Future and option trading strategies pdf to word converter


Demand The combined desire, ability and willingness on the part of consumers to buy goods or services. Demand is determined by income and by price, which are, in part, determined by supply. Discretionary Account A securities account created when a client gives a partner, director or qualified portfolio manager of a Participating Organization specific written authorization to select securities and execute trades on the client's behalf. Distribution The portion of the issuer's equity paid directly to the security holders.

The issuer or its representative provides the amount, frequency monthly, quarterly, semi-annually, or annually , payable date, and record date.

Diversification Limiting investment risk by purchasing different types of securities from different companies representing different sectors of the economy. Dividend The portion of the issuer's equity paid directly to shareholders. It is generally paid on common or preferred shares. An issuer is under no legal obligation to pay either preferred or common dividends. Dividend Reinvestment Plan A means of reinvesting dividends, which would otherwise be paid to the shareholder in cash, in additional stock of the company.

Dividend Yield Equal to the indicated annual dividend rate per share divided by the security's price. Dollar Cost Averaging Investing a fixed amount of dollars in a specific security at regular set intervals over a period of time. Dollar cost averaging results in a lower average cost per share, compared with purchasing a constant number of shares at set intervals.

The investor buys more shares when the price is low and buys fewer shares when the price is high. The DJIA is calculated by adding the prices of each of the 30 stocks and dividing by a divisor.

The DJIA is one of the most widely quoted stock market averages in the media. Downtick A trade is on a downtick when the last trade occurred at a price lower than the previous one. The trust receives royalty income from producing properties essentially, net cash flow and then sells interests in the trust called trust units to investors.

Conventional oil and gas royalty trusts are actively managed portfolios holding assets of mature producing properties. Substantially all of the cash flow generated by the oil and gas assets, net of certain deductions, such as administrative expenses and management fees, is passed on to the unit holders as royalty income.

Capital expenses may also be deducted, but are usually subject to restrictions on the amount. The distributions are highly dependent upon the cash flow generated by the trust. In general, the largest variable in determining the level of cash flow is the price of crude oil and natural gas. Royalty trusts provide an alternative from owning the shares of individual companies for investors to participate in the oil and gas sector.

Equities Common and preferred stocks, which represent a share in the ownership of a company. The value equals the number of securities multiplied by the offering price. The various forms of financial instruments may have an effect on determining the price or the number of securities. Equity Option An option contract that grants the holder the right to buy or sell a specific number of shares of stock at a specified price during a specific period of time.

Equity Value The total dollar value of volume traded on one side of the transaction for a specified period. It equals price multiplied by volume. Equity Volume The total number of shares traded on one side of the transaction. Escrowed Securities The outstanding securities of an issuer that are not freely tradable, because they are subject to an escrow agreement that restricts the ability of certain security holders of that issuer from trading or otherwise dealing in those securities until certain conditions are satisfied.

European-Style Option Options that can be exercised only on their expiration date. Ex Dividend The holder of shares purchased ex dividend is not entitled to an upcoming already-declared dividend, but is entitled to future dividends. Ex Right The holder of shares purchased ex rights is not entitled to already-declared rights, but is entitled to future rights issues.

Exchange Offering Prospectus EOP A form of prospectus that allows a company to conduct a prospectus offering through the facilities of a stock exchange, rather than issuing them directly to the public.

The company then applies to list the securities on the exchange. Exchangeable Security A security of an issuer that is exchangeable for securities of another issuer usually a subsidiary in accordance with the terms of the exchange feature. The exchange may be at the option of the holder or at the option of the issuer of the securities.

Exchange-Traded Fund ETF A special type of financial trust that allows an investor to buy an entire basket of stocks through a single security, which tracks and matches the returns of a stock market index.

ETFs are considered to be a special type of index mutual fund, but they are listed on an exchange and trade like a stock. Also known as an index participation unit IPU. The ex-d date is two clearing days before the record date. The exchange that the issue is listed on sets the ex-d date.

Exempt Issuer A listed issuer that has satisfied listing requirements as outlined in Section of the Listing Requirements Manual. An exempt issuer is not subject to special reporting rules. This status is generally reserved for senior listed issuers. Exercise The act of an option holder who chooses to take delivery calls or make delivery puts of the underlying interest against payment of the exercise price. Expiration Date The date at which an option contract expires.

This means that the option can't be exercised after that date. Ff Face Value The cash denomination of the individual debt instrument. It is the amount of money that the holder of a debt instrument receives back from the issuer on the debt instrument's maturity date.

Face value is also referred to as par value or principal. Filing Statement A disclosure document submitted by a listed company to outline material changes in its affairs. Filing statements are not used for the purposes of a financing. Floating Rate Security A security whose interest rate or dividend changes with specified market indicators. A floating rate is one that is based on an administered rate, such as a prime rate.

It can be an initial public offering IPO , secondary offering, or private placement. Freeze An interruption in trading on a stock, triggered when an order violates parameters set by TSX.

Frequency Frequency refers to the given time period on an intraday, daily, weekly, monthly, quarterly or yearly perspective. Typically, choosing a weekly or monthly perspective when looking at several years of data makes it easier to identify long-term trends. Daily charts are useful for active traders and short-term time period charts. The "Daily", "1-Minute", "5-Minute", "Minute" and "Hourly" frequency are used for intraday charts and the remaining choices are applicable to end-of-day charts.

Front Month The closest month to expiration for a futures or option contract. GICS are used to classify the constituents of many indices worldwide. GICS is a four-level classification system.

The four levels are: Good Delivery The term used to describe a security that is in proper form to transfer title, which means that the registered owner has endorsed it. To settle a sale, the certificate must be surrendered on good delivery by the seller. A certificate that bears a share transfer restriction will not constitute good delivery. This type of order is also referred to as an open order. This is another kind of open order. Growth Stock The shares of companies that have enjoyed better-than-average growth over recent years and are expected to continue their climb.

Guaranteed Investment Certificate GIC A deposit instrument most commonly available from trust companies or banks requiring a minimum investment at a predetermined rate of interest for a stated term, such as one or five years. GICs are generally non-redeemable and non-transferable before maturity. Hh Halted Issue A temporary stoppage of trading of the listed securities of an issuer, which may be imposed by the Exchange, its agent Market Regulation Services Inc.

RS , or voluntarily requested by the issuer. Usually an issuer's listed securities are halted pending a public announcement of material information about the issuer, but the Exchange or RS may also impose a halt if the issuer is not in compliance with Exchange requirements or if the Exchange determines that it is in the public interest to do so.

Hedge A strategy used to limit investment loss by making a transaction that offsets an existing position. High Price The highest price at which a board lot trade on a security was executed during a trading session. Ii Improving the Market An order that either raises the bid price or lowers the offering price is said to be improving the market. The market improves because the spread between the bid and offer decreases.

Income Deposit Security IDS An exchange-traded, fixed income-like instrument consisting of a subordinated debt security and a share of common stock packaged together to form a tax-efficient delivery mechanism to distribute an issuer's free cash flow to its investors. Investors are paid dividends from the common share component and interest from the subordinated debt. The structure was created for U. IDSs do not use the trust structure. Also known as income participating securities IPS.

Income Stock A security with a solid record of dividend payments and which offers a dividend yield higher than the average common stock. Income Trust Also called income funds. Income trusts are trusts structured to own debt and equity of an underlying entity, which carries on an active business, or has royalty revenues generated by the assets of an active business.

By owning securities or assets of an underlying business, an income trust is structured to distribute cash flows, typically on a monthly basis, from those businesses to unit holders in a tax-efficient manner.

The trust structure is typically utilized by mature, stable, sustainable, cash-generating businesses that require a limited amount of maintenance capital expenditures. An income trust is an exchange-traded equity investment that is similar to a common share. There are four categories of income trusts: Index A statistical measure of the state of the stock market, based on the performance of stocks.

The ICCP is calculated without reference to volatility parameters. A key objective of broadcasting the ICCP is to provide market participants with an early indication of potentially large price movements at the close. Inflation An overall increase in prices for goods and services, usually measured by the percentage change in the Consumer Price Index. Inside Information Non-public information pertaining to the business affairs of a corporation that could affect the company's share price should the information be made public.

Insider All directors and senior officers of a company, and those who are presumed to have access to inside information concerning the company.

Insider Trading There are two types of insider trading. The first type occurs when insiders trade in the stock of their company. Insiders must report these transactions to the appropriate securities commissions. The other type of insider trading is when anyone trades securities based on material information that is not public knowledge. This type of insider trading is illegal. Intermarket Surveillance Group ISG An international committee comprised of members from 31 exchanges around the world, including every major stock exchange.

Membership in the ISG allows all members to share surveillance and investigative information to ensure that each regulator has access to the necessary information to effectively regulate its marketplace. The ISG promotes effective market surveillance among international exchanges and RS involvement helps ensure they are continually in touch with other regulators and part of the development of international best practices. It consists of a two-character alphabetic country code specified in ISO , followed by a nine-character alphanumeric security identifier assigned by a national security numbering agency , and then an ISIN check-digit.

Intrinsic Value The difference between the current market value of the underlying interest and the strike price of an option. In-the-money is a term used when the intrinsic value is positive. Investment The purchase or ownership of a security in order to earn income, capital or both.

Investments may also include artwork, antiques and real estate. Investment Advisor A person employed by an investment dealer who provides investment advice to clients and executes trades on their behalf in securities and other investment products. Investment Capital Initial investment capital necessary for starting a business. Investment capital usually consists of inventory, equipment, pre-opening expenses and leaseholds. Investment Counsellor A specialist in the investment industry paid by fee to provide advice and research to investors with large accounts.

Investment Dealer Securities firms that employ investment advisors to work with retail and institutional clients. Investment dealers have underwriting, trading and research departments. The Association's role is to foster efficient capital markets by encouraging participation in the savings and investment process and by ensuring the integrity of the marketplace. Investment Fund A closed-end fund that offers investors the ability to buy a security that represents a portfolio of investments with a specific investment strategy.

These products use funds raised through a public offering to invest in a portfolio of securities, which are actively managed to create income streams for investors, typically through a combination of dividends, capital gains, interest payments, and in some cases, income from derivative investment strategies. These funds are not directly related to an operating business. Investor Relations A corporate function, combining finance, marketing and communications, to provide investors with accurate information about a company's performance and prospects.

It is the stated prospectus price multiplied by "the number of securities issued under the IPO plus the over allotment".

Issue Any of a company's securities or the act of distributing the securities. Issued shares refer to the portion of a company's shares that have been issued for sale. A company does not have to issue the total number of its authorized shares. Issue Status The trading status of a class or series of an issuer's listed securities, such that a class or series of listed securities of an issuer may be halted, suspended, or delisted from trading.

Issued and Outstanding Securities Commonly refers to the situation where the number of issued securities equals the number of outstanding securities. However, under certain corporate statutes in Canada, an issuer may have issued securities and then repurchased those securities without cancelling them. In that case, the securities are issued but are not outstanding. As a result, the number of issued securities does not equal the number of outstanding securities.

Issuer Status The trading status of a listed or formerly listed issuer. Issuer status types include: Jj Jitney Order The execution and clearing of orders by one member of a stock exchange for the account of another member. For example, investment dealer A is a small firm whose volume of business is not sufficient to maintain a trader on the exchange.

Instead, investment dealer A gives its orders to investment dealer B, a larger organization which is a member of the exchange, for execution. Investment dealer A pays a reduced percentage of the normal commission.

Junior Corporation A young company in the early stages of operations and growth. If the MOC closing price acceptance parameters are exceeded, it equals the last board lot sale price of the security on the exchange in the regular trading session.

For any other listed security, the last sale price equals the last board lot sale price of the security on the exchange, in the regular trading session. Last Trading Day The last day on which a futures or option contract may be traded. Liabilities The debts and obligations of a company or an individual. Current liabilities are debts due and payable within one year. Long-term liabilities are those payable after one year. Liabilities are found on a company's balance sheet or an individual's net worth statement.

Limit Order An order to buy or sell stock at a specified price. The order can be executed only at the specified price or better. A limit order sets the maximum price the client is willing to pay as a buyer, and the minimum price they are willing to accept as a seller. Liquidating Order An order to close out an existing open futures or options contract. A liquidating order involves the sale of a contract that has been purchased or purchase of a contract that has been sold.

Liquidity This refers to how easily securities can be bought or sold in the market. A security is liquid when there are enough units outstanding for large transactions to occur without a substantial change in price.

Liquidity is one of the most important characteristics of a good market. Liquidity also refers to how easily investors can convert their securities into cash and to a corporation's cash position, which is how much the value of the corporation's current assets exceeds current liabilities. Listed Stock Shares of an issuer that are traded on a stock exchange. Issuers pay fees to the exchange to be listed and must abide by the rules and regulations set out by the exchange to maintain listing privileges.

Listing Application The document that an issuer completes and submits to an exchange when it applies to list its shares on the exchange. The issuer must disclose its activities, plans, management and finances in the application. Long A term that refers to ownership of securities. Low Price The lowest price at which a board lot trade was executed during a period of time. Mm Margin Account A client account that uses credit from the investment dealer to buy a security. A client needs to deposit a margin amount with the balance advanced by the investment dealer against collateral such as investments.

The investment dealer can make a margin call, which means the client must deposit more money or securities if the value of the account falls below a certain level. If the client does not meet the margin call, the dealer can sell the securities in the margin account at a possible loss to cover the balance owed. The investment dealer also charges the client interest on the money borrowed to buy the securities. Market The place where buyers and sellers meet to exchange goods and services.

It also represents the actual or potential demand for a product or service. Market Capitalization The number of issued and outstanding securities listed for trading for an individual issue multiplied by the board lot trading price. Should a trading price not be available, a bid price, a price on another market, or if applicable, the price for an issue of the same issuer which the first issue is convertible into, may be used.

Total market capitalization for a market is obtained by adding together all individual issue market capitalizations warrants and rights excluded. Escrowed shares are excluded from TSX Venture market capitalization.

Market Maker A trader employed by a securities firm who is required to maintain reasonable liquidity in securities markets by making firm bids or offers for one or more designated securities up to a specified minimum guaranteed fill.

Market makers for the stock of issuers listed on Toronto Stock Exchange are referred to as Registered Traders. MOC accepts confidential market orders from before the open and throughout the trading session, maintaining them in time priority. Twenty minutes before the close of the trading session, MOC publicly broadcasts an imbalance of buy and sell MOC market orders and asks for limit MOC orders to offset the imbalance. Ten minutes before the close of the trading session, MOC publicly broadcasts an Indicative Calculated Closing Price ICCP that provides market participants with an indication of what the calculated closing price would be assuming the regular trading session had ended at that time see Indicative Calculated Closing Price for more details.

At the close, MOC matches orders, from the MOC and continuous market books, at a calculated closing price which assures the most matches closest to the last sale price , and allocates the fills according to price and time priority. Market Order An order to buy or sell stock immediately at the best current price. This information product shows the committed, tradable volume of the top 5 bids and asks for each Toronto Stock Exchange or TSX Venture Exchange-listed stock. Material Change A change in an issuer's affairs that could have a significant effect on the market value of its securities, such as a change in the nature of the business or control of the issuer.

Under the principle of continuous disclosure, a listed issuer must issue a news release and report to the applicable self-regulatory organization as soon as a material change occurs. Minimum Fill Order A special term order with a minimum fill condition will only begin to trade if its first fill has the required minimum number of shares. For example, an order to buy 5, shares with a minimum volume of 2, shares can only trade if 2, or more shares become available.

A Registered Trader will provide the stock should the book be below the required limit. To be eligible for MGF, an order has to be a tradable client order with a volume less than or equal to the MGF size, which varies from stock to stock. Minimum Price Fluctuation The minimum price change or tick on a futures contract. Mixed Lot or Broken Lot An order with a volume that combines any number of board lots and an odd lot. Money Market Part of the capital market established to buy and sell short-term financial obligations.

These include federal government treasury bills, short-term Government of Canada bonds, commercial paper, bankers' acceptances and guaranteed investment certificates. Longer-term securities are also traded in the money market when their term shortens to three years. It is intended to reduce costly duplication of disclosure requirements and other filings when issuers from one country register securities offerings in the other.

Under the rules, eligible cross-border offerings are governed by the disclosure requirements of the issuer's home country. These orders are guaranteed a complete fill at the opening price to offset expiring options. They must be ordered between 4: Mutual Fund A fund managed by an expert who invests in stocks, bonds, options, money market instruments or other securities.

Mutual fund units can be purchased through brokers or, in some cases, directly from the mutual fund company. Nn Naked Writer A seller of an option contract who does not own a position in the underlying security. Net Change The difference between the previous day's closing price and the last traded price. Net Worth The difference between a company's or individual's total assets and its total liabilities.

Also known as shareholders' equity for a company. New Issue A stock or bond issue sold by a company for the first time. Proceeds may be used to retire the company's outstanding securities, or be used for a new plant, equipment or additional working capital.

New debt issues are also offered by governments. New Issuer Listing Occurs concurrently with the posting of the new issuer's securities for trading. The preconditions for listing include the acceptance by the Exchange that all listing requirements and conditions have been satisfied.

The effective listing date is the date when the listed securities open for trading. These applications in themselves provide prospectus-level disclosure; however, often the listing application is accompanied by an offering document or a prospectus.

The issuer's security would be delisted from TSX Venture Exchange and listed on TSX at the same time, permitting continuous listing of the securities on contiguous exchanges. The offering is often made in conjunction with an issuer's initial application for listing on an exchange. A plan of arrangement is a form of corporate reorganization that must be approved by a court and by the corporation's shareholders or others affected by the proposed arrangement, all as prescribed by corporate legislation.

A plan of arrangement can take various forms, including:. New Issuer Listing - Spin-Off A reorganization that usually results in a newly listed issuer acquiring a business division or assets as its principal operating asset from another issuer the reorganized issuer , with security holders of the reorganized issuer holding securities in both issuers, following completion of the reorganization. The issuer's security would be delisted from TSX and listed on TSX Venture Exchange at the same time, permitting continuous listing of the securities on contiguous exchanges.

New Listing A security issue that is newly added to the list of tradable security issues of an exchange. It is accompanied with a new listing date. They are identified with an extension of "H" added to their stock symbol. Non-Certificated Issues An issue that is recorded on the transfer agent's electronic book rather than being held as a physical note. Non-Client Order An order from a Participating Organization or an order a firm is executing on behalf of an institution, such as a mutual fund.

An "N" denotes a non-client order in the book. Non-Exempt Issuer A listed issuer that is subject to special reporting rules. Non-Net Order A special-term order when there is a clear understanding between the buying and selling parties that they will settle the trade directly with each other. Non-Resident Order A special term order when one or more participants in the trade is not a Canadian resident.

Oo Odd Lot A number of shares that are less than a board lot, which is the regular trading unit decided upon by the particular stock exchange. An odd lot is also an amount that is less than the par value of one trading unit on the over-the-counter market.

For example, if a board lot is shares, an odd lot would be 99 or fewer shares. One-Sided Market A market that has only buy orders or only sell orders booked for a particular security. An on-stop order becomes a limit order once a trade at the trigger price has occurred.

Ontario Securities Commission The government agency that administers the Securities Act Ontario and the Commodity Futures Act Ontario and regulates securities and listed futures contract transactions in Ontario.

Open Order An order that remains in the system for more than a day. Open-End Investment Fund An investment fund that continuously offers its securities to investors and stands ready to redeem its securities at all times. Examples of an open-end fund are traditional mutual funds and exchange-traded funds ETFs.

Option The right, but not the obligation, to buy or sell certain securities at a specified price within a specified time.

A put option gives the holder the right to sell the security, and a call option gives the holder the right to buy the security. Option Class All options of the same type, either calls or puts, that have the same underlying security. Option Holder The buyer of an option contract who has the right to exercise the option during its lifetime.

Option Writer The seller of an option contract who may be required to deliver call option or to purchase put option the underlying interest covered by the option, before the contract expires.

Order Number An eight or nine-digit number assigned to every order entered into the system. Almost all bonds and debentures, as well as some stocks, are traded over-the-counter in Canada. An OTC market is also known as an unlisted market.

Pp Par Value A security's nominal face value. Partial Fill An order receives a partial fill when it trades only part of its total committed volume. However, only POs are also involved in all aspects of the securities business, including underwriting new issues and other financings, and assisting companies in the initial public offering IPO process.

Portfolio Holdings of securities by an individual or institution. A portfolio may include various types of securities representing different companies and industry sectors. Position Limit The maximum number of futures or options contracts any individual or group of people acting together may hold at one time. They are investment vehicles that have underlying businesses that are utilities, power generation companies, or pipeline companies. Preferred Share A class of share capital that entitles the owner to a fixed dividend ahead of the issuer's common shares and to a stated dollar value per share in the event of liquidation.

It usually does not have voting rights, unless a stated number of dividends have been omitted. Pre-Opening Session A session from 7: ET when orders can be entered into the Toronto Stock Exchange's systems. Tradable orders will be queued until after 9: This ratio shows you how many times the actual or anticipated annual earnings a stock is trading at. Principal Trade A trade when a Participating Organization is either buying from, or selling to its client.

Priority If there are several orders competing for a stock at the same price, a priority determines when one of these orders will be filled before any other at this price. Priority is based on the time at which the order is received into the system. Private Placement The private offering of a security to a small group of buyers. Resale of the security is limited. The number of securities is the actual number issued.

The composition of the financing could take the form of units comprised of multiple securities. Professional and Equivalent Real-Time Data Subscriptions The total number of professional accesses to real-time products of TSX and TSX Venture Exchange, as well as non-professional accesses that are priced the same or at a minimal discount to the professional access rate for the same product.

Profit What is left over for the owners of a business after all expenses have been deducted from revenues. Gross profit is the profit before corporate income taxes. Net profit is the final profit of the business after taxes have been paid. Prospectus A legal document describing securities being offered for sale to the public. It must be prepared in accordance with provincial securities commission regulations.

Prospectus documents usually disclose pertinent information concerning the company's operations, securities, management and purpose of the offering.

Push-Out A push-out occurs during a stock split when new shares are forwarded to the registered holders of old share certificates, without the holders having to surrender the old shares. Both the old and new shares have equal value.

Put Option A put option is a contract that gives the holder the right to sell a specified number of shares at a stated price within a fixed time period. Put options are purchased by those who think a stock may decline in price.

Rr Rally A brisk rise in the general price level of the market or price of a stock. Real Estate Investment Trust REIT Typically, a closed-end investment fund that trades on an exchange and uses the pooled capital of many investors to purchase and manage income properties.

Equity REITs primarily own commercial real estate, such as shopping centres, apartments, and industrial buildings. By taking advantage of the trust structure, REITs offer tax advantages beyond traditional common equity investments to investors and provide a liquid way to invest in real estate, which otherwise is an illiquid market.

Redeemable Security A security that carries a condition giving the issuer a right to call in and retire that security at a certain price and for a certain period of time. Registered Traders A trader employed by a securities firm who is required to maintain reasonable liquidity in securities markets by making firm bids or offers for one or more designated securities up to a specified minimum guaranteed fill. Their duties include providing a minimum guaranteed fill, maintaining minimum spread and ensuring orderly trading.

Retractable Security A security that features an option for the holder to require the issuer to redeem it, subject to specified terms and conditions. Rights A temporary privilege that lets shareholders purchase additional shares directly from the issuer at a stated price. The price is usually less than the market price of the common shares on the day the rights are issued. The rights are only valid within a given time period.

It is market capitalization weighted, with weights adjusted for available share float, and includes securities of 60 issuers balanced across ten economic sectors. It is the leading benchmark used to measure the price performance of the broad, Canadian, senior equity market. This index does not have a fixed number of constituents. Since they are Government backed bonds they give a secured return and also ensure safety of the principal amount. They are best suited for the medium to long-term investors who are averse to risk.

Balanced Funds These funds invest both in equity shares and fixed-income-bearing instruments debt in some proportion. They provide a steady return and reduce the volatility of the fund while providing some upside for capital appreciation. They are ideal for medium- to long-term investors willing to take moderate risks.

Hedge Funds These funds adopt highly speculative trading strategies. They hedge risks in order to increase the value of the portfolio. Generally they are open for subscription and redemption throughout the year. Their prices are linked to the daily net asset value NAV. From the investors' perspective, they are much more liquid than closed-ended funds. Investors are permitted to join or withdraw from the fund after an initial lock-in period. These funds have a fixed date of redemption.

One of the characteristics of the close-ended schemes is that they are generally traded at a discount to NAV; but the discount narrows as maturity nears. These funds are open for subscription only once and can be redeemed only on the fixed date of redemption.

The units of these funds are listed with certain exceptions , are tradable and the subscribers to the fund would be able to exit from the fund at any time through the secondary market.

Interval funds These funds combine the features of both open-ended and close-ended funds wherein the fund is close-ended for the first couple of years and open-ended thereafter. Some funds allow fresh subscriptions and redemption at fixed times every year say every six months in order to reduce the administrative aspects of daily entry or exit, yet providing reasonable liquidity.

Offshore Funds These funds facilitate cross border fund flow. They invest in securities of foreign companies. They attract foreign capital for investment. Is there is any tax applicable on the redemption of mutual funds? The tax applicable is called as STT i. Security transaction tax which is 0. STT is applicable only in case of redemption of equity linked schemes.

Growth Plan and Dividend Plan A growth plan is a plan under a scheme wherein the returns from investments are reinvested and very few income distributions, if any, are made. The investor thus only realises capital appreciation on the investment. This plan appeals to investors in the high income bracket. Under the dividend plan, income is distributed from time to time.

This plan is ideal to those investors requiring regular income. Dividend Reinvestment Plan Dividend plans of schemes carry an additional option for reinvestment of income distribution. This is referred to as the dividend reinvestment plan.

Under this plan, dividends declared by a fund are reinvested on behalf of the investor, thus increasing the number of units held by the investors. AIP allows the investors to plan their savings through a structured regular monthly savings program.

Redemption price is the price received on selling units of open-ended scheme. If the fund does not levy an exit load, the redemption price will be same as the NAV. The redemption price will be lower than the NAV in case the fund levies an exit load.

Repurchase price is the price at which a close-ended scheme repurchases its units. Repurchase can either be at NAV or can have an exit load. Some Mutual Funds provide the investor with an option to shift his investment from one scheme to another within that fund.

For this option the fund may levy a switching fee. Switching allows the Investor to alter the allocation of their investment among the schemes in order to meet their changed investment needs, risk profiles or changing circumstances during their lifetime.

Further, the Shut-Out period will also help in expeditious processing and despatch of dividend warrants. The Shut-Out period applies to new investors in the Scheme as well as to Unitholders making additional purchases of Units into an existing folio. The Trustee reserves the right to change the Shut-Out period and prescribe new Shut- Out period, from time to time. There is no lock-in period in the case of open-ended funds. However in the case of tax saving funds a minimum lock-in period is applicable.

The lock-in period for different tax saving schemes are as follows: Unit Trust of India was the first mutual fund which began operations in The performances of Mutual funds are influenced by the performance of the stock market as well as the economy as a whole. Equity Funds are influenced to a large extent by the stock market. The stock market in turn is influenced by the performance of the companies as well as the economy as a whole.

The performance of the sector funds depends to a large extent on the companies within that sector. Bond-funds are influenced by interest rates and credit quality. As interest rates rise, bond prices fall, and vice versa. Similarly, bond funds with higher credit ratings are less influenced by changes in the economy. Choice of any scheme would depend to a large extent on the investor preferences. For an investor willing to undertake risks, equity funds would be the most suitable as they offer the maximum returns.

Debt funds are suited for those investors who prefer regular income and safety. Gilt funds are best suited for the medium to long-term investors who are averse to risk. Balanced funds are ideal for medium- to long-term investors willing to take moderate risks. Liquid funds are ideal for Corporates, institutional investors and business houses who invest their funds for very short periods.

Tax Saving Funds are ideal for those investors who want to avail tax benefits. An important aspect while selecting a particular scheme is the duration of the investment. Depending on your time horizon you can select a particular scheme. Besides all this, factors like promoter's image, objective of the fund and returns given by the funds on different schemes should also be taken into account while selecting a particular scheme.

Receive Unit certificates or statements of accounts confirming your title within 6 weeks from the date your request for a unit certificate is received by the Mutual Fund. Receive information about the investment policies, investment objectives, financial position and general affairs of the scheme; 3. Receive dividend within 42 days of their declaration and receive the redemption or repurchase proceeds within 10 days from the date of redemption or repurchase 4.

The trustees shall be bound to make such disclosures to the unit holders as are essential in order to keep them informed about any information which may have an adverse bearing on their investments. An investor can send complaints to SEBI, who will take up the matter with the concerned Mutual Funds and follow up with them till they are resolved. However a fund's performance should be evaluated on the basis of a comparison with the relevant indices and alternative instruments. The NAV varies from fund to fund.

Therefore this argument is not entirely true. The order book reflects details of all the orders placed by you. Prior to the implementation of the SEBI guideline, an entry load of 2. As per the new guidelines issued by SEBI, with effect from August 1, , entry load will not be charged on purchases in existing mutual fund schemes or on schemes launched thereafter.

However, any investment made by you in an NFO which was launched prior to August 1, will continue to attract entry load and other charges as specified in the offer document. Exit Load varies for different schemes and is generally charged as a percentage of NAV. The Exit load normally varies between 0. Some mutual funds however do not charge any exit load. Such mutual funds are referred to as 'No Load Funds'.

SEBI Guidelines stipulate that with effect from August 1, ,there shall be no entry load for any Mutual Fund scheme whether existing or new. SEBI Guidelines further stipulate that investors will be required to pay upfront commission directly to distributors. This means that earlier if you invested Rs. However, while you will not be charged any entry load, you will have to pay 'Transaction charges' directly to your distributor as per the applicable fee structure.

Click here for more information on the I-Sec Fee structure. Effective Purchase Price is the sum of the NAV, transaction charges and service charges divided by the number of units purchased.

Let's say you purchased 1, MF units for Rs. If the transaction and service charges applicable are Rs. It is the price which you actually pay to purchase a single unit of a Mutual Fund Scheme. Entry load has been abolished only with effect from August 1, Any investment made by you in an NFO which was launched prior to August 1, will continue to attract Entry Load and other charges as specified in the offer document. Yes, just as in the secondary market, you will need to allocate funds for the purpose of investing in Mutual Funds.

Under the Modify Allocation option you would have a separate section for allocating money for Mutual Funds. Also the funds which are allocated for investments in Mutual Fund will not be allowed for transactions in the secondary market. Yes, while placing any mutual fund order, modify or cancel option would be available to you till the final confirmation of the order is placed by you.

Once you click on Final Confirmation you cannot modify or cancel the order placed by you. As soon as you confirm your order you can view the details of your transaction in the order book.

Also an email will be sent to your email address. Yes, you can transact at any time of the day. However, in order to get the applicable NAV for the current day you would have to transact before the cut-off time of the scheme.

If you place any order after the said cut-off time, you would be eligible for applicable NAV of the next day.

As per SEBI guidelines the cutoff time for accepting orders in Non-liquid funds is hrs and in Liquid funds it is hrs. In order to get the applicable NAV for the same day, you can purchase up to the cut-off time of the scheme, after which you will get the next day's applicable NAV. If the next day is a holiday, then the applicable NAV of the next working day. As decided by the fund, there is a minimum transaction amount indicated against each scheme.

You will get to see the minimum transaction amount in the Place Order screen. In order to invest in Mutual Fund, you will need to separately allocate funds for the same. This option is available to you in the Modify Allocation screen. After your first purchase you will not be permitted to transact for a period of 4 to 7 days depending on the processing time of the Mutual Funds' Registrar. After you place an investment order in any Mutual Fund for the first time a Folio Number is generated for that particular fund.

Until the Folio number is generated you will not be allowed to place any further orders for that particular Mutual Fund. After the Folio Number is generated you can place any number of order in any schemes of the Mutual Fund. Hence the processing time would be for each scheme of the Mutual Fund.

Suppose if you place an order for a Liquid Fund, then a folio number is generated for that scheme only and to place an order for the first time in a balanced fund you will have again wait till a new folio number is generated. You can contact any ICICI Centre to open accounts or fill in the application form on the web site and our Customer Service Executive will visit you for opening your e-invest account.

Once the processing of your form is completed, you can start investing in Mutual Funds online. You can transfer in your existing mutual fund units to your ICICIdirect account by filling a Transfer-in request form which is available on the site. However this facility of Transfer-in can be availed only if you're a sole holder in the physical units else your request cannot be processed. Fill in the existing folio number alloted for that scheme. In case of transfer-in of dividend schemes, the dividend re-investment option will by default be activated and will appear as "Y".

In case the dividend re-investment option as per your records is dividend pay-out "N", to change the dividend re-investment option you can use the modify dividend re-investment hyperlink. The units are converted to electronic form within 30 days.

You can check the status of your request the TI Book link. Once the units are converted into electronic form, the same will be updated in the Unit Holdings link. This will take you to all the schemes of the fund. The details of the scheme are indicated against each scheme. You can also select the option for dividend reinvestment through the purchase order screen. In case you are an NRI, first you need to decide is whether you want repatriation benefit or not.

No, you cannot purchase mutual fund units in the PINS account. You can only do so in the Non-Pins account. The details of your transactions will be immediately updated in your order book. This will display all the scheme units held by you, with details against each scheme.

You can either redeem a certain amount or specify the number of units held by you. There is a minimum transaction amount that is indicated against each scheme.

A cut off time is also displayed to get that day's NAV. TDS is not deducted on the sale proceeds for Resident Indians. You will find the complete details of the redemption including the TDS deducted. Click on the scheme you wish to Switch From. There is a minimum transaction amount indicated against the scheme. Also the scheme you wish to "Switch To" carries a minimum transaction amount. Therefore the amount which you will be switching will be higher of the two.

The details of your transactions will be immediately updated in your order book, an email will be sent showing the "Switch From" and "Switch To" units.

Since this does not involve any transfer of funds, your bank account will not be affected. Switch Out is treated as redemption. The gross amount after deducting the TDS will be used for switch in Transaction i. Select the fund name and the scheme. A screen will appear with the details of that scheme similar to that in the Purchase screen.

In addition to these details you will have to fill up the frequency with which the investments will be made and the start date. From the date specified a fixed amount will be debited to your bank account. You can however enter into only one plan per scheme. In case you do not have sufficient funds in your account in any specific month, the SIP would be rejected for that particular month. Select the option for "Systematic Withdrawal Plan".

A screen will appear with the details of that scheme similar to that in the Redemption screen. In addition to these details you will have to fill up the frequency with which the withdrawals will be made and the start date. From the date specified a fixed amount will be credited to your bank account. You will also receive an e-mail indicating that the plan has been scrapped. Yes, You can place your request even on a holiday. However, the request would be processed on the next business day and respective NAV would be applicable as per the Mutual Fund's offer document.

All the co-holders should sign this letter. Please ensure that the requested details should be updated in KRA before submitting this request. Please send the filled in form at the below address:. The Turn Around Time TAT for change in details is 15 working days from the date of receipt of documents at the corporate office.

ICICI Securities Ltd I-Sec will process the request on best effort basis within a reasonable time and I-Sec cannot be held responsible for any loss of documents or delay in processing of the request. For placing online request visit www. C Ind Area, M. Nomination details of your linked bank or demat account are not considered for your online mutual fund purchases.

Hence, you would be required to make a separate nomination request for your mutual fund folios. You can cancel your existing nomination at any time before you redeem your mutual fund units. If your legal heir is different from your nominee, your legal heir cannot dispute this action as transfer by the respective AMC s in favour of a Nominee acts as valid discharge by the AMC s against the legal heir of the deceased holder.

Investors in the Category of "Individuals" are permitted to make a nomination for their mutual fund units. Non-individuals including society, trust, body corporate, partnership firm, Karta of Hindu Undivided Family and a holder of Power of Attorney are not allowed to nominate.

You can nominate any individual as your nominee. However, you cannot nominate the following as your nominee with regard to your mutual fund units:. A non-resident Indian can be a nominee subject to the exchange controls in force, from time to time. You are permitted to nominate a minor. However, if you nominate a minor, do provide the name and address of the minor's guardian in the nomination request.

You can nominate only one person while placing purchase order in new Folio. However you may later give physical request letter for adding nominee. Maximum 3 nominees can be updated in a single folio. Once the nominee is updated in AMC records, it shall reflect in your mutual fund unit holdings page on the next working day based the report provided by the Mutual Fund Registrar.

In case your request is rejected, the reason s for such rejection will also be updated. Nomination made in your existing mutual fund folios will not be automatically updated for new folios created for fresh mutual fund purchases made by you. For all new folios, you will be required to make a separate nomination request.

Please fill in all the relevant details and send the duly signed form to the following address:. Juinagar Railway Station, Navi Mumbai - Hence you will have to route all your transactions including nomination related requests through www. Yes you can transfer your mutual fund unit holdings from one Match Account source Account to another Target Account , provided both the Match Accounts pertain to same holder s and the Source account should be in suspended status and Target Account should not be in suspended status.

Requirements of Internal Transfer: You need to close the existing Trading account before sending the Internal Transfer request. In case an internal transfer request is given with ongoing SIP in the source account, the same will be canceled. You may in future start a new SIP in the target account. If the folios are held in Joint Holding mode in source account then please ensure that the same joint holders are registered for mutual fund in the target account.

The folio numbers and the fund details to be correctly filled in the request letter. Documents required for Internal Transfer: Supporting Documents as mentioned in the instructions on the request letter. Please send the above documents at the below address: Requirements of Online Transfer In: The offline folios should be in the name of the Account holder of the icicidirect.

If the mode of holding in folio to be transferred in is joint then the online transfer in order should be placed by selecting the joint holder. The joint holder selected in Transfer in order should be same as the joint holder mentioned in the folio statement as per AMC records. The tax status of customer as per Online trading account should match with that mentioned in folio statement as per AMC records. If the customer has ongoing offline SIP in the folio, it should be cancelled before placing a transfer in request.

This is because, the offline SIP transactions done after transfer in will not be reflected in unit holdings of icicidirect. Once transfer in is done, the customer can start a SIP online.

If the customer has IPIN facility with AMC for the folio to be transferred in, he needs to cancel the same before applying for transfer in. Documents required for Transfer In: Latest folio statement for the folios to be transferred in containing holder's name,tax status, mode of holding.

Proof of Existing bank account that is registered in the folio. You may submit anyone of below documents: Original Canceled Cheque Leaf. Proof of New bank account that is linked to icicidirect. You may submit any one of the below documents: Few AMCs accept online Transfer in without the request letter. Please refer the instructions given at below path in the logged in session of IDirect account for more details.

The processing of online Transfer in without physical request is subject to matching of your signature given on IDirect account opening form with that recorded in AMC records at the time of initial purchase. Latest statement of holding for the Mutual Fund folio to be transferred. Once the order is submitted, option for printing the TI application will be available. Post printing the TI application, the account holder will have to submit the aforesaid forms duly signed as directed to the nearest ICICI Direct Store or on below mentioned address.

You can cancel your existing Transfer In request if the status of the same is 'Documents Awaited'. Incase customer is holding offline Mutual Fund folio jointly with co-holder, then the process of registration of jointholder in trading account for Mutual Fund product is to be followed before Transfer In. Registration of Joint holder in trading account and 'Transfer In' are sequential process , former has to happen before the latter can be initiated.

If bank mandate option is selected as 'Yes' then Bank proof is required for change in bank mandate in folio which is being transferred into your icicidirect. Incase of change of bank mandate, Bank Proof is required for both the below bank accounts:. Bank Proof is required for both the below bank accounts: Existing bank account that is registered in the folio. Bank account that is linked to icicidirect.