Ask price or Ask: the lowest price a seller of a stock is willing to accept for a share of that given stock.
Bid price or Bid: The highest price a buyer will pay for a security.
Brokerage house: A firm in the business of buying and selling securities for its own account or on behalf of its customers and which is appropriately licensed by the Ghana Stock Exchange and the Securities and Exchange Commission to do so.
Central Securities Depository (CSD): The CSD was set up with the support of the Bank of Ghana and the Ghana Stock Exchange as an automated securities depository and clearing and settlement system in Ghana. The Central Securities Depository maintains electronic securities accounts for investors, promoting investment activities in the country's financial market through the elimination of risks such as forfeiture, theft, mutilation etc that are associated with the issuance of paper based securities.
Common Stock: The common shares usually entitle the shareholders to vote at shareholders’ meetings. The common shares have a discretionary dividend.
Dividend: A portion of a company's profit paid to common and preferred shareholders.
Dividend yield: A measure of income on an equity investment represented by annual dividends divided by current stock price. A stock selling for $20 a share with an annual dividend of $1 a share yields the investor 5%.
Equity: Ownership interest in a firm.
Exchange: A marketplace in which shares, bonds, commodities and other securities are traded.
Fixed Income: Assets that pay a fixed amount per unit or have interest rates attached to them, such as bonds and bills.
Ghana Stock Exchange: The Ghana Stock Exchange (GSE) is the principal stock exchange of Ghana where shares in listed companies are traded by Authorised Dealing Officers (ADOs). Trading on the Ghana Stock Exchange takes place every working day of the week from 10.00am to 3.00pm. Trading is open to the general public.
Good ‘Til Cancelled (GTC): An order that an investor may place to buy or sell a security that remains active until either the order is filled or the investor cancels it. Brokerages will typically limit the maximum time you can keep a GTC order open (active), after which it expires.
Initial Public Offering (IPO): offering of securities of a company or a similar corporation to the public for the first time, after which the securities are listed on an exchange for trading.
Investment: Generally, every activity that is done today but which yields profit at a later date can be described as an investment. Investment involves postponing your consumption today in order to put your savings to work.
Investor: An investor is anyone who decides to put part of his/her funds in an investment for future benefit.
Limit Order: A limit order is a type of order to purchase or sell a security at a specified price or better.
Listed Company: A company is said to be listed when its securities are approved to be bought and sold by investors on the Stock Exchange. There are certain requirements that a company must meet in order to qualify for listing on the Exchange and maintain this status over time. These requirements are stipulated in the GSE Rules Book.
Market Price: The last reported price at which a security was traded on an exchange.
Odd-lot: A trading order for less than 100 shares of stock.
Over the counter (OTC): A decentralized market (as opposed to an exchange market) which is not located in any particular place. The market is for securities not listed on a stock or derivatives exchange.
Preferred Stock: Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders.
Primary Market: The primary market is where securities are created. In the primary market, institutions sell new stocks and bonds to the public for the first time, such as with an initial public offering (IPO).
Regulator: A body or organisation that sets rules, supervises and measures compliance in an industry.
Risk: Degree of uncertainty of return on an asset.
Round-lot: A trading order typically of 100 shares of a stock or some multiple of 100.
Secondary Market: The secondary market is where investors buy and sell existing securities they already own.
Securities and Exchange Commission (SEC): The Securities and Exchange Commission is established by the Securities Industry Act, 2016 (Act 929) (‘the Act’) with the object to regulate and promote the growth and development of an efficient, fair and transparent securities market in which investors and the integrity of the market are protected.
Security: Piece of paper that proves ownership of stocks, bonds, and other investments.
Settlement: When payment is made for a trade and the securities must be delivered to the buyer.
Stockbroker: A stockbroker is a professional who acts as the intermediary between investors who wish to buy shares/bonds and those investors who wish to sell securities. The stockbroker therefore eliminates the need for investors to search for trading partners. The stockbroker also gives advice to investors about which securities to buy and sell. Stockbrokers play a vital role in our market because all investment on the Ghana Stock Exchange can only be done through a stockbroker. To qualify as a broker, a person must among other things complete the Securities Courses offered by the Ghana Stock Exchange, pass the relevant examinations in them, be in the employment of a brokerage company for at least six months and also be licensed also by the Securities & Exchange Commission.
Ticker: An abbreviation assigned to a security for trading purposes (ex: MTNGH or GCB)
Trade: A transaction involving one party buying a security from another party. Settlement occurs 1-5 business days later depending on the security and the rules of the exchange.