The absolute difference states the change of the current share price on that
of the previous trading day. It is also possible to determine the absolute
difference between the current price and the initial buying price, whereby a
positive value indicates a gain and a negative value shows a loss. On the
Frankfurt Stock Exchange, the absolute difference is stated in euros.
In Germany, the accrued interest is compounded.
This term is used primarily in connection with a merger that takes place
between two listed companies via the exchange of their registered shares.
Actively managed fund
Actively managed funds are offered by investment companies. Some of them are
traded in Deutsche Börse's Xetra® Active Funds segment. They are similar to
individual stocks in that their shares can be bought or sold on the exchange
at any time. Unlike typical mutual funds, Xetra Active Funds funds do not
carry a load. Because the assets held by these funds are bought and sold as
market conditions change, an actively managed fund can outperform a benchmark
index. As a rule, dividends are reinvested.
The additional margin covers the losses that would result from the worst-possible price development (worst-case loss) during the following 24-hour period. The margin is paid to the central clearinghouse by the contract holder.
Admission of securities to the Regulated Market
In order to have a security admitted to the Regulated Market, the issuer,
together with an underwriting bank (a bank or investment company), must first
submit an application and a listing prospectus to the Admissions Office. These
documents provide information on the type and volume of the security to be
admitted. The issuer and the bank are responsible for the accuracy of the
Admission to the exchange
The admissions application is to be posted in the stock exchange building and
published in the list of quotations (Kursblatt), in the journal for statutory
stock market announcements (Börsenpflichtblatt) and in the Federal Official
Gazette (Bundesanzeiger). The listing prospectus is published by the issuer in
the journal for statutory stock market announcements. As soon as the company
is admitted to the Regulated Market, the prospectus is to be made available
free of charge at the underwriting banks and the Admissions Office named
Pursuant to the Stock Exchange Listing Act (Börsenzulassungsverordnung) the
most important conditions for admissions and follow-up requirements are:
The issuing company must have existed for at least three years.
The expected issuing value must be at least €1.25 million.
For shares, the total par value must be at least €250,000.
At least one interim report on the financial situation and general business
developments must be published during the financial year.
Information that is relevant to the company must be published forthwith.
At FWB® Frankfurter Wertpapierbörse (Frankfurt Stock Exchange) the Admissions
Office is responsible for deciding whether to admit securities to the Official
Market; the admission of securities to the Regulated Market is determined by
the Admissions Committee. Each market segment has its own admissions
requirements. However, all issuers must publish an offering prospectus
containing the fundamental data required for an evaluation of the security.
Admission to General Standard does not require any further action on the
issuers' part. However, issuers have to apply for admission to Prime Standard;
a listing in this segment is subject to the fulfillment of high international
Before a security is admitted to the Official Market, the Admissions Office
examines the listing prospectus to determine whether the issuer and the
sponsoring bank have met admission and disclosure requirements.
AIBD return (ISMA return)
The Admissions Office comprises at least 20, but no more than 24, members who
are elected by the Exchange Council. Of these, not more than half may be
professionally involved in exchange trading. Members are elected for three
years, and can be re-elected. The Admissions Office appoints one chairman and
up to two deputy chairmen.
The Admissions Office has a quorum when at least five voting members have cast
their vote, either verbally or in writing. A simple majority is required to
pass a resolution. In case of a tie, the chairman or the member in charge of
the session casts the deciding vote. Any member who owns shares in the company
seeking admission is not eligible to vote.
Important regulations on the Admissions Office are contained in the Stock
Exchange Act (Börsengesetz), section 4 para. 3 and section 37, as well as in
the Stock Exchange Rules and Regulations.
The AIBD return determines the real interest return on bonds by compounding
interest on a daily basis. Irrespective of the time at which the interest is
credited, the interest that has accrued on a given day is added to the
principal, itself bearing interest the following day.
In Germany, regulations on the real interest return are regulated in the
Charges Disclosure Rule (Preisangabeverordnung).
AIBD stands for "Association of International Bond Dealers", the former name
of ISMA (International Securities Market Association).
At the end of the subscription period, the demand for a new issue can exceed
the number of shares being issued. In that case, the underwriting bank allots
the securities with the approval of the issuer, either by lottery or on the
basis of a formula. An allotment formula usually takes into account the
issuer's preferred target groups.
American depositary receipt (ADR)
On NYSE and NASDAQ, investors trade ADRs instead of the shares they represent.
American depositary share (ADS)
Depositary shares by means of which the registered shares of foreign companies can be traded on the US exchanges NYSE and NASDAQ
Antonym: European-style option
Annual General Meeting
The Annual General Meeting (AGM) convenes once a year. The date is announced
by the company's executive board, with at least one month's notice. At the
AGM, the Executive Board informs shareholders on the company's current
economic and financial situation and its projected future development. Other
typical items on the agenda of the AGM are to grant discharge to the executive
and supervisory boards, to vote on the appropriation of profits, to appoint an
auditor, and to discuss and vote on important corporate policy issues
(takeovers, capital increases, etc.). Shareholders can exercise their right to
vote at the AGM.
In urgent cases, an extraordinary General Meeting can be summoned.
If the price of a given security varies from one stock exchange to another, market participants will exploit these differences by simultaneously purchasing the security at the exchange where it is cheaper (Exchange A) and selling it on the exchange where it is more expensive (Exchange B). The price at Exchange A will rise owing to the increased demand for the security, while at Exchange B, the price will drop as a result of the increase in supply. Thus, arbitrage enhances the efficiency of the market by equalizing the prices of the same security at different exchanges.
In so-called cash-futures arbitrage, participants exploit the discrepancy between the prices of a security in the cash market and in the futures market. For example, an arbitrageur will buy a stock option that expires the same day in the hope of selling it on the cash market at a price which is higher than the exercise price.
A market participant publishes an ask price with an entry in the order book on an electronic trading system; in rare cases this is done orally on the trading floor. For investment and leverage products, this price is set by the issuer.
Market participants announce ask prices either by open outcry on the trading floor, or by entering them into the open order book of an electronic trading system.
A company can generate liquid funds by selling a portion of its accounts
receivable to a subsidiary, which then finances its own operations through the
issue of asset-backed loans. Such subsidiaries are established expressly for
the purpose of implementing the asset-backed securities (ABS) funding model.
ABS can also be issued on receivables that are paid in installments, e. g.
receivables from leasing agreements, long-term car loans, collateralized
consumer loans, and similar receivables. ABSs are paid back as soon as the
borrowers settle their debts.
Asterisk * (price addendum)
Financing with ABSs enables companies to utilize a wider range of accounting
procedures, and helps reduce their financing costs.
A price addendum is a code that is added to the price in floor trading. It
states in what way the respective order situation is to be taken into account
as the price is fixed. This information is part of the tick data.
At the money
If this is the case, the intrinsic value of the warrant equals zero.
In an auction, all buy and sell orders are pooled and matched in an order
book; the auction price is determined according to the principle of highest
Automatic exercise (warrants)
The auction system enables participants with the highest bid prices (the
demand side of the market) and the lowest ask prices (the supply side of the
market) to execute their orders. Because the price determination procedure
does not require a trading intermediary, it can also be performed by the
electronic trading system. During floor trading at FWB® Frankfurter
Wertpapierbörse (Frankfurt Stock Exchange), the Xontro® system assists the
lead broker in determining prices on the basis of the auction principle.
The Xetra® electronic trading system also determines prices using the auction
system. The market model on which the system is based provides for a number of
regular auctions: the opening auction, the closing auction and, depending on
the stock, several intra-day auctions. Each auction consists of three phases:
Outcry phase: in this phase, participants can enter orders and quotes, or
delete previous entries. In stock trading, the order book is sometimes closed,
whereas in bond trading it is always open (i.e. it can be examined by anyone
who wishes to do so).
Price determination phase: the auction price is determined in keeping with the
principle of highest volume transacted, on the basis of the order book
situation at the close of acceptance.
Market clearing phase: after the auction price has been determined, there may
be an overhang of orders, either with a limit at the auction price or with no
limit; in this case, the orders are offered to the market at the auction price.
Antonym: Market-maker principle
Automatic exercise is provided for in the issuing terms and conditions of the