Investing glossary (plain-English guide)

New to investing? Here’s a quick, no-jargon glossary of terms you’ll see in the app and in documents. 

• Bid-ask spread
  • The difference between the highest price a buyer is willing to pay and the lowest price a seller is willing to accept. A wider spread can mean a higher cost to trade.
• Bond
  • A bond is a loan you give to a government or company. In return, you usually receive interest and get your money back at maturity, unless the issuer cannot repay.
• Contract note   
  • A contract note is your official trade confirmation. It shows what you bought or sold, the price, fees, and settlement date.
• Corporate action
  • A corporate action is an event that affects an investment you hold, such as a dividend, share split, rights issue, or merger.
• Custody
  • Custody is how your investments are held and safeguarded on your behalf by a regulated provider.
• Dividend
  • A dividend is a payment a company or fund may make to investors, usually in cash and sometimes as additional shares.
• ETF (Exchange-Traded Fund)
  • An ETF is a fund that holds a mix of investments, such as shares or bonds, and trades on an exchange like a share.
• Exchange
  • An exchange is a marketplace where investments such as shares, ETFs, and bonds are bought and sold.
• Ex-date (ex-dividend date)
  • The ex-date is the cut-off date for receiving the next dividend. If you buy before this date, you are usually entitled to it. If you buy on or after it, you usually are not.
• Factsheet
  • A factsheet is a short summary from the provider that outlines an investment’s objective, holdings, past performance, costs, and benchmark.
• Fund (mutual or unit trust)
  • A fund pools money from many investors and invests it across a range of assets. Unlike shares, many funds are priced once a day.
• FX / Currency conversion
  • Currency conversion means exchanging one currency for another, for example from EUR to USD. The exchange rate and any fees will affect the final amount you receive.
• Instrument
  • An instrument is a general term for an investment that can be bought or sold, such as a share, bond, or ETF.
• ISIN
  • An ISIN is a 12-character international identification code used to identify a specific investment.
• KID / KIID
  • A KID or KIID is a short standardised document designed to help retail investors understand an investment’s objectives, risks, and costs.
• Limit order
  • A limit order lets you buy or sell at a price you choose, or better. It gives you more price control, but the trade may not happen if the market does not reach that price.
• Liquidity
  • Liquidity describes how easily an investment can be bought or sold without significantly affecting its price. Higher liquidity usually means trading is easier.
• Market cap
  • Market capitalisation, or market cap, is the total market value of a company’s shares. It is calculated by multiplying the share price by the number of shares.
• Market order
  • A market order tells the market you want to buy or sell as soon as possible at the best available price. It prioritises speed over price certainty.
• NAV (Net Asset Value)
  • NAV is the per-unit value of a fund, based on the value of its underlying holdings minus liabilities. It is usually calculated once per day.
• Pay date
  • The pay date is the date a dividend is actually paid to eligible investors.
• Prospectus
  • A prospectus is the main legal document for a fund or investment offering. It explains how it works, the risks, the fees, and other important details.
• Remittance advice
  • A remittance advice confirms that money has been sent to a bank account. It usually shows the amount, value date, and payment reference.
• Rights issue
  • A rights issue gives existing shareholders the chance to buy additional shares, usually at a discounted price, within a limited time period.
• SEDOL / CUSIP
  • SEDOL and CUSIP are local identification codes used in some markets to identify investments. SEDOL is commonly used in the UK, and CUSIP in the US.
• Security
  • A security is another general term for an investment that can be bought or sold.
• Settlement
  • Settlement is the point at which cash and investments are officially exchanged after a trade.
• Share / Stock
  • A share, also called a stock, represents a small ownership stake in a company.
• Slippage
  • Slippage happens when the price you get is different from the price you saw when placing the trade. This can happen in fast-moving or less liquid markets.
• Split / Reverse split
  • A split or reverse split changes the number of shares you hold and the price per share, without changing the total value of your holding at that moment.
• T+1 / T+2
  • T+1 or T+2 means settlement takes place 1 or 2 business days after the trade date, depending on the market and instrument.
• Tax statement
  • A tax statement is a summary of reportable income and gains, such as dividends, interest, and realised gains or losses, for your records or tax reporting.
• Ticker (symbol)
  • A ticker, or symbol, is the short code used to identify a share, ETF, or other investment on an exchange, for example AAPL.

Some terms may vary slightly depending on the investment, market, or document you’re looking at. If you’re unsure about a term you see in the app, contact Support before placing a trade.