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Financial lexicon

Back office

A set of administrative procedures (confirmation of orders, cash settlements, delivery of securities) for stock exchange operations concluded by the dealing floor.

Balance sheet

The balance sheet describes a company's financial situation at a given time in the light of the company's assets and liabilities. Liabilities comprises a comprises all the financial resources available to the company, whereas the assets represent the way in which a company has uses these resources.

Base point

A base point corresponds to 0.01%, so if interest rates increase by 100 base points, that means they rise by 1%.

Bearer shares

Shares that do not mention the owner's name in the company registers (in contrast to the registered share).

Bearish

Security or market marked by a tendency to fall, as opposed to Bullish, which means the exact opposite.

Bel20

Brussels Stock Exchange index comprising 20 of the most important securities that are also the most representative of the Belgian market. The sample reflects a general trend on the basis of a restricted number of securities.

Benchmark

Portfolio reference. For example, a manager who has the Dow Jones as benchmark will seek to do better than this index.

BEP ( Break even price )

The break even price (BEP) is a general term in the financial world, but can be calculated in different ways.

The break even price (BEP) of a position is the price at which you should sell the position to obtain your initial capital back , taking into account transactions (purchases / sales) you made in the past. This means that the BEP of a particular security will decrease if you sell a portion of your position in that stock with a profit. Conversely, the BEP of a position will increase if you sell a part of the position with a loss.
The BEP doesn't take commissions into account.

Beta

Coefficient measuring a share's volatility in relation to the entire market. When a share's beta is higher than 1, the share is said to be aggressive, which means it is more volatile than the market in general.

Bid

Posted price at which a buyer is prepared to take a security.

Black & Scholes

Options assessment model created in 1973 by Fischer Black and Myron Scholes. The main conditions of utilisation are as follows: the model is adapted to European-style options and no dividends are paid out.

Blue Chip

Term for high-yield, low-risk securites. A high investment quality both in terms of capitalisation and the level of transactions. Example : IBM.

Bond

Instrument representing a company's or government's liabilities. There are several types of bonds but they all have one thing in common: the payment of interest (coupon) in exchange for the loan made by the investor.

Bracket

The gap between the first seller and the first buyer in the context of book-building. The wider the bracket, the more a security is illiquid.

Brokerage

Commission remunerating the stockbroking firm or financial intermediary for executing a stock exchange order.

Bullish

Security or market marked by a tendency to rise, as opposed to bearish, which means the exact opposite.

Buy for a rise

A speculative operation on the market by an investor who expects prices to rise. The investor may not have the capital required to settle the latter's position but nonetheless buys securites in hopes of reselling in the same stock exchange month for a profit.