Arbitrage Profiting from price differences in different markets. Example: Buying a stock at ₹100 in one market and selling at ₹105 in another.
Ask Size The number of shares a seller is offering at a given price. Example: 1,000 shares available at ₹200.
Bid Size The number of shares a buyer wants to purchase at a given price. Example: 500 shares requested at ₹195.
Candlestick Chart A chart showing price movement in a specific time frame. Example: A green candlestick indicates a price increase.
Corporate Action Events that affect shareholders, like dividends or splits. Example: Infosys announces a 1:1 bonus issue.
Debt-to-Equity Ratio Ratio comparing company debt to equity. Example: A ratio of 2 means ₹2 debt for every ₹1 equity.
Delisting Removing a company’s shares from the stock exchange. Example: Company X delisted from NSE due to non-compliance.
ESOP (Employee Stock Option Plan) Stocks offered to employees at a discounted rate. Example: TCS employees receive shares under ESOP.
Face Value Original price of a share set by the company. Example: A share has a face value of ₹10.
Fundamental Analysis Evaluating a stock based on company performance and financials. Example: Studying earnings, revenue, and future growth potential.
Technical Analysis Predicting stock price movements using charts and trends. Example: Using moving averages to identify entry points.
Greeks Variables used in options pricing models. Example: Delta measures price sensitivity to stock changes.
Intraday Trading Buying and selling stocks within the same trading day. Example: Buying Tata Motors at 10:00 AM and selling at 2:00 PM.
Market Order An order to buy or sell at the current market price. Example: Buying a stock immediately at ₹250.
Limit Order An order to buy or sell at a specified price or better. Example: Setting a buy limit order for ₹100.
Oversold A stock considered undervalued due to excessive selling. Example: A stock drops sharply and becomes oversold.
Overbought A stock considered overvalued due to excessive buying. Example: Nifty IT stocks after a long rally.
Order Book A list of buy and sell orders for a stock. Example: Buyers offer ₹250; sellers demand ₹255.
Payout Ratio Percentage of earnings paid as dividends. Example: A 40% payout ratio means ₹40 dividend from ₹100 earnings.
PEG Ratio (Price/Earnings-to-Growth) Evaluates stock value by considering growth rate. Example: A PEG ratio below 1 indicates undervaluation.
Stock Buyback Company repurchases its shares from the market. Example: Infosys announces a ₹10,000 crore buyback.
Short Covering Buying shares to close a short position. Example: Traders rush to buy stocks they borrowed earlier.
SEBI (Securities and Exchange Board of India) Regulatory body overseeing Indian stock markets. Example: SEBI regulates stock exchanges like NSE and BSE.
Spread Betting Speculating on price movement without owning the stock. Example: Betting on Nifty rising above 20,000 points.
Swing High A peak point in price movement. Example: Nifty 50 touched 19,000 before declining.
Swing Low A trough point in price movement. Example: A stock drops to ₹1,000 before recovering.
Time Decay Reduction in option value as expiration approaches. Example: An option loses value as its expiry nears.
Volatility Index (VIX) Measures market volatility expectations. Example: High VIX indicates increased market uncertainty.
Wealth Management Financial planning to grow and protect wealth. Example: Investing in diversified portfolios for long-term growth.
Yield Curve A graph showing bond yields across maturities. Example: A steep yield curve signals strong economic growth.
Zombie Company A company barely earning enough to pay interest on debt. Example: A startup surviving on loans without profits.
Momentum Investing Investing in stocks with upward trends. Example: Buying high-performing IT stocks during a tech rally.
Book Building Process of determining share price in IPOs. Example: An IPO price range is set between ₹500 and ₹600.
Trailing Stop Loss A stop-loss order that moves with the stock price. Example: Setting a trailing stop loss 5% below the current price.
Initial Margin The minimum amount required to start trading futures or options. Example: Paying ₹10,000 as initial margin for a futures trade.
Collateral Assets pledged to secure a loan or trade. Example: Shares used as collateral for a margin account.
Derivatives Financial instruments derived from underlying assets. Example: Futures and options are derivatives of stocks.
Index Fund A mutual fund mirroring a stock index. Example: A fund tracking the Nifty 50 index.
ETF (Exchange-Traded Fund) A fund traded on stock exchanges like a stock. Example: Nifty Bees is an ETF tracking Nifty 50.
Growth Stock A stock expected to grow faster than average. Example: A startup in a booming tech sector.
Value Stock A stock trading below its intrinsic value. Example: An undervalued company with strong fundamentals.
Intrinsic Value The actual worth of an asset. Example: Calculating an option’s intrinsic value using its strike price.
Payout Day The day dividends are credited to shareholders. Example: Dividends are paid on 15th November.
Mutual Fund A pool of money collected to invest in stocks, bonds, etc. Example: An equity mutual fund invests primarily in stocks.
Asset Allocation Dividing investments among various asset classes. Example: 60% stocks, 30% bonds, and 10% gold.
Sector Rotation Moving investments between sectors based on performance. Example: Investing in IT during tech growth and shifting to FMCG later.
Leveraged ETF An ETF using debt to amplify returns. Example: A 2x leveraged ETF moves double the index.
Dark Pool Private trading platforms not open to the public. Example: Large institutional trades occur in dark pools to avoid market impact.
Block Trade A large trade executed privately. Example: A mutual fund buying 1 million shares of Tata Steel in a single deal.
Stop Order An order to buy or sell once the price reaches a specific point. Example: A stop order to sell a stock if it falls below ₹1,000.
