Glossary — C

We have learned all about 'B', now it is time to discover what 'C' is all about!"

Candlesticks

Candlesticks are a way to show the price movement of a stock, currency, or other investment over a certain time period. They are called candlesticks because they look like candles on a chart. Here is how to read a candlestick:

• The body of the candle shows the opening and closing prices.
• If the body is green or white, the investment went up.
• If the body is red or black, the investment went down.
• The wicks show the highest and lowest prices during that time period ( Check out `W' to learn more about wicks)

Candlesticks help you see patterns and trends in price movements, making it easier to make informed investment decisions. Think of it like a snapshot of an investment's performance over a certain time frame! Candlestick Chart Definition and Basics Explained

Consolidation

Consolidation refers to a period when the price of an investment moves within a narrow range, without making any significant progress up or down. It is like a pause in the market. Imagine a ball bouncing up and down in a small box:

• The ball (price) is moving, but it is not going anywhere new
• It is stuck in a small range (the box)

Consolidation can be a sign that the market is:

• Taking a break before a big move
• Deciding which direction to go next
• Absorbing news or events before reacting

It is a time of uncertainty, but also a potential opportunity to prepare for the next big move! Consolidation: Definition, Meaning, Example, and How It Works CONTRACT FOR DIFFERENCES (CFD) A Contract for Difference (CFD) is a financial instrument that allows you to invest on the price movement of an asset (like a stock, commodity, or currency) without actually owning it. Here is how it works:

• You enter into a contract with a broker to exchange the difference in the asset's price between the time you open and close the contract.
• If the price goes up, you profit from the difference.
• If the price goes down, you lose the difference.

CFDs are like betting on the direction of an asset's price movement, without actually buying or selling the asset itself. They offer flexibility and leverage, but also come with risks, so it is essential to understand them well before investing! Think of it like a wager on the price change, without owning the underlying asset! What Is a Contract for Differences (CFD)?

Capital Gain

Capital gain is like a profit bonus when you sell something for more than you bought it for! For example:

• Imagine you bought a cool pair of sneakers for R500 and later sold them for R700 because they became super popular.
• The R200 difference is like a profit bonus, and that is basically what capital gain is!

When you invest in things like stocks, property, or even collectibles, and their value increases over time, you get a capital gain when you sell them for a higher price than you bought them for. (It is like earning a reward for holding onto something valuable!) Just remember, capital gain is like a bonus, but you might need to share some of it with the government as taxes. But hey, it is still a win! Capital Gains: Definition, Rules, Taxes, and Asset Types

Commodities

Commodities are the raw materials that are used to make the things we buy and use. They are like the "ingredients" of the products we love! Think of a few things you may own, like:

• Your smartphone (made with metals like copper and silver)
• Your favourite snack (made with wheat, corn, or soybeans)
• Your clothes (made with cotton or wool)
• Your favorite video game console (made with metals and minerals)

All of these things are made with commodities! They are the basic materials that are used to create the products we use every day. Investing in commodities is like investing in the building blocks of our daily lives. It is a way to put your money into the things that make the things we need and want. What Are Commodities and Understanding Their Role in the Stock Market

Convertible Preferred Shares

These are shares that can be converted into another type of share, such as an ordinary share or preference shares. (Think of convertible preferred shares like a ticket that can be traded for a different ticket.)

• You buy a special ticket (preferred share) that gives you a guaranteed benefit (like a fixed dividend).
• But, you also have the option to trade this ticket for a different ticket (common stock) if you think it will be more valuable in the future.

So, it is like having a safe choice (preferred share) with the potential to switch to a more exciting choice (common stock) if you want to! Understanding Convertible Preferred Shares

Compound Interest

Compound interest is like a bonus that builds on itself!

• You lend someone money (or invest in something).
• They promise to pay you back with interest, just like simple interest.
• But, the next time interest is added, it is calculated on the new total (original amount + previous interest).
• This creates a snowball effect, where the interest earns interest, and grows faster and faster!

For example: You borrow R1000 at a compound interest rate of 5% per annum (per year), you will pay R50 on the first year. In the second year however, you will pay interest on the original principle amount, plus on the R50 in the interest you paid in the first year, for a total of R52,50 in interest in the second year. Compound Interest: Calculations and Examples COMPOUND REWARDS (ICP) Compound Rewards is a reward system designed to give our Contributing Partners exceptional rewards for funding our developments. It is calculated on every monthly contribution to your (ICP) Portfolio. For example: If you contribute R1,000 at a reward rate of 9% in August, you will receive R90.00 in rewards. The following month if you contribute R3,000 at a reward rate of 9%, you will receive R270.00 in rewards. To learn more about the ICP, click the link here! CERTIFICATES OF DEPOSIT (CD's) A Certificate of Deposit (CD) is a type of savings account that:

• Locks your money for a fixed time (E.g, 6 months to 5 years)
• Earns a fixed interest rate, higher than a regular savings account
• Promises to return your money with interest at the end of the fixed time

It is like a savings account with a guaranteed return, but you must keep your money in it for the agreed-upon time! What is a certificate of deposit (CD) and what can it do for you? Now that we have completed the `C's', keep your eyes open for when we start with the investment terms starting with `D'! Share this post: Categories STIOSTM: Terminology Sign up for blog updates! Join my email list to receive updates and information. Email address

• Sign up

Recent Posts

• "A" 11 Nov 2024 "B" 11 Nov 2024 "D" 11 Nov 2024