Glossary

D

• Delivery month Specified month within which delivery may be made under the terms of a futures contract.
• Delivery notice A notice of a clearing member's intention to deliver a stated quantity of a commodity in settlement of a short futures position.
• Delta The rate of change in option premium for a given change in the price of the underlying.
• Delta Neutral A position where the sum of the deltas of the component legs adds up to 0.
• Dematerialization It is the process of converting the physical shares into Electronic form. SEBI had made it mandatory to get the shares dematerialized. In this process the investor opens an account with a Depository Participant (DP) and the holdings of the investor is shown in this account.  
• Depository It is an institution, which keeps the shares in, demat (Electronic) form on behalf of the investors, where investor is the beneficial owner of the stocks held.  
• Depository Participant An authorized entity that is involved in dematerialization of shares and maintaining demat accounts of the investors.  
• Depreciation The value of assets keeps on decreasing with the passage of time and usage. That decrease in value is termed as depreciation. Every business is required to write off the depreciation over time for tax purposes.
• Differential pricing Pricing of an issue where one category is offered shares at a price different from the other category is called differential pricing. In DIP Guidelines differential pricing is allowed only if the securities to applicants in the firm allotment category is at a price higher than the price at which the net offer to the public is made . The net offer to the public means the offer made to the Indian public and does not include firm allotments or reservations or promoters’ contributions.  
• Direct Public Offer This is an offering in which a company sell its shares directly to the public without the help of the underwriter. Liquidity of this offering is very limited.