Canadian corporations pay a variety of taxes and other levies to the various levels of government in Canada. These include capital and insurance premium taxes; payroll levies (e.g., health taxes, Unemployment Insurance, Canada Pension Plan, Quebec Pension Plan, Workers' Compensation); property taxes; and indirect taxes, such as sales and excise taxes, levied on business inputs.

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.

The cost basis of an investment is how much you paid for it when you originally purchased it.

This amount represents the cost of buying raw materials and producing the goods that a company sells. It also includes the cost of the company's labour force. You can find this amount on a company's income statement.

The annual interest rate of a bond.

A measure that reflects both the variance (volatility) of a stock's returns and the tendency of those returns to move up or down at the same time relative to other stocks (their correlation). This is a way to see if two stocks tend to move up or down together and also see the size of those movements.

A pledge in a bond indenture indicating the fulfillment of a promise or agreement by the company issuing the debt. An example of a covenant may include the promise not to issue any more debt.

Funds advanced and/or available to be borrowed as required.

A rating assigned to an individual based on their credit history.

It means with a dividend or with rights. For instance, if you buy a stock cum dividend or cum rights, you receive forthcoming already-declared dividends or rights.

A tax record established to determine your annual allowance for property that does not physically exist, but has a lasting economic benefit. Some examples of this type of property are goodwill, franchises, and patents.

Production of oil or gas to date Curb: Temporary trading restrictions designed to reduce dramatic price movements.

A measure of the flow of goods, services and investment income between Canada and the rest of the world, including merchandise imports and exports, international service transactions, and interest and dividends payments or receipts. If, overall, a country receives more money from investments in and the sale of goods and services to the rest of the world than it pays out, it has a current account surplus. Typically, Canada has had a surplus in merchandise trade, but a larger deficit in service and investment transactions, resulting in an overall current account deficit. The deficit on investment transactions reflects the need to pay interest and dividends on the large foreign debt.

An asset that could be converted into cash within 12 months.

A liability that has to be paid within 12 months.

Simply, a company's current assets divided by its current liabilities. From this ratio, you can determine whether a company could pay off its debts with its current assets if it needed to.

The annual rate of return that an investor purchasing a security at its market price would realize. This is the annual income from a security divided by the current price of the security. It is also known as the return on investment.

A financial institution, usually a bank or trust company, that holds a mutual fund's securities and cash in safekeeping.

A stock of a company in an industry that is particularly sensitive to swings in economic conditions.

Occurs when the economy enters a temporary downturn. The most recognizable form of cyclical unemployment occurs when workers are temporarily laid off. Structural unemployment occurs when workers are unable to fill available jobs because they lack the skills, do not live where jobs are available, or are unwilling to work at the wage rate offered in the market.