For example , the holder of a call ( put ) option has the right , but not the obligation , to buy ( sell ) a financial instrument ( e.g. a bond or share ) at a given price at a specified time in the future .

Repo operation a liquidity providing reverse transaction based on a repurchase agreement .

Repurchase price the price at which the buyer is obliged to sell back assets to the seller in relation to a transaction under a repurchase agreement .

If more than one price is quoted , the lowest of these prices ( normally the bid price ) is used

If more than one price is quoted , the lowest of these prices ( normally the bid price ) is used .

Purchase date the date on which the sale of purchased assets by the seller to the buyer becomes effective .

Repurchase price the price at which the buyer is obliged to sell back assets to the seller in relation to a transaction under a repurchase agreement .

If more than one price is quoted , the lowest of these prices ( normally the bid price ) is used

If more than one price is quoted , the lowest of these prices ( normally the bid price ) is used ,

Reserve base the sum of the balance sheet items which constitute the basis for calculating the reserve requirement of a credit institution .

The price agreed upon is called the delivery price, which is equal to the forward price at the time the contract is entered into.

Such an agreement is similar to collateralised borrowing , with the exception that ownership of the securities is not retained by the seller .

The repurchase price equals the sum of the purchase price and the price differential corresponding to the interest on the extended liquidity over the maturity of the operation .

cECB The implementation of monetary policy in the euro area February 2005 83

Article 25 Obligation for investment firms to make public firm bid and offers

On the assets side of the balance sheet , holdings of securities may be recorded using market price , purchase price , the lower of market or purchase price or redemption value in accordance with standard accounting practice .

If delivery does take place , the purchase or sale entry shall be made at market price .

( 13 ) Limit order means an order to buy or sell a financial instrument at its specified limit or better

If delivery does take place , the purchase of sale entry shall be made at market price .

A payment balance leading to an inflow shall affect the average cost of the currency when the payment is due .

If the stock price at expiration is below the exercise price by more than the premium paid, he will profit.

( 12 ) Market order means an order to buy or sell a financial instrument at the best available price

If delivery does take place , the purchase or sale entry shall be made at market price .

In such a contract , the purchase or sale of an interest rate instrument , e.g. a bond , is agreed on the contract date to be delivered at a future date , at a given price .

Forward transactions in securities shall mean over the counter contracts in which the purchase or sale of an interest rate instrument ( usually a bond or note ) is agreed on the contract date to be delivered at a future date , at a given price .

Repurchase price the price at which the buyer is obliged to sell back assets to the seller in relation to a transaction under a repurchase agreement .

The repurchase price equals the sum of the purchase price and the price differential corresponding to the interest on the extended liquidity over the maturity of the operation . Reserve account an account with the central bank on which a counterparty 's reserve holdings are maintained .

If the stock price(spot Price,S) at expiration is above the exercise price(X) by more than the premium (price) paid P, he will profit i.e.

Liability shall mean a present obligation of the enterprise arising from past events , the settlement of which is expected to result in an outflow from the enterprise of resources embodying economic benefits .

Option a contract that provides the holder the right , but not the obligation , to buy or sell a specific amount of a given stock , commodity , currency , index , or debt , at a specified price during a specified period of time or on the date of expiration .

Provisions shall mean amounts set aside before arriving at the profit or loss figure in order to provide for any known or expected liability or risk , the cost of which cannot be accurately determined ( see Reserves ) .

Mid market price shall mean the mid point between the bid price and the offer price for a security based on quotations for transactions of normal market size by recognised market makers or recognised trading exchanges . Premium shall mean the difference between the par value of a security and its price when such price is higher than par .

The repurchase price equals the sum of the purchase price and the price differential corresponding to the interest on the extended liquidity over the maturity of the operation . Reserve account an account with the national central bank on which a counterparty 's reserve holdings are maintained .

Pre fixed coupon a coupon on floating rate instruments which is determined on the basis of the values taken by the reference index on a certain date ( or dates ) before the start of the coupon accrual period . Purchase date the date on which the sale of purchased assets by the seller to the buyer becomes effective .

The repurchase price equals the sum of the purchase price and the price differential corresponding to the interest on the extended liquidity over the maturity of the operation . Reserve account an account with the national central bank on which a coun terparty 's reserve holdings are maintained .

Balance of payments ( b.o.p. ) a statistical statement that summarises , for a specific period of time , the economic transactions of an economy with the rest of the world .

M2 an intermediate monetary aggregate that comprises M1 plus deposits redeemable at a period of notice of up to and including three months ( i.e. short term savings deposits ) and deposits with an agreed maturity of up to and including two years ( i.e. short term time deposits ) held with MFIs and central government .

Implied volatility a measure of expected volatility ( standard deviation in terms of annualised percentage changes ) in the prices of , for example , bonds and stocks ( or of corresponding futures contracts ) , which can be extracted from option prices . 222

The size of the bid offer spread in a security is one measure of the liquidity of the market and of the size of the transaction cost.

Haircut Bond A FRN B Bond C

Bond A FRN B Bond C

M2 an intermediate monetary aggregate that comprises M1 plus deposits redeemable at a period of notice of up to and including three months ( i.e. short term savings deposits ) and deposits with an agreed maturity of up to and including two years ( i.e. short term time deposits ) held with MFIs and central government .

Implied volatility the expected volatility ( i.e. standard deviation ) in the rates of change of the price of an asset ( e.g. a share or a bond ) . It can be derived from the asset 's price , maturity date and exercise price of its options , as well as from a riskless rate of return , using an option pricing model such as the Black Scholes model .

In November 2003, Novell acquired SuSE, a developer of a leading Linux distribution, which led to a major shift of power in Linux distributions.

A reverse sale and repurchase agreement ( reverse repo ) is a contract under which a holder of cash agrees to the purchase of an asset and , simultaneously , agrees to resell the asset for an agreed price on demand , or after a stated time , or in the event of a particular contingency . Sometimes a repo transaction is agreed via a third party ( triparty repo ) .