Guide to Analysing Companies

International Securities Market Association
Founded in 1969 in Zurich, the International Securities Market
Association (isma) was originally called the Association of In-
ternational Bond Dealers (aidb) but changed its name in 1991. It
is a loosely knit club that presides over a market in securities
worth more than $3 trillion. It has more than 800 member firms
from over 40 countries that deal in and underwrite interna-
tional bonds. The isma draws up its own rules and regula-
tions and supervises the activities of its members.
Internet banking
The practice of banking over the internet. During the dotcom
boom of the late 1990s, it was confidently predicted that, within
I
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a few years, most people would be doing all their banking trans-
actions over the internet. It has not turned out quite like that, but
an increasing number of customers do favour the speed and ef-
ficiency of doing business via the internet or the telephone.
Many banks set up to cater for such customers also offer
mutual funds and other investment products, which can
just as easily be researched, bought and sold over the internet.
(See also home banking.)
In the money
A call option is said to be in the money when it has a
strike price below the current price of the underlying com-
modity or security on which the option has been written.
Likewise when a put option has a strike price above the
current price it is said to be in the money. Contrast with out of
the money.
Intrinsic value
The difference between the exercise or strike price of an
option and the market value of the underlying security. For
example, if the strike price on a call option is $43 to pur-
chase a stock with a market price of $45, then the intrinsic
value is $2. In the case of a put option, if the strike price is $45
and the market value of the underlying stock is $43, then the in-
trinsic value would also be $2. (See also in the money; con-
trast with extrinsic value.)
Introduction
A way of introducing a company to a stockmarket. No new
shares are issued, but existing shares (which may have been
in the hands of a small number of founders or their families) are
distributed and sold more widely. Most such offerings are for
small companies listing on junior stock exchanges.