Rights entitlement
Market basicsAlso called: RE
A tradeable right to subscribe to a rights issue, credited to your demat account.
In plain terms
It has real value. Letting it lapse dilutes you and pays you nothing.
1678 terms
Glossary
Every term is defined twice: once the way a filing would put it, and once the way somebody would explain it to you across a table. The second one is usually the one that sticks.
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Renunciation
Market basicsSelling your rights entitlement to another investor instead of subscribing.
In plain terms
The correct move if you do not want to invest more but do not want to be diluted for free.
Theoretical ex-rights price
Market basicsAlso called: TERP, Ex-rights price
The share price a rights issue implies once the entitlement has separated from the share — the old and new shares taken together at their respective prices, divided by the total.
In plain terms
The number a rights entitlement is worth by subtraction from, and the reason the share’s own chart carries a genuine step on the ex-rights date that no seller caused.