Adusted Trading Price

Market value of a share adjusted by all the earnings that affect its value such as dividends, deployments, groupings, or bonuses. Only the series of adjusted quotations make it possible to analyze the evolution of a share‘s price over time.


American Depositary Receipts – certificates of stocks from non-American companies issued and traded in US capital market. ADR was created with the objective of giving more access to the US capital market for foreign companies. There are three levels of ADR, each one with different demands of transparency and conformity to North American standards. ADR – Level I is the one with the lowest demands and is traded on the OTC (Over-the-Counter) market. ADR – Level II is traded on the US stock exchange. The level of demands and of transparency is greater than ADR – Level I. It should be pointed out that for these first two levels, new stocks are not issued. ADR – Level III has the same level of demands as ADR – Level II, but they must be issued with new shares and the consequent capital funding.

ADR – Level I

The setting up of an ADR Level I program is considered as the first step for entering the capital market in the United States.

ADR Ratio

Expresses the relation between one ADR and the stocks in the country of origin.


Brazilian Association of Stock Market Analysts and Investment Professionals.


1) Operation in which an investor makes profits without risk by making simultaneous transactions in two or more markets.
2) A system that allows physical and financial settlements of inter-market operations so that the same investor, trading on the cash market, can buy from one stock exchange and sell the same asset on another one in equal quantities, as long as there is an agreement made between the two stock exchanges.

Authorized capital

Statutory limit established by means of a general shareholders‘ meeting that allows the board of directors to approve a company‘s increase in capital.

Average quote

Average price of an asset during a day of trading.

Average return

The average of the profits associated with a security over a period of time.

Average Toll

Average toll is calculated by dividing consolidated toll revenues by the total vehicle equivalent number of each concessionaire and all concessionaires.


BACEN – Brazilian Central Bank

Central Bank of Brazil is the federal body that executes the government‘s monetary policies. Administers the country‘s international reserves and oversees the National Financial System. Its main legal responsibilities are as follows:

a) issue paper money and coins.
b) exercise the control over credit in all of its forms.
c) control foreign capital.
d) be the depository of the official reserves of gold and foreign currency.
e) inspect the financial institutions and apply any penalties when applicable.
f) carry out buying and selling operations of federal government securities as an instrument of monetary policy.
g) promote the placement of internal and external loans as the agent of the Federal Government.
h) exercise continual vigilance over financial and stock markets and the companies that directly or indirectly interfere in these markets.
i) buy and sell gold and foreign currency, as well as close credit operations abroad.
j) operate on the financial and commercial exchange markets.

BACEN was created by Law 4,595/64 and began to operate in 1965. Since August/2004, the position of a Special Nature, the President of the Central Bank of Brazil, was transformed into a position of a Minister of State.

Balance sheet

A quantitative summary of a company‘s financial condition at a specific point in time, including assets, liabilities and net worth.

Balanced fund

A mutual fund that buys a combination of common stock, preferred stock, bonds, and short-term bonds, to provide both income and capital appreciation while avoiding excessive risk.

Bank Deposit Certificate – CDB

Fixed-income security issued by commercial and investment banks that bears interest and represents an endorsable nominative payment promise to the order and amount deposited in the bank plus the value of the remuneration or profitability that resulted up to its maturity.

Basic interest rate – SELIC

Reference interest rate established by the Brazilian government.


Measures the sensitiveness of an asset in relation to a certain index.


The highest price any buyer is willing to pay for a given security at a given time. Also called bid price.

Bill of exchange

Funding instrument utilized by consumers´ credit institutions.


A large amount of securities being traded, usually between two buyers, but open for bidding by the market at large.


National Bank for Economic and Social Development – A public federal company linked to the Ministry of Development, Industry, and Foreign Trade, with the objective of providing long-term financing for the business enterprises that contribute to the country‘s development. Its purpose is to strengthen the capital of the private companies, to develop the stock market and the trade of machines and equipment, and to finance exports. It supports the social investments toward education and health, family farmers, basic sanitation and environment, as well as public mass transportation. Its financing actions result in improving Brazil‘s economic competitiveness and in increasing the population‘s quality of life. Its products and services have the purpose of meeting the investment needs of companies of any size and sector in the country. Partnerships with financial institutions and with agencies throughout the country make it possible to spread the bank‘s credit and give greater access to its resources.


Board showing the numbers and prices of securities traded in the stock exchange (commonly referred to as “the big board”).

Book shares

Shares for which certificates are not issued. They are kept in a deposit account in the name of the holder at the depository financial institution appointed by the company that issued them.


Period in which the transaction volume on the market greatly surpasses the average historical levels, followed by an expressive increase of the stock prices.


São Paulo Stock Exchange – a non-profit association with the purpose of maintaining an adequate place or system for electronic negotiation of purchase/sale transactions of securities registered in the Brazilian Securities and Exchange Commission – CVM, in a free and open market, specially organized and inspected by its members, by the monetary authority, and especially by the CVM itself. The Stock Exchange‘s self-regulation has the purpose of protecting elevated ethical standards of negotiation and to publish the operations carried out quickly, broadly, and in detail.

Bovespa Index (IBOVESPA)

São Paulo Stock Exchange Index, evaluates the performance of a hypothetical stock portfolio.

Bovespa options

Gives the bearer the right to buy or sell one São Paulo Stock Exchange BOVESPA Index up to (or at) a specific date. The premium and the exercise price of these options are expressed as BOVESPA points, and their value is determined by BOVESPA (currently R$ 1.00) .

Break Even Point

Break-even point between income and expense. Higher incomes than expenses mean profit and lower incomes than expenses mean a loss. This concept applies to the activities of a company, to the stock market, and to other assets as well.

Broker´s fee

A fee charged by a broker or agent for their service in facilitating a transaction, such as the buying or selling of securities or real estate.


Call option

An option contract that gives the holder the right to buy a certain quantity of an underlying security from the writer of the option, at a specified price (strike price) up to a specified date (maturity date).


1) Sum of assets and resources used to set up a company.
2) Amount of money invested in economic activities for the purpose of receiving profit.
3) Amount of money invested in assets, securities, and in organized markets.
4) Obligation of the company toward its partners, characterized as shareholder‘s equity.

Capital gain

Difference between the sale price and the acquisition cost of an asset, including the buying and selling of shares, interest on financial investments, rents, selling of real estate, and other modalities.

Capital increase

Adding reserves or new funds to the company‘s capital. This is done through the issue of new bonus shares, increase of the par value of the shares and/or subscription of new shares by the stockholders.

Capital markets

The markets for corporate equity and intermediate or long-term debt securities.


1) Capital increase made with resources from the result of the company‘s operations, new capital subscription, or sell of a portion of the existing capital above market prices, which is incorporated into the company‘s capital.
2) Modality of receiving savings with a periodical draw of prizes.
3) Process of reinvesting resources based on the fact that the resources received are transformed into principal in order to offer results in subsequent periods.


Cash consists of cash and mayinclude cash-like items such as short-term investments that can be quickly converted to cash.

Cash bonus

Cash distributed to shareholders in addition to regular dividends, usually form reserves not previously incorporated.

Cash operation

Operation in which shares are sold in the spot market and bought again on the same day in a futures market; the cost of financing is equivalent to the difference between the buying and selling prices.

Cash Yield

Rate obtained by dividing the value of the dividend distributed per share by the current share price. This indicator can be used to analyze the forecasted profitability of a share.

CBLC – Brazilian Clearing and Depository Corporation

Closed capital, limited liability company, which provides clearing services, liquidation and control of operational risk. The CBLC also works with the custody of assets and manages the Securities Bank CBLC – BTC. It is a self-regulated organization, under the supervision of the Brazilian Securities Commission – CVM.

CBLC Securities lending Program – BTC

The clearing house that carries out the activities related to compensation, settlement, custody, and risk control for the financial market. This company has the business purpose of providing physical and financial compensation and settlement services of operations made on the cash and credit markets of São Paulo Stock Exchange and of other markets, as well as the operations of the custody systems of securities in general. The CBLC operations constitute of delivery upon payment, settlement guarantee, settlement on reserve, and transfer of available funds on the same day.


Provisional certificate of a certain number of shares or debentures.

CETIP – Center for Custody and Financial Settlement of Securities

Clearing House for the Custody and Financial Settlement of Securities – This company operates with the over-the-counter market, recording and negotiating fixed-income securities.

It was created to guarantee the safety and agility of the operations made on the Brazilian financial market.

It offers support to the entire operational chain, providing integrated services of custodianship, online negotiation, records of business deals, and financial settlement.

Circuit Breaker

Any of a number of procedures implemented by a major stock or commodity exchange when a certain index falls or rises a predetermined amount in a session, to avoid panic among investors. This mechanism does not prevent a fall or the rising in the value of stocks or assets, but forces the market to make more careful decisions based on observation, counterbalancing the emotional factor which is often very significant in the stock market.

Clearing corporation

An organization which works with the exchanges to handle confirmation, delivery and settlement of transactions.

Closing price

Last price of an asset when the market closes at the end of a trading session.

Closing transaction

A transaction in which an investor terminates his short option or futures delivery obligation by purchasing a fungible contract having the same terms as a contract previously sold.

CMN – National Monetary Council

National Monetary Council – A deliberative body at the head of the National Financial System. Its main responsibilities are as follows: a) adapt the money supply to the real needs of the economy. b) adjust the currency‘s internal and external amounts. c) protect the solvency and liquidity of the financial institutions. d) coordinate the monetary policies of credit, budget, fiscal, and of public debt. e) authorize the issuance of currency. f) establish guidelines and norms for exchange policies.


Assets pledged by a borrower to secure a loan or other credit, and subject to seizure in the event of default.

Commercial Paper

Promissory note issued by a local or external company in order to raise short-term funding.

Common stock

Shares that give voting rights to the stockholder, especially participation in the company‘s results and a right to vote in Assemblies. Each common share corresponds to one vote in the decisions made by the Stockholders Assembly.


Message that the stockbrokers send to the client confirming that a buy/sell of shares order was carried out.

Contingent order

An order which is to be executed only if another order is executed first. An example of a contingent order would be to sell one specific security if another specific security has been bought.

Control of company

Ownership of the largest part of voting stock in a company by one shareholder or group of shareholders, thus giving them the power of decision over it. The control can be:
a) by family (or defined): exercised by members of the same family or group of shareholders.
b) fragmented (or diluted): the quantity of the majority group‘s shares is not enough for exercising complete control over the company.

Controlling shareholder

A single shareholder who controls more than half of a corporation‘s outstanding shares with voting rights, or sometimes, one of a small group of shareholders who collectively control more than half of a corporation‘s outstanding shares with voting rights.


1) Act of converting the currency of a country into a foreign currency.
2) Changes in the characteristics of a security.

a) shares: common into preferred or vice-versa; nominative into book entry
b) debentures: conversion into shares
c) indicators: from reais into UFIR

Convertible debenture

Any type of debenture that can be converted into some other security.

Cost of goods sold

This is the cost expended in order to produce the products sold in a certain period.

Country risk

This is the risk of the government of a country to change its economic policy or the contract rules to the point that this interferes in the payments to foreign creditors. This risk is generally included in the interest rates charged by foreign loans.

Covered option

An option contract backed by the shares underlying the option. The two types are covered call and covered put.


When the prices of shares go down fast to extremely low levels, bringing the market down with them.

Cumulative dividend

Dividend that is not paid in the current period and whose payment is therefore transferred to next payment period.

CVM – Brazilian Securities Comission

Securities and Exchange Commission – Autarchy linked to the Department of Treasury and has the purpose of disciplining, inspecting, and developing the securities market in Brazil. It is the regulating organization of the capital market in Brazil.



The purchase and sale (or the short sale and cover) of the same security on the same day.


Unsecured debt backed only by the integrity of the borrower, not by collateral, and documented by an agreement called an indenture.

Deposit certificate

Security representing the stocks deposited at a financial institution. The shares of several companies in the Mercosur are traded in Brazilian stock exchanges using this mechanism.

Depositary (Financial Institucion)

A bank or company that holds funds or securities deposited by others, and where exchanges of these securities take place.


A financial instrument whose characteristics and value depend upon the characteristics and value of an underlier, typically a commodity, bond, equity or currency.

DI Rate

Average interest rate for overnight interbank operations registered at CETIP (Center for Custody and Financial Settlement of Securities).

Direct placement

A capital increase operation carried out by means of subscription of shares without an underwriter (e.g., an investment bank).

Direct trade

A transaction between two individuals or investing companies that agree to trade exclusively between each other based on specific rules dictated by regulators.


The release of relevant information necessary for investors to make an informed and safe decision concerning the purchase of stock.


The amount by which a security is sold below its nominal value.

Discretionary order

An order which gives the broker the authority to determine when and at what price to execute the transaction.

Discretionary order

A market order in which the floor trader has the discretion to execute the order when he/she feels it is best. Because of this discretion, the quality of the order depends on the trader‘s ability to select the right time to make the trade.


Financial institution that mediates the sale of primary securities to the general public.


A taxable payment declared by a company‘s board of directors and given to its shareholders out of the company‘s current or retained earnings. Dividends are usually given as cash (cash dividend), but they can also take the form of stock (stock dividend) or other property.

Dollar-adjusted futures

Futures market operation in which the price is adjusted daily according to the exchange rate between the Brazilian real and the American dollar for the period of time between the day of transaction and the day before maturity.

Dow Jones Industrial Average

Indicator calculated by Dow Jones & Company Inc. and is followed worldwide as a reference of the stock market‘s performance in the United States. The index reflects the average valuation of the 30 most traded stocks on the New York Stock Exchange. Published since October 7, 1896, it is considered the most traditional indicator used on the financial markets.


A closing price that is lower than the last price.


This is the selling of a product on the external market at a price “below its fair value”, which means at a price lower than is generally charged for the same product within the exporting country or in its sales to other countries. In general, dumping is viewed as an unfair practice in trade that can harm the manufacturers of similar products in the importing country.


Early redemption

Return of an investor‘s principal in a security prior to maturity.

Earnings per share

Total earnings divided by the number of shares outstanding.


Earnings Before Interest, Taxes, Depreciation and Amortization. An approximate measure of a company‘s operating cash flow based on data from the company‘s income statement. Calculated by looking at earnings before the deduction of interest expenses, taxes, depreciation, and amortization.

EBITDA margin

Ebitda Margin equals Ebitda divided by Net Revenue, expressed as a percentage. The percentage represents tha amount of each dollar of Revenue that results in Ebitda.

Electronic system operator

Broker representative who performs stock and option buying and selling operations at the BOVESPA electronic exchange.

Electronic trading

An automatic information network that provides brokers and dealers with price quotations on securities.

Emerging company fund

Closed-end fund which invests in a diversified portfolio of securities issued by emerging companies. To be qualified as “emerging,” a company must meet the following criteria: – Have an annual net revenue below the equivalent to R$ 60 million; – Not be part of any group of societies whose consolidated net equity is equal to or higher than the equivalent to R$ 120 million.


A signature used to legally transfer a negotiable instrument.


Benefits guaranteed to a shareholder, such as dividends for shareholders.


The goods and rights of an individual or a company.

Equity per share

Shareholders’ equity divided by the number of shares.


Securities with their nominal value expressed in US dollars or in other currencies and sold to investors outside of the country of origin of the issuer company.

Exclusion of subscription rights

Issue of debentures or convertible securities without subscription rights by current stock owners.


The date on or after which a security is traded without a previously declared dividend or distribution. After the ex-date, a stock is said to trade ex-dividend.

Ex-dividend stock

A security which no longer carries the right to the most recently declared dividend.

Exercise date

The date an option is exercised (purchase of underlying stock) as recorded at the stock exchange.


The purchase of stock without the right to purchase additional shares at a price below the current market price.

Extraordinary General Meeting of Shareholders

A meeting of shareholders held in accordance with the law and with company by-laws to discuss general matters of interest to the company. Extraordinary meetings are not held regularly, and they are scheduled according to the needs of the company.


Financial asset

A non-physical asset, such as a security, certificate, or bank balance.

Financial market

A market for the exchange of capital and credit, including the money markets and the capital markets.

Financing operation

Operation in which shares are bought in the spot market and sold on the same day in a futures market; the investment gain corresponds to the difference between the two prices during the period of financing.

Financing order

An order to buy a specified quantity of a security and another to sell it, with different maturities.

Fixed income

Financial investment in securities whose interest rate is previously defined. The remuneration can be pre-fixed or post-fixed.

Flat market

Weak market not following a trend, in which prices are neither rising nor falling; also called sideways.

Floor broker

An exchange member who executes orders on the floor of an exchange on behalf of others who do not have access to the trading area.

Form 20-F

Report required by SEC (Securities and Exchange Commission) for all non-American companies with shares traded in the United States. The document includes general information on the company, risk factors, operational, economic-financial, and market performance, etc.

Fractional share

Less than a single share of stock. Fractional shares often result from stock reverse splits, stock dividends and similar actions. The fractional share is either paid out in cash or credited to a dividend reinvestment plan.


Operation that has the objective of receiving funds by selling investments or carrying out credit operations, as the receiver.

Fungible custody

System for the central handling of securities where all securities of any particular class or series of any issuer deposited within the system are treated as fungible [interchangeable] and may be transferred or pledged by bookkeeping entry without physical delivery of the securities.

Futures market

Segment of the market that includes buying/selling operations of contracts authorized by the futures exchange carried out on the trading floor for settlement on a prefixed future date. Operations involving standard portions of commodities or financial assets are carried out here. The participants deal with future price quotations of these assets as hedgers, arbitrators, or speculators.


GDP – Gross Domestic Product

The total market value of all final goods and services produced in a country in a given year, equal to total consumer, investment and government spending, plus the value of exports, minus the value of imports.

Gross profit

Gross profit equals Revenue minus Cost of Goods Sold. It identifies the amount available to cover other operating expenses.

Gross profit margin

Gross profit margin equals gross profit divided by net revenue, expressed as a percentage. The percentage represents the amount of each dollar of revenue that results in gross profit.



An investment made in order to reduce the risk of adverse price movements in a security, by taking an offsetting position in a related security, such as an option or a short sale.


Highest price reached of an asset during a trading session.


A company that owns enough voting stock in another firm to control management and operations by influencing or electing its board of directors. Also called parent company.

Home broker

The Home Broker is a channel between investors and brokers. Its aim is to facilitate stock transactions, allowing the placement of purchase and sales orders via the Internet and providing access to information about stock prices and the status of portfolios, among other resources.


IGC – Corporate Governance Index

The Corporate Governance Index reflects the performance of a hypothetical portfolio composed of stocks of companies admitted to Level I of Corporate Governance at BOVESPA, the São Paulo Stock Exchange. The composition of this portfolio is reviewed every four months. The calculation of value for this portfolio is based on the spot price of stock.

Indirect placement

Capital increase made by the subscription of shares by the current shareholders with intermediation of a financial institution that alone or as part of a consortium, purchases all of the new shares.


Investor who has privileged access to information before it is disclosed to the market.

Interest on Capital Stock

Cash distributed to the shareholders in proportion to the number of shares held. It is a substitute to the payment of dividends.

Institutional investor

Entity with large amounts to invest, such as investment companies, mutual funds, brokerages, insurance companies, pension funds, investment banks and endowment funds. Institutional investors are covered by fewer protective regulations because it is assumed that they are more knowledgeable and better able to protect themselves. They account for a majority of overall volume.


Inventories are merchandise bought for resale or supplies and raw materials purchased for use in revenue producing operations.


Use of savings to buy equities so as to obtain return.


The investing of money or capital in order to gain profitable returns, as interest, income, or appreciation in value.

Investment club

Group of individuals (maximum 150) that invest in a diversified portfolio of marketable securities, following specific rules established by the Brazilian Securities and Exchange Commission – CVM and by the Stock Exchanges and administrated by an authorized financial institution.

IPO – Initial public offering

The first sale of stock of a private company in order to become an publicly listed company by means of an initial public offering (IPO), generally offered by one or more underwriters to the stock market.


A stock or bond which has been offered for sale by a corporation or government entity, usually through an underwriter or in a private placement.


A company or municipality offering (or having already offered) securities for sale to investors. Examples include corporations, investment trusts, and government entities.


Joint Venture

It is a joint investment of two companies that have a partnership in a third company.




Section of the Madrid Stock Exchange in which stock of Latin American companies is traded in Euros.


The possibility of controlling a block of shares and using a fraction of their value (in the options, term, and future markets), while the investor benefits from the valuation of these securities, which could result in a significant increase in the rate of return.


A financial obligation, debt, claim, or potential loss.

Limit order

An order to a broker to buy a specified quantity of a security at or below a specified price, or to sell it at or above a specified price (called the limit price). This ensures that a person will never pay more for the stock than whatever price is set as his/her limit. This is one of the two most common types of orders, the other being a market order.

Limited liability company

LLC. A type of company in which the liability of owners and managers is proportional to the stock they own.


The ability of an asset to be converted into cash quickly.

Listed company

A company whose shares have been registered with a Securities and Exchange Commission and are traded on a major exchange.

Listed stock

Stock traded on stock exchanges.


The acceptance of a security for trading on a registered exchange.


An arrangement whereby the interest rate on a floating rate note or preferred stock becomes fixed if it falls to a specified level.

Long term debt

Long-term debt represents the amount of borrowings due more than one year from de date of the balance sheet.


Set of securities with the same characteristics.


The lowest price a security or commodity reached in a certain period of time, usually a single trading session.



The amount of equity or money required for an investment in securities purchased on credit.

Margin Account

Form of trading stocks that makes it possible for the investor to obtain financing from a brokerage firm in order to purchase securities or loans on the financial instruments for sale. These operations are made on the cash market. The securities purchased are kept in a custody account kept by the brokerage firm at a value that, adding other guarantees, represents 140% of the value financed. If the securities are sold, the result obtained is retained along with the other guarantees deposited whose value represents 140% of the amount of the operation. The levels of the guarantees required for the margin account operations should be reassessed daily by the brokerage firm. Cost, settlement, and payment by the brokerage firm are agreed upon with the investor, as well as the reimbursement of any monies to the investor. The securities should be the property of the brokerage firm or be under custody by owners that have given authorization in writing to use them for operations of this nature.

Margin buying

A risky technique involving the purchase of securities with borrowed money, using the shares as collateral. Usually done using a margin account at a broker, and subject to fairly strict SEC buying on margin.

Market down

Situation in which closing index in a stock exchange is lower than the previous closing index.

Market maker

A broker or bank that maintains a firm bid and ask price in a given security by standing ready, willing, and able to buy or sell at publicly quoted prices (called making a market). These firms display bid and offer prices for specific numbers of specific securities, and if these prices are met, they will immediately buy for or sell from their own accounts.

Market order

Instruction given by a client to a brokerage firm for buying or selling securities, without determining the desired price. It should be carried out at the moment it is received in the trading floor.

Market price

A security‘s last reported sale price (if on an exchange) or its current bid and ask prices (if over-the-counter).

Market up

Situation in which the closing index in a stock exchange is higher than the previous closing index.


New São Paulo Stock Exchange – BOVESPA trading system featuring live call trading and remote terminals.


São Paulo Stock Exchange – BOVESPA electronic exchange. Meta is based on a daily fixed price and on the work of Market Makers, i.e., legal entities appointed by a company to record daily offers to buy and sell that company’s securities.

Minority shareholder

A holder of voting shares without sufficient ownership to control company operations.

Mutual fund

An open-ended fund operated by an investment company which raises money from shareholders and invests in a group of assets, in accordance with a stated set of objectives. Mutual funds raise money by selling shares of the fund to the public, much like any other type of company can sell stock in itself to the public.


National Commission of Stock Exchanges – CNBV

Non-profit civil association which represents the interests of Brazilian stock exchanges before monetary authorities and market regulators.

Net fixed assets

Net fixed assets are the assets of a company that are of a relatively permanent nature and are not intended for resale, such as property, plants, and equipment. The figure is stated as cost minus accumulated depreciation and amortization.

Net income from operations

Net income from total operations is the income from the operations after taxes and minority interest and before extraordinary gains/losses.

Net profit margin

Net Profit Margin equals Total Net Income divided by Net Revenue, expressed as a percentage. The percentage represents tha amount of each dollar of Revenue that results in Total Net Income.

Net receivables

Net receivables are amounts owed to the company, net of any provisions for bad debts.

No par value stock

Stock that is issued without a specified par value and which takes on the prevailing market price when the stock is launched.

Non-fungible custody

Custody service in which the securities deposited are not interchangeable.

Non-member broker

Brokers that are not members of a specific stock exchange, and are admitted to the trading floor under special circumstances.

Normal trade

A transaction carried out on the trading floor between two representatives of different brokers for an agreed price.


Odd lot

Less than the standard number of shares of a given stock. Some brokers charge higher commissions for such transactions (often 1/8 of a point per share, called the differential). Also called broken lot or uneven lot.

Open market

A market which is widely accessible to all investors or consumers. In Brazil, transactions with fixed income securities issued by public or private institutions.

Open outcry

Act in which a trader / broker pledges a sell or a buy on a given stock.

Open position

Balance of positions kept by an investor in the futures and options markets.

Opening price

The first price of a given security in a trading session.

Operating income

This is the same as gross income minus expenses with sales, as well as the general and administrative expenses. It is the profit from the company‘s normal operations. In Brazil, in accordance with accounting standards, operating income is the gross income minus expenses with sales, general and administrative expenses, financial earning, equity, and other expenses or operating income.

Operating margin

This is the operating profit divided by net sales, expressed as a percentage. The percentage represents the amount of each monetary unit of the net sales that resulted in operating profit.


The right, but not the obligation, to buy (for a call option) or sell (for a put option) a specific amount of a given stock, commodity, currency, index, or debt, at a specified price (the strike price) during a specified period of time.

Option bearer

Holder of the right to exercise or negotiate an option.

Option exercise

Purchase or sale of the underlying at the strike price by the holder of a call or put. In cash settled option markets, exchange of the option position for cash.

Option intrinsic value

The amount by which an option is in the money, calculated by taking the difference between the strike price and the market price of the underlier.

Option maturity date

The date on which the option expires.

Option Series

Options of the same class, strike price, and maturity.

Options issue

Selling operation which originates put and call options.

Options market

Market in which the rights to buy or sell a lot of securities are traded based on a contract which pre-establishes prices and exercise period.

Options market

Market where are traded the rights to buy or sell a lot of securities, with prices and period pre-established in contract.

Options mixing

Purchase or sale of two or more series of options over the same asset-object by the same investor, but with prices of the current year and/or different maturity dates.


Instruction given by a customer to a broker concerning the purchase or sale of securities.

Ordinary General Meeting of Shareholders

The company general meeting, usually held at the end of each fiscal year, at which the previous year and the outlook for the future are discussed and directors are elected by common shareholders.

Organized OTC – Over the counter

Trade system for stocks, managed by entity authorized by the Brazilian Securities Comission – CVM.

OTC – Over the counter

A security which is not traded on an exchange, usually due to an inability to meet listing requirements. For such securities, broker/dealers negotiate directly with one another over computer networks and by phone, and their activities are monitored by the NASD. OTC stocks are usually very risky since they are the stocks that are not considered large or stable enough to trade on a major exchange. They also tend to trade infrequently, making the bid-ask spread larger. Also, research about these stocks is more difficult to obtain. Also called unlisted.

Overnight operation

Open market operations lasting for a day, carried out by financial institutions only.


P/E Ratio

The most common measure of how expensive a stock is. The P/E ratio is equal to a stock‘s market capitalization divided by its after-tax earnings over a 12-month period, usually the trailing period but occasionally the current or forward period. The value is the same whether the calculation is done for the whole company or on a per-share basis. The higher the P/E ratio, the more the market is willing to pay for each dollar of annual earnings. The last year‘s price/earnings ratio (P/E ratio) would be actual, while current year and forward year price/earnings ratio (P/E ratio) would be estimates, but in each case, the “P” in the equation is the current price. Companies that are not currently profitable (that is, ones which have negative earnings) don‘t have a P/E ratio at all. Also called earnings multiple.

Paid in capital

Capital received from investors for stock, equal to capital stock plus contributed capital.

Paid-in capital per share

Quotient between a company’s paid-in capital and the number of shares.

Par value

The nominal amount assigned to a security by the issuer.

Par value increase

Change in the par value of a stock following the incorporation of reserves without the issue of new shares.

Pay out

This is the relation of the dividend or interest on capital stock distributed to the shareholders in relation to the profit that gave origin to this payment.

Pension plan

Set of resources from contributions made by employees and the company itself, administered by an entity connected to it whose purpose is to make investments in a diverse portfolio of shares, other securities, and real estate in order to complement the income the worker receives from the government‘s retirement plan.


A collection of investments all owned by the same individual or organization.

Preferred stock

Capital stock for which owners receive a specific dividend that is paid before dividends are paid to common stock holders, and which takes precedence over common stock in the event of a liquidation. Preferred stock shareholders usually do not enjoy voting rights.


The difference between the par value of a share and the amount for which it is sold.

Primary market

The market for new securities issues. In the primary market the security is purchased directly from the issuer. This differs from the secondary market.

Private company

A company whose shares are not traded on the open market. Opposite of publicly-traded company.

Private placement

The sale of securities directly to institutional investors, such as banks, mutual funds, insurance companies, pension funds, and foundations. Does not require SEC registration, provided the securities are bought for investment purposes rather than resale, as specified in the investment letter. Normally, these placements are offered to QIBs – Qualified Institucional Buyers.

Pro rata dividend

Dividend distributed to the shares issued during the fiscal year proportionally to the time elapsed until the end of the year.


Net gain generated by a security; the net profit associated with a stock, resulting from an increase in value over a specified period of time and from the distribution of gains – dividends, stock bonuses and/or subscription rights – by the issuer company in the same period of time.

Public offer to buy

Proposal to acquire a specific lot of shares for a certain price in an operation that is subject to interference.

Public offer to sell

Public placement of shares.




Evaluation or classification of risk attributed to an institution or security issued by it after a specialized company runs an assessment and evaluates the issuer‘s credit quality. The most renowned international companies that make these analysis are Standard & Poor‘s, Moody‘s, Duff & Phelps, and Fitch Investors Services.

Real estate fund

A closed-end fund established to produce income through investment in real estate. They have a fixed number of shares and trade like stocks.

Real estate note

Security issued by real estate credit associations to raise resources for financing builders and real estate buyers.

Reference rate – TR

This is the rate that serves as a reference in the financial transactions carried out in the country. It is calculated by the Central Bank based on interest rates paid by the Bank Deposit Certificates (CDBs) of the thirty largest financial institutions.

Return on Equity – ROE

A measure of how well a company used reinvested earnings to generate additional earnings, equal to a fiscal year‘s after-tax income (after preferred stock dividends but before common stock dividends) divided by book value, expressed as a percentage.

Right of withdrawal

The right of a shareholder to leave a company and sell his or her shares back in the case of disagreement with a decision taken in the annual general meeting concerning matters defined in the relevant law.

Rights offering

Offering of common stock to investors who currently hold shares which entitle them to buy subsequent issues at a discount from the offering price.

Road Show

Public relations / Marketing event that works like an informal forum between the company issuing securities and the potential investors.

Round lot

The normal unit of trading of a security; 100 shares of stock or 5 bonds. Also called normal trading unit or even lot or full lot. opposite of odd lot.


Sales on margin

The sale in the spot market of shares obtained by loan by an investor from a stock exchange broker. It is a type of margin account.


Remunerated deposit that can be freely moved and turned into cash, received by the financial agents of the National Financial System such as multiple banks with a real estate portfolio, real estate credit societies, and Savings & Loans Associations.


Sums of money that are not laid away for future use.

SEC – Securities & Exchange Comission

Securities and Exchange Commission. The primary federal regulatory agency for the securities industry, whose responsibility is to promote full disclosure and to protect investors against fraudulent and manipulative practices in the securities markets.

Secondary market

Trading of assets and securities in organized markets where investors buy and sell in search of profitability and liquidity, transferring among themselves the securities purchased previously from the primary market.

Secondary stock

Large and mid-sized private company stock that is less marketable and for which there is less demand.

Securities custody

Securities safekeeping and rights issues services.

Securities portfolio

Set of fixed and variable-income securities of an investor.

Selected stock portfolio receipt – RCSA

Selected stock portfolio receipts are a statement representing several preestablished stocks whose quantities are previously determined and known when the receipt is set up. Once they are constituted, the receipts will be traded on BOVESPA as if they were individual securities and their value will be determined by the market.

Share (of fund or investment club)

The smallest portion of a fund or investment club, obtained by dividing net equity by the number of quotas.

Share issue

Private or public subscription of new shares at the par value or other value, with or without premium, in order to increase a company‘s capital.


Stockholder of a corporation.

Short term debt

Short-term debt represents the amount of borrowings (principal and interest) that must be paid in the near future (usually within a year).

Small stock

Mid-sized and small private company stock whose trading is characterized by discontinuity.

SND – National Debentures System

National Debentures System- an electronic system developed by ANDIMA and by CETIP in order to process the registration, custody, trading, and financial settlement of the debenture operations.

Special auction

A pre-scheduled trading session.


Taking large risks, especially with respect to trying to predict the future; gambling, in the hopes of making quick, large gains.


Increase in the number of shares that represent a company‘s capital by deployment, without changing the capital stock. See Deployment of the number of shares.

Split [Company split]

This is the process whereby a company transfers parts of its equity to one or more companies that were set up for this purpose. In a spin-off, the company‘s equities are divided. In a split-up, the company split ceases to exist.

Split certificate

Formal declaration certifying a split operation (increase in the number of outstanding shares of a company‘s stock).

Spot market

A market in which commodities, such as grain, gold, crude oil, or RAM chips, are bought and sold for cash and delivered immediately.


Margin added to a rate. The spread is variable according to liquidity, the guarantees of the undertaker, the loan‘s volume, and the redemption term.

Standard lot

The normal unit of trading of a security; 100 shares of stock or 5 bonds. Also called normal trading unit or even lot or round lot.

Statutory deductions

A part of the company earnings which is not distributed to shareholders, as defined in the company by-laws.


Certificate representing one unit of ownership in a corporation, mutual fund, or limited partnership.

Stock bonus

Distribution of the company‘s results by issuing shares when more capital is added to the capital stock. The bonus shares are awarded at no charge for the stockholders and in proportion to the number of shares held. The bonus increases the quantity of the company‘s shares without changing the net equity.

Stock Broker

Intermediary in the buying and selling of assets and securities.

Stock exchange

An exchange on which shares of stock and common stock equivalents are bought and sold. Examples include the NYSE and the AMEX.

Stock exchange membership

Security issued by the stock exchange that gives the right to the acquiring brokerage firm to be a member and participate in the system for trading securities from the stock exchange.

Stock of record

Stock registered under the name of an investor on the Issuer‘s Nominative Stock Registry Book (stock ledger).

Stock split

An increase in the number of outstanding shares of a company‘s stock such that the proportion of equity of each shareholder remains the same.

Stock with par value

Stock with a nominal amount assigned by the issuer.

Stock with rights

Shares with rights (dividends, interest on capital, bonus, or subscription) not exercised by the holder.

Stocks portfolio

A set of shares held by an investor.

Stop order

A market order to buy or sell a certain quantity of a certain security if a specified price (the stop price) is reached or passed.

Strike price

Price per share or applicable security by which the holder has the right to purchase or sell the asset (object of the option).

Subscribed capital to pay

Amount of subscription shareholders must pay as determined by the entity authorizing a company’s capital increase.


The issuing of new shares by a Limited Liability Company to raise funds for investment.

Subscription deadline

Limit period established by a publicly-traded company for shareholders to exercise their subscription right in the subscription of shares of its emission.

Subscription right

The right of current shareholders to maintain their fractional ownership of a company by buying a proportional number of shares of any future issue of common stock. Most states consider preemptive rights valid only if made explicit in a corporation‘s charter.

Subscription rights

Negotiable right attached to each share thereby allowing a shareholder a pre-emptive right to subscribe during a capital increase.

Subscription warrant

A certificate, usually issued along with a bond or preferred stock, entitling the holder to buy a specific amount of securities at a specific price, usually above the current market price at the time of issuance, for an extended period, anywhere from a few years to forever.


An exchange of streams of payments over time according to specified terms. The most common type is an interest rate swap, in which one party agrees to pay a fixed interest rate in return for receiving a adjustable rate from another party.


Tag Along Rights

The right given to minority shareholders that extends the conditions offered to the controlling shareholders to them in the case of selling the company‘s control.


Advertising made by the company with the purpose of sharing information about its issuance of shares or fixed income securities.

Total capital

In a limited liability company, the amount of capital that the shareholders assign as resources destined to achieve the objectives established by the company.


A transaction of a security or commodity.

Trade confirmation

Written confirmation sent to investors acknowledging a securities transaction.

Trading floor

The place on an exchange where trading occurs.

Trading post

A trading system used in trading areas with the purpose of streamlining the work due to the quantity of trades made and this way distributing uniformly the flow of operations.

Trading Price

Price of any asset submitted to offer and demand in negotiations on the financial market.

Trial balance

An interim balance sheet of the company‘s economic-financial status and of its equity capital standing over a period shorter than its fiscal year.


Underlying security

For options, the security subject to being purchased or sold upon exercise of an option contract.


An intermediary between an issuer of a security and the investing public, usually an investment bank.


System for launching shares by the public subscription and to do so a company contracts a financial intermediary that will be responsible for the placement of its securities on the market.

Unsubscribed stock

Stock rights that were not exercised in a public offering.


A closing price that is higher than the last price.

US GAAP – United States Generally Accepted Accounting Principles

Set of accounting norms, conventions, standards and procedures used in preparing the financial reports used in the United States, which should be followed by all the companies from other countries that would like to trade their shares and/or securities on the stock exchanges in the US.


Variable income

Investment in securities whose profitability is not previously defined. Its interest rate or return depends on their quotations on the organized markets.


Difference between the prices of a certain security at two different moments.

Vehicle Equivalent

Vehicle equivalent is a measure generally calculated by adding heavy vehicles (commercial vehicles such as trucks and buses), multiplied by the number of axles charged. One light vehicle is counted as one axle of a heavy vehicle.

Venture Capital

Capital employed in activities with a risk of loss and the possibility of high returns.


Intensity and frequency of sudden variations in the price of an asset, index, or security.


Right that the common share holder has (or preferred share holder who has not lost this right) of voting in decisions made in the general shareholders‘ meetings.



A certificate, usually issued along with a bond or preferred stock, entitling the holder to buy a specific amount of securities at a specific price, usually above the current market price at the time of issuance, for an extended period, anywhere from a few years to forever. In the case that the price of the security rises to above that of the warrant‘s exercise price, then the investor can buy the security at the warrant‘s exercise price and resell it for a profit. Otherwise, the warrant will simply expire or remain unused. Warrants are listed on options exchanges and trade independently of the security with which it was issued. Also called subscription warrant.

Writing of option

Operation by which the option writer impedes the exercise of his/her position. This is done by purchasing options of the same series before, on the same floor and in the same quantity as those that were sold




See Cash Yield.