CHARLES SCHWAB, HONG KONG, LTD.

Charles Schwab, Hong Kong, Ltd.
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Glossary

A - B - C - D - E - F - G - H - I | J - R | S - Z

A
All or None Directs the broker to attempt to fill the entire amount of the order or none of it during the time limit you specify. This differs from "Fill or Kill" orders because "All or None" orders do not require immediate execution. Only applicable to Limit Orders.
American Depositary Receipt (ADR) Receipt for shares of foreign-based companies that entitle the shareholder to all dividends and capital gains. ADRs allow Americans to buy shares of foreign-based corporations' securities at American Exchanges instead of having to go to overseas exchanges.
Annuity An investment in which the policy holder makes a lump-sum or installment payment to an insurance company and receives income at retirement.
Ask The lowest price at which someone is willing to sell a security.
Average Maturity The lifetime of a bond, concluding when the final payment of that obligation is due.



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B
Back-end Load A fee charged by a mutual fund when you sell your shares.
Beta A statistical measure of a security's or portfolio's volatility (price fluctuations) relative to the market as a whole. (The beta of the overall market is defined as 1, and is represented by the S & P 500® Index over the last 36 months). A security with a beta of 1 indicates its price moves exactly with the overall market. A beta greater than 1 is more volatile than the overall market, while a beta less than 1 indicates that the security's price is more stable than the market (in general and over a long time period).
Bid The highest price at which someone is willing to buy a security.
Blue Chip Describes stocks of companies known for high quality management or products who have a long history of stable earnings and/or dividend growth.
Bond A long-term debt security of the Government or a corporation with maturity of 10 years or more from the issue date. Interest is usually paid every six months and its face value returned, repaid at maturity. The minimum denomination is $1,000, with $1,000 increments thereafter.
Buy Indicates you want to purchase a security.
Buy to Close You "close" a short option position when you buy it back. You must be pre-approved by Schwab to trade options. See Options.
Buy to Open You "open" a long position when you buy an option. You must be pre-approved by Schwab to trade options. See Options.


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C
Call Option Gives its buyer the right to buy 100 shares of the underlying security at a fixed price before a specified expiration date. Call buyers hope the price of the stock will rise. Call sellers hope the price will stay the same or go down. You must be pre-approved by Schwab to trade options. See Put Option.
Capital Appreciation The growth of the principal of your investments.
Capital Gain The difference in value between what you originally paid for an investment and the price at which it was sold, assuming the investment gained value.
Certificate of Deposit A type of debt instrument offered by banks or savings and loans. (Also, CDs can be brokered by a Broker Dealer). Generally, a CD is issued for a specific dollar amount, for a specific period of time at a preset, fixed interest rate. CDs are FDIC-insured up to $100,000.
Closed End Mutual Funds A mutual fund that issues a set number of shares, which then are only re-sold on the secondary market exchanges like regular stock shares. See Mutual Funds Glossary.
Common Stock An "equity" security. Common stock is "ownership" of a corporation. An owner of a company's common stock is considered to have an equity position in the corporate structure of that company.
Compounding The computation of interest paid, using the principal plus the previously earned interest. Compounding measures the growth of an investment when dividends or appreciation are reinvested.
Corporate Bond Debt obligations issued by corporations as an alternative to offering equity ownership by issuing stock. Like most municipal bonds and Treasuries, most corporate bonds pay semi-annual interest and promise to return their principal when they mature. Maturities range from 1 to 30 years.
Current Yield The annual interest on a bond divided by the current market price.
Custodial Account An account for the benefit of a minor with an adult as the custodian.


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D
Day Order Automatically expires at the end of the day's standard market trading session if it is not filled. All Market Orders are automatically Day orders. Orders are generally considered to be day orders unless otherwise specified.
Defined Benefit Plan A company retirement plan in which you expect to receive a fixed amount on a regular basis from your employer, i.e. a pension. The employer is responsible for investing.
Dilution Effect on earnings per share and book value per share if all convertible securities were converted and all warrants and stock options were exercised.
Distribution The income or capital gain made by a mutual fund that is paid to the fund's investors.
Diversification The allocation of assets among various types of investments.
Dividend Amount Value of last quarterly cash dividend or the number of shares an investor receives for each share owned in a stock dividend.
Dividend Reinvestment An investment plan in which you can elect to automatically reinvest cash dividends and capital gains distributions, thereby accumulating more shares.
Dollar Cost Averaging Buying securities at scheduled intervals at with the same dollar amount.
Do Not Reduce (DNR) Instructs the broker not to reduce your limit price by the amount of the cash dividend when a stock goes ex-dividend and the market price is reduced by the amount of the dividend. You can specify DNR on Limit Orders to Buy, Stop Orders to Sell, or on Stop Limit Orders to Sell.
Dow Jones Industrial Average (DJIA) Measure of the performance of the collection of 30 "blue-chip" stocks traded on the New York Stock Exchange (NYSE), considered the leaders of the market.


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E
Earnings Per Share (EPS) A company's earnings, also known as net income or net profit, divided by the number of shares outstanding. Calculation tip: Four times the last quarter's earnings divided by the number of shares outstanding.
Earnings Per Share Date Date of the last earnings announcement.
Electronic Funds Transfer Transferring funds between accounts and firms electronically.
Ex-Dividend Date Date a split or dividend is reflected in the price of the security (if you buy a stock on the ex-dividend date, you are not entitled to the dividend); for splits, this is the trading day after the distribution is made.
Exchange Traded Funds Exchange Traded Funds (ETFs) are index funds or trusts that are listed on an exchange each with a unique symbol and can be traded through a broker any time during market trading hours. ETFs allow investors to buy or sell shares in the collective performance of an entire stock portfolio or index as a single security. Most ETFs can be traded as little as one share and can even be sold short or bought on margin.


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F
Face Value The displayed value on a bond also called principal or par value.
Fiduciary One is legally required to act in the best interest and trust of a beneficiary or minor.
Fill or Kill (FOK) Instructions that your order must immediately be filled in its entirety or canceled. Only applicable to Limit Orders.
Fixed Income Securities Debt securities or IOUs for borrowed money. They obligate the borrower to pay the owner interest during the term of the loan and to return the principal or face value, when the loan matures. A variety of institutions issue debt obligations including the U.S. government, state and local governments, publicly held companies, banks, and savings and loans.


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G
GNMA (Ginnie Mae) A bond issued by the Government National Mortgage Association.
Good 'Til Canceled (GTC) At Schwab, GTC orders remain open for 60 calendar days unless filled or you request that it be canceled before that time.
Government Bond A bond issued by the U.S. Treasury or other agency.


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H
High The highest execution price of a trade that day, or on the last trading day.


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I
Immediate or Cancel Instructions to immediately fill your order either partially or entirely -- or cancel the order. Only applicable to Limit Orders on listed stocks.
Index Mutual Funds Mutual funds that seek to replicate the performance of established securities indices. Indexes are unmanaged, do not incur management fees, costs and expenses and cannot be invested in directly.
Indexing Investing for market returns by purchasing shares in an index fund.

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