Stock Market Glossary

Account Period Settlement:
The settlement process where the buy and sale transactions done for a particular period (week or fortnight) are aggregated and only the net obligations are settled after the period is over. Indian securities market had weekly account period settlement before rolling settlement.

Arbitration:
Settlement of claims differences or disputes between member of a stock exchange and another member and between a member and his clients, sub-brokers, etc., through appointed arbitrators. It is a quasi-judicial process that is faster and an inexpensive way of resolving a dispute. The stock exchange facilitates the process of arbitration between the members and their clients in accordance with the bye-laws of the exchange.

Asset Management Company:
The company that handles day to day management and operations of a Mutual Fund.

Ask Price:
Lowest price at which a dealer is willing to sell a security, commodity .

Asset Allocation:
The process of dividing your funds among different classes on investment such stocks, bonds or real estate. You could further allocate your stock funds into value, growth, foreign, etc.

Auction:
An auction is a mechanism utilized by the stock exchange to fulfill its obligation to a counter party member when a member fails to deliver agreed securities or make the payment. Through auction, the stock exchange arranges to buy good securities and deliver them to the buying broker or arranges to realise the cash and pay it to the selling broker

Average Maturity:
The average time to maturity of securities held by a mutual fund. Changes in interest rates have greater impact on funds with longer average life