Par

A Bond usually expresses the obligation of which it forms the evidence, as £100; and this amount, or the "face" or "nominal "value, as it sometimes is named, is par.1 If a purchaser give £100 for the £100 stated in the bond, he is said to purchase, and the security to stand, at par. Upon a share of £10 the whole of the £10 have been paid up in cash, or perhaps £9 have been called up and there remains a liability of £1, which the holder may at some time be required to discharge to the company which issued it, or lose his interest in the undertaking. In the former case, if the investor purchase a share by giving £10, and in the latter if he buy it for £9, his purchase has been effected at par.

Premium

The security or share may stand at a premium.2 If the bond be bought for £101, its price is at a premium of 1 per cent; the purchaser exchanges £101 for the right to receive £100

1 Latin par, or equal.

2 Premium: Latin proe, before, and enure, to take; what one takes first or for oneself; hence profit derived from booty; then generally advantage or profit. The seller has obtained a benefit beyond the nominal amount of the bond or share.

only when the bond is redeemed l or paid off. So for the share: if he purchase it at something in excess of the amount which is actually paid up upon it, the transaction has been completed at a premium.

Discount

The security or share may stand at a discount.

If the price of the bond for £100 be £95 it is said to stand at a discount2 of 5 per cent, that is, 5 per cent below its expressed and redeemable amount.

For the payment of £95 the buyer secures the right to £100 on redemption.

Gilt-edged.

The silly expression "gilt-edged" is derived from the practice of gilding the leaves or edges of paper and books and thus rendering them attractive and not readily retaining dust: hence applied to securities of the soundest description, such as Government Stocks and the Debenture Stocks of the leading railways.

Boom

The word Boom3 has been imported from the United States and indicates a state of numerous transactions with an appreciably augmented price.

Slump

Of the opposite character is the term Slump4 which signifies a sudden, heavy fall in prices either of one stock or many stocks, or the whole of them.

1 Redeemed: Latin re, back, and emere, to buy; the company, corporation or government buys back the debt it owes by paying it off.

2 Old French des (equal to the Latin dis), apart, away, and compter, to count, reckon: to count away from, to make a deduction.

3 Boom means to buzz, from the Middle English bommen, to hum, and aptly applies to the excited noises in the House which accompany a prospering market.

4 S1ump: perhaps confusedly connected with "slip" (in the Anglo-Saxon form), to sink or fall suddenly into water or mud: the word is onomatopoeic in its origin, or an imitation of the physical sound.

Middle Price

The middle price of a security is the value midway between the quotation: if the quotation be 67 to 69, the middle price is 68.

"Harden" "Easier."

Prices harden when they tend to advance upward: they are easier when a somewhat lower quotation can be obtained than existed before.

Margin

A margin1 is the excess of the value of a security, accepted as a pledge, beyond the loan which has been granted. Thus if a loan of £100 be made, and a security worth £110 is mortgaged against it, the difference of £10 is the margin required by the lender as a protection against the value of the security descending below the amount of the advance.

Tape Prices

The official list of the Stock Exchange contains the record of some of the prices at which bargains have been completed. Brokers issue lists of their own to their clients, with similar information; and a third mode of imparting information about prices from the Exchange, in a form which is much fuller and more expeditious than the two former methods, is that of the medium of the tape machine of the Exchange Telegraph. As each transaction is effected within the House the price is indicated on outwinding slips of paper tape.

1 Margin, from the Latin margo, a brink or border: like the path by the side of a stream, which separates the stream from the walker.