Similar financial terms
Mortgage-Backed Securities Clearing CorporationA wholly owned subsidiary of the Midwest Stock Exchange that operates a clearing service for the comparison, netting, and margining of agency-guaranteed MBSs transacted for forward delivery.
Market clearing
Total demand for loans by borrowers equals total supply of loans from lenders. The market, any market, clears at the equilibrium rate of interest or price.
British clearers
The large clearing banks that dominate deposit taking and short-term lending in the domestic sterling market.
Clear
A trade is carried out by the seller delivering securities and the buyer delivering funds in proper form. A trade that does not clear is said to fail.
Clearing House Automated Payments System (CHAPS)
A computerized clearing system for sterling funds that began operations in 1984. It includes 14 member banks, nearly 450 participating banks, and is one of the clearing companies within the structure of the Association for Payment Clearing Services (APACS).
Clearing House Interbank Payments System (CHIPS)
An international wire transfer system for high-value payments operated by a group of major banks.
Clearing member
A member firm of a clearing house. Each clearing member must also be a member of the exchange. Not all members of the exchange, however, are members of the clearing organization. All trades of a non-clearing member must be registered with, and eventually settled through, a clearing member.
Clearing House
An adjunct to a futures exchange through which transactions executed its floor are settled by a process of matching purchases and sales. A clearing organization is also charged with the proper conduct of delivery procedures and the adequate financing of the entire operation.
Austraclear
An Australian computerised settlement and safe custody system for bills of exchange and cash transactions. The Austraclear system is a real-time system which members access from their premises. Austraclear records trades and changes of ownership and removes the need for bills of exchange or cash to physically change hands.
Overnight position
Trader's long or short position in a currency at the end of a trading day.
Take a position
To buy or sell short; that is, to have some amount that is owned or owed on an asset or derivative security.
Short position
Occurs when a person sells stocks he or she does not yet own. Shares must be borrowed, before the sale, to make "good delivery" to the buyer. Eventually, the shares must be bought to close out the transaction. This technique is used when an investor believes the stock price will go down.
Position diagram
Diagram showing the possible payoffs from a derivative investment.
Position
A market commitment; the number of contracts bought or sold for which no offsetting transaction has been entered into. The buyer of a commodity is said to have a long position and the seller of a commodity is said to have a short position .
Open position
A net long or short position whose value will change with a change in prices.
Modigliani and Miller Proposition II
A proposition by Modigliani and Miller which states that the cost of equity is a linear function of the firm's debt/equity-ratio.
Modigliani and Miller Proposition I
A proposition by Modigliani and Miller which states that a firm cannot change the total value of its outstanding securities by changing its capital structure proportions. Also called the irrelevance proposition.
Long position
An options position where a person has executed one or more option trades where the net result is that they are an "owner" or holder of options (i. e. the number of contracts bought exceeds the number of contracts sold). Occurs when an individual owns securities. An owner of 1,000 shares of stock is said to be "Long the stock."
Limitation on asset dispositions
A bond covenant that restricts in some way a firm's ability to sell major assets.
Changes in Financial Position
Sources of funds internally provided from operations that alter a company's cash flow position: depreciation, deferred taxes, other sources, and capital expenditures.
Composition
Voluntary arrangement to restructure a firm's debt, under which payment is reduced.
Position liquidation
The closing out of a long position. The term is sometimes used to denote closing out a short position, but this is more often referred to as covering.
