| LCH |
See
London Clearing
House. |
| LIBID |
See
London Inter Bank Bid
Rate. |
| LIBOR |
See
London Inter Bank
Offered Rate. |
| LIFFE |
The London
International Financial Futures and Options Exchange. A
recognised investment
exchange and the main
derivatives
exchange in the UK. Trades derivatives in
equities,
bonds, interest
rates, indices and commodities. |
| LIMEAN |
See
London Inter Bank Mean
Rate. |
| LME |
London Metal
Exchange. The UK derivatives exchange which trades metal
futures and
options, e.g.
copper futures. LME is the largest world exchange for base metal
derivatives. |
| LSE |
See
London Stock
Exchange. |
| Large
Exposure Requirement (LER) |
A component of
the financial resources requirement for
ISD
firms. |
| Last Trading
Day |
The last day on
which a derivatives
contract may
be traded. |
| Lender of
Last Resort |
A description
of the Bank of
England, indicating that the Bank is prepared in the
money markets
to provide cash and liquidity to the market by means of repurchasing
bills. |
Lending
back to top |
An example of a
‘carry’ which takes place on the
LME, this is
the sale of near-dated futures and purchases of longer dated
futures. On other markets such an
intramarket
spread trade it is known as ‘selling the spread’. |
| Less Liquid
SEAQ Securities |
A
SEAQ stock with a
normal market size of 1,000 or 500. Since these
securities have
less liquid trading than other SEAQ securities, details of trades done by
market makers
in such stocks are not normally displayed on SEAQ. This enables the market
maker to cover his position in the stock. See also
Maximum Publication
Level and Block
Trades. |
| Lesser SEAQ
Size |
The quantity of
shares up to which a reduced size
market maker
must be prepared to deal in stocks in which they are registered. It is usually
50% of the Normal
Market Size. |
| Letter of
Acceptance |
Also known as a
letter of allotment. Where an investor applies for shares on a new issue and
his application is successful, he will receive a letter of acceptance as
evidence of his ownership of the shares in the short term. |
| Letter of
Allotment |
See
Letter of
Acceptance. |
| Leverage |
See
Gearing. |
| Liabilities |
Financing
provided to a business by third parties other than shareholders. Major examples
include trade creditors (suppliers who sell goods to the company on credit) and
bank loans and overdrafts. See also
Balance
Sheet. |
| Limit (Up or
Down) |
The maximum
price advance or decline from the previous day’s closing price permitted
by exchange rules. See also
Price
Limit. |
Limit
Order
back to top |
On SETS, a
limit order will be matched with an opposite order at the same price or better
during automatic matching. Limit orders are the only order which
can remain on the order book awaiting a matching order. On the
derivatives
market, in a limit order the customer stipulates the worst price that he will
accept. On a buy order the limit indicates the highest price the customer is
willing to receive, e.g. 99.50 bid for 10 contracts means that the customer
will be willing to pay no more than 99.50 per contract. Such orders may not be
filled if the limit is outside of the prevailing market trading range, e.g. if
in the example above, the market is trading at 100-102. |
| Limit or MOC
Order |
Limit or market on close, an order
type. Refers to an order which may be filled at or better than the limit during
the trading day, but which if not already traded must be filled at the
prevailing market price during the official
closing
period. |
| Limited Liability |
See
Equity
Shares. |
| Liquidator |
The person
responsible for winding
up a company, converting its
assets into cash
and distributing those assets to investors according to a legally defined
priority, starting with creditors and ending with ordinary
shareholders. |
| Listed
Company |
See
Official
Listing. |
| Listed Money
Market Institution |
An institution
undertaking transactions in the
money markets
and satisfying the criteria laid down by the
FSA for listing.
With respect to their money market activity, such institutions are exempt from
authorisation. |
| Listing
Agent |
See
Sponsor. |
| Listing
Rules (The) |
Also known as
the Yellow
Book. The rules of the Stock Exchange to which companies must adhere in
order to obtain and keep a listing. |
| Lloyds |
Lloyds of
London; an insurance market, exempt from authorisation under the
Financial Services
Act 1986. |
Local
back to top |
Private trader
operating on an exchange floor, whose activities help provide liquidity. Locals
lease trading rights from those exchange members who do not themselves need the
use of all of the trading rights they have been allocated as part of their
shareholding in the exchange. |
| London
Clearing House (LCH) |
A
Recognised Clearing
House (RCH) under the FSA, and is responsible for the
clearing and
settlement of derivative transactions effected on
LIFFE,
LME and
IPE, and also
securities transactions on
Tradepoint. |
| London Code
of Conduct |
The Conduct of
Business Rules issued by the FSA with respect to the wholesale
money currency
markets. See also Grey Book. |
| London Gold
Fix |
The open fixing
of a price for gold which takes place twice a day in London, and is effected by
a foundation of five members under the chairmanship of N.M.
Rothschilds. |
London Inter
Bank Bid Rate
back to top |
Known as LIBID.
The rate at which leading banks offer to take deposits on the Euromarkets from
other leading banks. See also
London Inter Bank
Offered Rate and London Inter Bank Mean Rate. |
| London Inter
Bank Mean Rate |
Known as
LIMEAN. The average of LIBOR and
LIBID. |
| London Inter
Bank Offered Rate |
Known as LIBOR.
The rate at which leading banks offer to make deposits on the Euromarkets with
other leading banks. See also
London Inter Bank Bid
Rate and London
Inter Bank Mean Rate. |
| London Metal
Exchange (LME) |
A base metal
derivatives
exchange; a recognised
investment exchange. |
| London
Silver Fix |
A similar
process to the gold fix. The silver fix takes place once a day. |
| London Stock
Exchange (LSE) |
The principal
London exchange for equity and
bond trading; a
recognised investment
exchange. |
| Long
(Position) |
Any position
which has been purchased. For example, a long futures position means that you
have bought a future. Contrast with
Short. |
| Long
Hedge |
A transaction
which involves the purchase of a
futures contract
in anticipation of actual purchases in the cash market. Such a transaction
seeks to ensure that any increase in the cash price on the subsequent cash
market purchase is offset by a profit on the futures position. Sometimes
described as a
consumer’s hedge or as a price fix hedge. |
| Lot |
Another term
for a contract. |
| Lower Rate
of Tax |
The lower rate
of tax is 20% in the fiscal year 1998/99 and is applied to the first #4,300 of
taxable income. See also Basic Rate of Tax,
Higher Rate of
Tax and Taxable
Income. |
