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The World’s First Stock Exchange Page 275 (284 of 305)
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Glossary
Glossary
Bear: A dealer who speculates on a fall in price.
Bear market: A market in which the share price is falling. A bear specula-
tor, also known as a bear or short seller, speculates on a fall in the market.
Bond: A written acknowledgement of debt. A VOC bond, for instance,
was a piece of paper stating that the VOC was in debt to the owner of
the bond.
Boom or bull market: Share price rises. This term is also used to desig-
nate a period of rising prices.
Broker: A middleman who mediated in transactions on the exchange. In
seventeenth-century Amsterdam, brokers had to be members of the bro-
kers’ guild. They received a commission set by the guild for every transac-
tion in which they were involved. Officially brokers were not permitted to
trade on their own account—they were only allowed to bring buyers and
sellers together—but this rule was broken all the time.
Bull: A bull speculates on the share price increasing.
Call option: The holder of a call option has the right to buy a share at a
preagreed price (strike price) on the option date. The buyer of the option
pays a premium when he enters into the transaction (see option premium)
in order to acquire this right. If the spot price of the share on the exercise
date (the price that day on the market) is higher than the strike price, the
option is said to be “in the money.” The holder will then exercise the op-
tion and the writer (seller) of the option must deliver the share. If the spot
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