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You are Here : Home > Investor Education > Glossary

Glossary to investment terminology : L

 
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Large Cap
This is short for €˜Large Market Capitalization' and is a term used to refer to companies with a very high market capitalization value.

Last Day to Register
This is the last day by which securities need to be registered with the issuer's office so as to qualify to receive dividends, rights or bonus shares. It is also known as the books closing date.

Lien
This is when a creditor or bank has legal claim against assets e.g. shares, which have been used as collateral to secure a loan. The lien terminates as soon as the loan is paid off.

Limit Order
A limit order is one placed by an investor with a stockbroker to buy a specified number of shares at or below a specified price or to sell a specified number of shares at or above a specified price. A limit order ensures that an investor will not pay more for the shares than the price they have set as the limit and neither will an investor receive less than they are willing to accept. It is a very common type of order.

Liquidation
This is the winding up of the business of a company either due to bankruptcy or through a resolution passed by its shareholders when the purpose of the company has been fulfilled. The company's assets are sold and the proceeds pay creditors. Any money remaining thereafter is distributed amongst the shareholders.

Liquidity
This is the ability of an asset e.g. shares, to be bought or sold without affecting its price. Liquid assets are those that can be easily bought or sold without any significant change in price. Such assets are normally characterized by a high level of trading activity. A company which has issued a large number of shares is said to have liquid stock in the market. Investors find it safer to buy such stock because it is easier to get their money out of the investment if they need to do so.

Listed Shares (Listed Company)
These are shares that have been registered by a recognized and regulated stock exchange to be traded on its trading floor. Shares can be listed on more than one stock exchange.

Listing Requirements
Listing requirements are a set of conditions and standards that are imposed by the stock exchange upon companies that want to be listed on that exchange. A company wishing to issue its stock on the exchange must therefore meet these requirements and continue to do so for as long as they are on the exchange. Examples of listing requirements include minimum number of shares outstanding, minimum market capitalization and minimum annual income.

Long
It is also referred to as long position. This is the state of actually owning stock with the expectation that the asset will rise in value. One is said to have a €˜long position' in a company if he/she owns shares in that company.

Long Squeeze
A long squeeze occurs when the value of a stock drops in price thereby inciting further selling by more shareholders to avoid incurring dramatic loss. A long squeeze ends when the price falls to a point deemed to be too low then more investors come in to buy the stock and the price rises again.