Bonus Shares

Basis:
The difference between current price and future price of an underlying security.

Bid and Ask:
Bid is the price of a share a prospective buyer is prepared to pay for particular scrip. Ask is the price at which a share is offered for sale by the seller.

Bid Ask Spread:
Difference between best bid and best ask price available for a particular security in a market.

Bonus Shares:
Shares allotted to the existing shareholders free of cost by capitalizing the free reserves of a company.

Book Closure:
The periodic closure of register of members to determine the entitlement of corporate actions such as bonus, dividend, interests etc.

Brokerage:
Brokerage is the commission charged by a broker for purchase/sale transaction through him. The maximum brokerage chargeable is at present 2.5% of the trade value. The actual brokerage charged however is far less.

Call Option:
An agreement which gives the owner the right but not the obligation to buy a particular security by a specified date at a predetermined price.

Circuit breakers/filters:
It is a mechanism by which stock exchange temporarily suspends the trading in a security when its prices are volatile and tend to breach the price band.

Clearing:
Clearing refers to the process by which all transactions between members are settled through multilateral netting.

Close Out:
The process whereby the exchange settles the obligation due to a broker and his clients in the event of default by the counterparty broker.

Company objection:
An investor sends the certificate along with the transfer deed to the company for transfer. In certain cases the registration is rejected because of signature difference, or if the shares are fake, forged or stolen etc. In such cases the company returns the shares along with a letter which is termed as a company objection.

Contract Note:
The official and legal document issued by a stock broker to his clients evidencing buy/sale of securities at the stated price and time of the day.

Cum-bonus:
The share is described as cum-bonus when a purchaser is entitled to receive the current bonus.

Cum-rights:
The share is described as cum-rights when a purchaser is entitled to receive the current rights.