Apr 18, 2016
- Complete the sentences below. Use the key words if necessary.
- Investors
key words
Stock markets are measured by (or indices), such as the Dow Jones Industrial Average (DJIA) in New York, and the FTSE 100 index (often called the Footsie) in London. These indexes show changes in the average prices of a selected group of important stocks. There have been several stock market crashes when these indexes have fallen considerably on a single day (e.g. ‘Black Monday’, 19 October 1987, when the DJIA lost 22.6%).
Financial journalists use some animal names to describe investors:
• are investors who expect prices to rise
• are investors who expect them to fall
• are investors who buy new share issues hoping that they will be . This means they hope there will be more demand than available stocks, so the successful buyers can immediately sell their stocks at a profit.
A period when most of the stocks on a market rise is called a . A period when most of them fall in value is a .
Dividends and capital gains
key words
Companies than either pay a to their stockholders, or their by keeping the profits in the company, which causes the value of the stocks to rise. Stockholders can then make a — increase the amount of money they have — by selling their stocks at a higher price than they paid for them. Some stockholders prefer not to receive dividends, because the tax they pay on capital gains is lower than the income tax they pay on dividends.
When an investor buys shares on the secondary market they are either , meaning the investor will receive the next dividend the company pays, or , meaning they will not. Cum div share prices are higher, as they include the estimated value of the coming dividend.
Speculators
key words
Institutional investors generally keep stocks for a long period, but there are also — people who buy and sell shares rapidly, hoping to make a profit. These include — people who buy stocks and sell them again before the . This is the day on which they have to pay for the stocks they have purchased, usually three business days after the trade was made. If day traders sell at a profit before settlement day, they never have to pay for their shares.
Day traders usually work with on the internet, who charge low — fees for buying or selling stocks for customers. Speculators who expect a price to fall can , which means agreeing to sell stocks in the future at their current price, before they actually own them. They then wait for the price to fall before buying and selling the stocks. The opposite — a — means actually or other asset: that is buying it and having it recorded in one’s account. - Make word combinations using a word or phrase.
- make . . .
- a capital gain
- earnings
- make . . .
- a profit
- dividend
- own . . .
- securities
- earnings
- pay . . .
- a dividend
- a capital gain
- pay . . .
- tax
- a profit
- receive . . .
- a dividend
- tax
- retain . . .
- dividends
- earnings
- take . . .
- a profit
- a position
- Use the correct word from the boxes to complete the sentences below.
- box 1
1. I less on capital gains than on income. So as a shareholder, I prefer not to a . If the company its , I can a by selling my shares at a profit instead.
box 2
2. Day trading is exciting because if a share price falls, you can a by a short . But it’s risky selling that you don’t even .
- Investors
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