Glossary

S

• Settlement Day It is the day on which purchased securities are due for delivery to the buyer and the buyer is required to pay necessary consideration for the same.
• Settlement guarantee Settlement guarantee means that the trade will be settled even if one of the parties to the trade i.e. the buyer or the seller defaults. InIndia , the clearing corporation provides Settlement guarantee for all trades held. This prevents a cascading effect in the market due to the default of one party.  
• Settlement price The price used for daily revaluation of open positions.
• Settlement price  In futures markets, the price that is set by the exchange at the end of each trading day and which is used by the clearing house to market open positions and assess margin calls.
• Share certificate This is a legal document that represents the ownership of a shareholder in the company. In today's advanced stage the concept of physical share is replaced by the dematerialization of securities.
• Share swap  This refers to a financial arrangement by which shares of one company are swapped for another in a specified ratio known as swap ratio.
• Short An open "sold" position.
• Short position Position resulting from a short selling strategy.
• Short selling  A strategy in which a speculator sells a commodity that he or she does not own in order to profit from a falling market.  The speculator will borrow the commodity from a third party and then immediately sell on to the buyer .
• Short selling When an investor anticipates that the prices of a particular share will fall, then he may sell that share without even owning with an intention of purchasing the shares at lower price at any time in future. This strategy is known as short selling.