Banking and Stock Glossary
See Securities Acquisition and Takeover Act.
Abbreviation for transaction number.
TARGET (Trans-European Automated Real-time Gross settlement Express Transfer system) is an interbank transfer system linking national real-time gross settlement systems in Europe. TARGET was developed by European central banks primarily to implement the European Central Bank's monetary policy. The advantage of TARGET is its ability to process payments quickly; 98% of payments are executed within five minutes.
Interim profits are payments included in the purchase or redemption price for received or accrued interest not distributed or reinvested by the fund and which, accordingly, are not taxable for investors (comparable, for instance, to accrued interest from fixed-income securities). Interim profits are determined in each unit value calculation and published on a daily valuation basis. Domestic taxpayers are liable to pay income and investment income tax on interest and interest claims generated by investment assets when they redeem or sell their fund shares. The tax withholding is an advance income tax payment and must be entered in the appropriate tax form (in Germany, the KAP form). Tax is not withheld if a tax exemption application or a certificate of non-assessment is submitted.
Maximum total amount of tax-free investment income.
Index reflecting the performance of the 30 largest technology shares of the Prime Standard ranking below the DAX® shares. The composition of the index is generally reviewed on a semiannual basis and adjusted in March and September. Criteria for weighting the shares in the TecDAX® are: trading volume and market capitalization in terms of free float, as well as the company's position in the respective sector.
Technical analysis helps investors predict the future price development of a stock based on historical price data such as price and trading volume. Instruments used in technical analysis include performance ratios such as market capitalization and volatility, as well as the beta factor and correlation coefficient of a stock with respect to a benchmark index. Chart analysis is the most important component of technical analysis.
Off-exchange interbank trading by telephone in securities, currencies or precious metals. OTC trading is goverened by securities trading rules, but not statutory regulatory and supervisory rules. Participants follow generally accepted trade practices.
Dynamic indicator of the decline in the time value of a warrant. The value of theta reflects the percentage by which the warrant loses in value if the share price remains constant. The value of theta increases as the time to expiration approaches.
Smallest possible change in price according to the contract or trading conditions in transactions on futures or cash markets.
Marketable assets that must fulfil certain uniform eligibility criteria specified by the ECB for the entire euro area to be used as collateral for bank's credit transactions with the central banks of the Eurosystem. These criteria include denomination in euros, issued (or guaranteed) by entities located within the euro area and deposited/registered with one of the national central banks or central securities depositories located within the euro area.
Marketable or non-marketable asset that can be used as collateral for banks' credit transactions with the central banks of the Eurosystem for which the eligibility criteria are established by the national central banks, subject to ECB approval.
Deposits invested at banks with a fixed maturity (fixed-term deposit) or termination. Time deposits not withdrawn at the end of maturity are renewed as a demand deposit or at the current interest rate.
Value of an option prior to expiration determined above all by an estimate of the price performance of the underlying instrument. Time value is calcuated from the difference between the option price and its intrinsic value. Determinants in calculating the time value are the remaining time to expiration of the option and the expected volatility of the underlying instrument. The shorter the time to expiration and the lower the volatility, the lower the time value.
An approach, based on an assessment of the overall economic development and the respective sector, to predict the development of an individual company and its share price. Opposite: bottom-up approach.
The TPF (Ticker Plant Frankfurt) information distribution system developed by Deutsche Börse AG provides real-time share price information from all German stock exchanges as well as the Xetra and Eurex trading platforms.
Rapid buying and selling of securities aimed at capitalizing on short-term price fluctuations.
Traditional type of exchange where market participants are physically present at specific hours in one place (trading room) to personally conduct proprietary trading or customers' orders (open outcry trading). Open outcry trading is continually losing its importance in comparison to computerized trading. Electronic trading systems, such as Xetra, are crowding out traditional open outcry trading. More than 90 precent of the trading in German shares is carried out using Xetra.
Traditional exchange trading in which lead brokers, independent brokers and traders are physically present on the trading floor during the exchange's business hours. A characteristic feature of a trading floor system is the personal communication between market participants. Floor trading is increasingly being replaced by computerized exchanges using electronic trading systems, e.g. Xetra and EUREX (fully electronic trading). The Frankfurt Stock Exchange is the most important trading floor system in Germany.
A commission agent, broker, forwarding agent or trustee instructed to execute a transaction for a client can act as contracting party (§§ 400pp. German Commercial Code). For example, brokers typically trade for own account for which they must comply with rules on insider trading.
Balance of revenue and losses, established on the basis of a bank's profit and loss account, from trading in securities, derivatives, foreign exchange, precious metals and other trading business.
Part of a securities issue if the issue is not carried out in one stage but in several partial amounts with different maturities, in different currencies and, if applicable, at different interest rates.
Customers participating in online banking offerings receive, usually by mail, a list of transaction numbers (TANs). In addition to the PIN, a TAN must be entered for each transaction. If the bank receives an order with the correct PIN and TAN, it will assume that the order was sent by the customer. The bank interprets the TAN as a quasi-signature. Used TANs expire.
Transfer of a sum of money from one account to another on the basis of a corresponding instruction by the payer (remitter) to his bank (agency agreement). The most important form of cashless payment besides cheques and direct debits, as well as bank and credit cards.
Travel currency designed to guard against or prevent misuse of foreign currency. Travellers cheques are denominated in specific amounts in EUR, USD or other foreign currency and are issued by individual banks. Travellers cheques are signed by the holder at the time of purchase. They can be cashed at some banks at home and abroad or used to make direct purchases at stores that accept them. Travellers cheques must be signed a second time when they are cashed. If a holder's travellers cheques are lost or stolen before they have been cashed, they will be replaced upon presentation of the sales receipt if the conditions for reimbursement specified in the Terms of Sale are met. However, due to the global acceptance of debit and credit cards and the increased availability of ATMs, travellers cheques are becoming increasingly less important. The number of locations that sell or accept travellers cheques is steadily declining.
Treasury is the department of a company that oversees the management and investment of existing and accruing funds as well as the management of financial risks. This includes all aspects of liquidity, interest rate and currency management, as well as a comprehensive capital structure management in order to minimize the cost of capital and optimize the allocation of capital. At the government level, the Treasury is the economics and finance ministry in the United Kingdom, the U.S. Department of the Treasury the U.S. finance ministry.
Discount notes, i.e., without interest coupon, issued by the German federal government with terms of up to two years. Interest is paid upon repayment and is calculated from the difference between the face value (repayment amount) and the lower purchase price. Treasury discount paper is targeted mainly at institutional investors, although anyone is entitled to purchase these securities. They are issued as one-off issues in the auction procedure and have minimum denominations of 1 million euros. Treasury discount paper is not exchange traded.
Treasury notes are short and medium-term bonds issued by the German federal government, the federal states and/or special assets of the federal government. Treasury discount paper is sold at a discount on the face value. Fixed-income bonds are also referred to as public notes.
Accounts on which assets are credited of which the acocunt holder is not the beneficial owner. He manages the account in his name but for the account of a third party. So-called escrow accounts are of special significance due to the fact that these accounts can only be opened for certain professional groups (e.g. notaries).
Situation where a company, or its stock, shows a significant trend reversal.
| Copyright © Deutsche Bank AG |