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A1 Intraday Tips a Sebi Registered Investment Advisory team has explained the Basic Stock Market Basic Terms / Glossary / Dictionary. This information will surely help novice traders to gain knowledge of terminologies use in stock market.

Basic Keywords Stock Market


 

Stock Market Basic 60 Terms / Glossary / Dictionary



 

1) What is Share in Nse Market ?

In simple Words A Share means one part of company. A company's capital is divided into equal parts and one part is called as share. A Share entitles the holder to a proportion of the profits that company earns by doing business also it a equal obligation for the company's debts and losses. A share is also called as part ownership of a company and company’s assets and earnings.

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2) Who is Called as a Shareholder in Stock Market

An individual, institution or corporation that legally owns one or more shares of company in a public or private corporation is called as a Shareholder. Shareholders have a claim on the company’s ownership.

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3) What do you mean by a Primary market ?

The Primary market also known as New Issue Market (NIM). The Primary Market means IPO (Initial Public Offering). The Shares of private company are offered to the public by way of IPOs. You can also say that the primary market provides the channel for creation and sale of new securities or new shares of new companies to be listed at Nse.

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4) What is Secondary Market ?

Secondary market is the platform where previously issued securities in primary market are traded among traders in Stock market. It is the market where purchasing and selling of shares happens among investors in Indian stock market.

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5) What is Intraday Trade / Day Trading

When a Trader/ Investor buy's and sell's the share /stock on the same day, it is called as Intraday Trade or Intraday Trading in Nse market. Intraday traders has to square up their positions before the market closes either by booking profit or booking loss. There are lot of Benefits of Intraday Trading in Stock Market.

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6) What is Stock Delivery / Positional Trade

When any investor buy's share/stock and hold it for more than one day, then it is called "Stock delivery" or Positional Trade. Generally delivery is taken for short term & Long term by Investors during bullish or trending up market to get good profits. Delivery of stock is also term as Investment.

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7) What is Bull Market

Bull market means a bullish trend in Indian share market. When NSE Nifty and BSE Sensex continuously are going up & up and everyone is expecting it to go up further it’s called Bull market in Stock Market.

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8) What do you mean by Bear Market ?

Bear market means bearish trend in share market. When NSE Nifty and BSE Sensex continually falls down and also the Investor's are expecting it to fall further down, it’s called bear market in Indian stock Market.

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9) Limit Order

A Limit Order means to place the trade of buy or sell security with specific price. A buy limit order can only be executed at the limit price or lower, and a sell limit order can only be executed at the limit price or higher. A limit order is visible by the market participants.

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10) Market Order

When any Investor want to buy or sell securities at the current price prevailing in the market, it's called as Market order. For example, if the market price of ULTRACEMCO is Rs 3400/- and Investor are ready to buy the share at the same price (at Rs. 3400), then investor place the market order.

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11) Day order

The Day order is the trade order which an investor places to buy/sell shares on a particular day. The Day order gets canceled automatically if that order is not executed on that particular day.

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12) Blue chip stocks

Blue chip Shares/stocks are from large cap and well reputed companies with a long history of sound financial performance. Mostly Blue chip shares are listed in NSE Nifty Fifty 50 Index.

Also Read Best Blue chip Nse 50 stocks from large cap

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13) Stock Broker

A Stock Broker also called as a Broking House is a professional who help you to open your Demat cum trading account and also help you to executes buy and sell orders for securities ( Share and stock) on behalf of clients and charge a commission for this service. Also Reads : Top 10 Broking Houses / Stock Brokers in India

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14) Portfolio

A Portfolio is list of different investment done by the person. A Portfolio is list of assets of a Individual that holds his stocks, bonds, cash and more. Investor has done the investment to get better returns to achieve his set financial goals.

Also read: How to Create Best Portfolio ?

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15) Stock Exchange

Stock markets or Stock Exchange is place where individual and institutional investors come together to buy and sell shares. Now in Modern days this stock exchange exist as electronic market place where the buying and selling is done.
There are two very well known & Popular Stock exchanges in India.

  • National Stock Exchange
  • Bombay Stock Exchange

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16) Dividend

Dividends means a Part of Profits that a Company pays its shareholders. When the company earns good profit (earning – expenditure) the company distribute the earned profits, evenly on the basis of the shares hold by its shareholders. Sometime Promoters don't give dividends, in spite of the profits from the business, they could be do this as they may plan to use the profits for expansion program.

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17) Index

An Index is an indicator of the country's economy that is listed at stock exchange. The NSE Main Index is Nifty 50 ( A List of Top 50 Companies ) and BSE main Index is SENSEX (BSE Sensex index) from 30 Best Companies )

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18) Trading volume

Generally Trading volume is calculating the number of shares traded at the Stock exchange on the particular day. This can also be called a volume of the shares/stocks those have changed hands during a the same day.

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19) What is Volatility in Stock Market

Arbitrage in Indian Stock Market

Stock market can go up and can go down, this shows the Market Volatility for that stock or the stock market has a whole. If the prices of a security fluctuate rapidly in a short time span, it is termed to have high volatility. If the prices of a security fluctuate slowly in a longer time span, it is termed to have low volatility.

Also Read : Why to avoid to trade on event day ?

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20) Liquidity

Liquidity refers to how easy it is to buy and sell shares of a security without affecting the asset's price. Liquidity in stock market means, a investor can easily buy sell a stock without affecting the share price of that particular stock .

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21) Short Selling

Short selling" is defined as selling a stock of a company which the seller does not own or has in his demat account at the time of trade in Nse Market. All classes of investors, viz., retail and institutional investors, are permitted to short selling in Share market in India. A trader sells share first (which he doesn’t even own at that time) and hope that the price of that share will fall later. He will make a profit by buying back those shares i.e square off at a lower price. Overall, both selling and buying are done here, however, its sequence is opposite to the regular transactions to get the profit of the falling share prices.

Also Read : What is Short Selling in Stock Market

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22) Long position

Normally long position take places during the Bullish Trend in Share market. When investor is buying a Stocks with the expectation that it will go up in value, he holds the stock i.e he long's his position in that stock to get good returns in the future. This Long Positions in a stock happens generally in Bull Market.

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23) Market capitalization

Market capitalization shows the Total traded value of the company’s shares in the Nse stock exchange in Indian currency. It is calculated by multiplying the current market price of the company's stock price prevailing in the market with the total outstanding shares of the company. We can Categorise companies in to three types depending on their Market Capitalization. The stocks with a market cap of Rs 10,000 crore or more are Large Cap Stocks like Reliance. Company stocks with a market cap between Rs 2 crore and 10 crore are Midcap stocks. The Company Stock with less than Rs 2 crore market cap are Categorise as Small Cap stocks.

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24) Bonus Shares

Bonus shares are additional shares issued to current shareholders without any additional cost taken from them. The issue of additional shares is based on the number of shares each shareholder owns of that company. Bonus share are the free additional shares by the Company depending on the bonus ratio announced by the company in its Board Meeting. This is a form of rewarding shareholders from the profit a company earns. Share holder has nothing to pay for getting bonus shares of that company. Due to Bonus issue, the share price reduces and it becomes more affordable to investors, which in turn increase the liquidity of the stocks.

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25) Ask Price

The ask price represents the minimum price that a seller is willing to take to sell his share in the Nse.

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26) Bid Price

The bid price represents the maximum price that a buyer is willing to pay for a share of stock at Nse.

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27) Bid-Ask spread

The Difference between the "Ask" (Buying) price and "Bid" (Selling ) price of the Security ( Share/stock) is term as Spread . The difference between bid and ask prices, or the spread, is a key indicator of the liquidity of the stock. If the spread is smaller, the liquidity is better.

The bid-ask spread can widen dramatically during periods of illiquidity or market turmoil, since traders will not be willing to pay a price beyond a certain threshold, and sellers may not be willing to accept prices below a certain level.

Here A1 Intraday Tips the give the very simple examples of Ask (Buying) price & Bid ( Selling) price spread. If Investor A want to buy stock of the ACC @ 1200 and Investor B want to sell ACC in the 1202. The ACC spread is RS. 2 ( 1202-1200+2).

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28) Demat Account

The Full form of Demat Account is the "Dematerialised account". The demat account is same as the Normal Saving Bank Account. In Bank Account you can keep the Money, Remove the Money. Same way in the Demat Account you can keep securities ( Stock/share/ Mutual Fund etc)

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29) Trading Account

This is the platform to buy and sell Securities in Indian stock exchange. Investor can place order to buy and sell the security by electronic system which is called as Trading account.

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30) Margin

Margin in stock market refers to the process whereby individual trader can trade more in the stock using the extra money from the stock broker. Investor Trades on stock broker money, i.e he borrows money from his stock broker to purchase stock. Stock broker allow to investor to buy more stocks than the Investor capital deposited with him. In other word Margin means Extra Intraday Exposure given to trader by his stock broker to trade more in Stock Market.

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31) RBI Policy

The Monetary policy is the macroeconomic policy of Reserve Bank of India. It involves the management of money supply and interest rates in the Indian Economy. RBI tweaks interest rates to achieve macroeconomic objectives such as liquidity, consumption and inflation as per its requirements.

Also Read : Impacts of RBI’s Policy on Bank Nifty & Bank Sector

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32) Annual Report

An annual report is a report prepared by a company's Auditors for the shareholders of that company. An annual report is a comprehensive report on a company's activities done in the preceding year. Annual reports are intended to give shareholders and other interested people information about the company's activities and financial performance. Fundamental Analysis is done using the annual reports of the company.

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33) Arbitrage

Arbitrage refers to the buying and selling of the a stock of a company in different stock exchange or in different segment of the same stock exchange to get the advantage of a price difference if any.

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34) Beta

A Beta shows the measure of a share’s/stock's volatility in relation to the overall NSE share market. If the stock's beta is high, The buying of the stock of that company is riskier, but it is likely to give higher return too. Same way a Stock with Low Beta are less riskier, but they will provide lower returns.

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35) Haircut

A Haircut means the stock value lower than its original market value. Haircut is used as collateral for a loan. In simple language you can say that Haircut is 20%, If a Stock Broker gives extra margin to investor which is 80% of the stock value given as a Collateral.

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36) Stock market Leverage

The meaning of Stock market Leverage or margin is Investor's borrowed capital to buy (invest) more in the stock market. Stock market leverage can increase the Investor return on his investment but he can also lose more money if the trade done by him goes wrong or not in his favour.

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37) Sectors

A group of shares that are in the same industry belong to the same sector. In the Indian stock market there are different Sectoral Indices.

Also Read Learn About Sectors in NSE share Market

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38) Stock Symbol

A stock symbol is a short one- to four-character alphabetic name that represents a publicly traded company on a nse stock exchange. E.g. Tata Motors Limited is a Nse stock symbol is "TATAMOTORS"

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39) Yield

Yield means Investor’s earnings generated on his investment over a particular period of time. Mostly Yield shows as a percentage based on the invested amount. It also includes the interest earned or dividends received from holding a particular security. If Investor bought stock Tatapower for Rs.40 per share and it the stock of Tatapower pay Rs.1.00-per year dividend, Investor "yield" from the stock is 2.5 %. A yield of 4 to 6 percent is considered quite good in stock market.

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40) Technical Indicator

Technical indicators are mathematical calculations based on the past price, volume and open interest of the stock. Trading indicators are mathematical calculations based on the past price, volume and open interest of the stock. They are plotted as lines on a price chart and can help traders to identify certain signals and stock, trends for stock market.

Also Read : What is the meaning of technical analyst ?

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41) Fundamental Analysis

Generally the Fundamental Analysis is study financial reports of the company, Check the debt, Fundamental Analysis of a stock is widely used to study the financial and business health of a company. It is always recommended to perform a proper fundamental analysis of the stock before investing if you are planning for long term investment. A Trader can use various financial ratios like Price to Earnings (PE) ratio, Price to Book Value (PBV) ratio, ROE, CAGR, Current ratio, Dividend yield, etc. It also involves the study of the company's competitors.

Also Read : Learn Fundamental analysis.

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42) SEBI

SEBI is a short form for Security Exchange of India who controls the Indian Stock Exchange ( NSE & BSE) in India's Financial Market. It was formed in the year 1988 and received statutory powers under the SEBI Act, 1992. The main functions of SEBI include the designing and meting out certain rules and regulations in order to make the market a safe place for investment. The main regulatory function of the Security and Exchange Board of India is to ensure effective management of the stock market including the FII and DII in India

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43) FII(Foreign Institutional Institution)

FII means foreign institutional institution, established or incorporated outside India which proposes to make investment in securities in India. They can be insurance companies, hedge funds, mutual funds. They Invest in Companies that are listed on Indian Stock exchange like NSE, BSE. Usually FII invests in those countries which are developing economies like India. These types of economies provide high potential growth. All of the FII’s must be registered with SEBI to invest in India. FII trading in stock market are regulated in accordance with Section 2 (f) of the SEBI (FII) Regulations 1995.Sep 27, 2012

Also Read : Impact of FII and DII in NSE share market

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44) DII (Domestic Institutional Investors)

Domestic Institutional Investors or DII are the Big Indian Institutional Investors who directly invest in our Indian Economy via investing in our financial market. Domestic Institutional Investor can be hedge funds, mutual funds, banks, insurance companies, pensions companies.

Also Read : What is the impact of Global market on NSE Share Market.

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45) Inflation

Here A1 Intraday Tips try explain in very simple language the meaning of Inflation . Inflation means rise in the price of essential things and goods and services. Inflation Reduces the purchasing power of the Customer. Inflation mostly affects senior citizens ( Above the age of 60) who depends upon his their pensions and savings. There are four main types of inflation, categorized by their speed. They are creeping, walking, galloping, and hyperinflation.

Also Read : What is the inflation & Impact on NSE share market ?

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46) Swing Trading

Swing trading is a speculative trading strategy in Indian Stock market. The swing trading a position in a particular stock is held for few days to several weeks to get the profit from the trade. Swing traders primarily use technical analysis to look for trading opportunities.

Also Read : What is Swing Trading ?
Also Read : How to Mint Money using Swing Trading in Nse Markets ?

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47) Option ( call-put):

The Investor has two choice in Option trading in derivative Segment.

  • Option Call (CE) : The option call is available in Fno Segment When Investor assume that market will go up that time he buy's call option either the stock or Nifty
  • Option Put (PE) : When Investor is in bearish trend and the market is going down he buy the put option of the stock or Nifty.
A1 Intraday tips provide the Best Option tips In NSE share Market for Intraday trading.

Also Read : What is The Meaning of Put/Call/Strike Price

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48) Lower Circuit

The lower circuit is the limit below which a stock price cannot trade on a particular trading day in Nse Market. The circuit limits curb's the volatility and the extreme price movements of a particular stock in the stock market. The objective of Lower circuit is to control the stock markets at times when they move down beyond reasonable limits defined by the system.

Also Read : What is the meaning of lower circuit

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49) Upper Circuit

Upper circuit is an automatic mechanism to stop a massive surge in a price of a stock or an index during trading hours. It is used to check the volatile upside swings in the market Mostly Upper circuit happens in Bullish trend or some very good domestic or international news.

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50) P.E. Ratio( Price earnings Ratio):

The Price Earnings Ratio (P/E Ratio) is calculated by dividing a company's current stock price by its earnings per share (EPS. A high PE ratio generally indicates increased demand because investors anticipate earnings growth in the future.

Price to Earning Ratio

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51) Bottom Out

The definition of the "Bottom out" in the NSE share market is The market will not go down further. Generally in Bottom out, stock price tend to hit its lifetime lows. Even the Index happens to trade around its 1-2 years lows. It's a overall bearish trend in the stock market.

The bottom out market could be best buying opportunity or positional traders to start accumulating shares of blue chip companies having good track record.

Also Read : What is the meaning of bottom out in NSE ?

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52) Buy Back

Buy Back Share's is a corporate action by its promoters in which a company buys back its own shares from the open Market from its existing Shareholders. Usually Company buy the shares at running price or at higher than market price. In buy back shares companies promoters and directors increase their holding of the shares listed in Nse market. The Public Share Holding decrease due to this buy back of shares by promoters, as public sell their shares to promoters.

Also Read : What is the meaning of buy back ?

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53) Online – Off line trading

Online trading means a Investor places the order or buy/short-sell the stock using online trading software or terminal. In Offline trading trades calls his broker via mobile / phone call to personally request him to put buy or sell in his behalf in the stock market.

Mostly all broker and Trading Company provide the online software to trade in NSE Share Market and they also permit the traders to call them and trade.

Also Read : Difference Between Online and Offline Trading

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54) Weekly Option

NSE (National Stock Exchange ) has introduce weekly options contracts in Nifty index From Feb 11, 2019. Weekly options functions virtually same as regular monthly options but its expires on every Thursday i.e every week.

Also Read : What is the meaning of weekly option ?

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55) Dips an Rise.

Dips an Rise means when the stock price falls down i.e its makes a dip, a trader take position in the stock to sell at rise. The trader square off his position when the stock price goes up.

Also Read: How to catch dips and rise in NSe share market ?

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56) PCR

The PCR is a short form of "PUT CALL RATIO". PCR is the very well known Sentimental Indicator for the derivative market in NSE. The put-call ratio (PCR) is a measurement that is widely used by investors to compute the overall mood of a Nse share market i.e Sentiment of the stock market. The PCR can be calculated for indices, individual stocks and for the derivative segment as a whole.

Also Read : Put Call Ratio & India Vix

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57) India Vix

India VIX is a volatility index based on the index option prices of NIFTY. India VIX is computed using the best bid and ask quotes of the out-of-the-money near and mid-month. The NSE VIX also known as a India VIX Index and its help to Investor the measure of market's expectation of volatility in our NSE. The trades can also judge which best buying price of NIFTY option contract and volatility figure (%) is calculated which indicates the expected volatility of NSE share market for the next 30 working days.

Also Read : India Vix

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58) Cash Segment

In the cash segment of the stock exchange, you pay the entire amount in cash and the shares are delivered to you. In the Cash Segment when the Investor buy the stock, he has to pay the full amount of the stock in 2 days and exchange will delivered the stock in Investor demat account.

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59) F&O Segment.

F&O segment means Future and option ( derivatives Segment ). In the futures segment, Investor buy shares and pay only a margin amount.. In fno segment Investor also can Short Sell stock when the market is going down.

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60) Rollover

Here A1 Intraday Tips try to explain the meaning of Rollover in one simple sentence. Rollover in Fno segment means carrying forward a contract position to another expiry date.

Also Read : What is the meaning of Roll Over

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61) Liquid Stocks

Liquid stocks have huge trading volumes, A trader can trade in large quantities, he can purchased and sell without significantly affecting the price. Generally, lesser liquid stocks do not provide a trader opportunity to purchase and sell in large quantities. This is due to lack of too many buyers and seller for that particular stock.

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That’s all. Apart, there are thousands of more terminologies involved in trading /investing. However, these are the key terms in share market that a beginner should know. I hope this is helpful to the readers. We request traders to Email us at info@a1intradaytips.in if we missed any key term in share market that should be listed in this Article.

Happy Investing in Nse Market.

Nse Stock Market Learning Center for Beginners in Share Market

FII & DII, their Trading Activity & Its Effects on Nse Market in India How to catch Dips and Rise for successful day trading in NSE Stock Market
How To Trade in Our Share Tips What is Share Market
How to Earn Money in Indian Nse Share Market with Low Risk Stock Price Movement on Quaterly Companies Results
Indian Monsoon and its impact on the NSE share market Benefits of Day Trading in Nse Market
What is the difference between online trading and offline trading in Stock Market What is SGX nifty and how it Impacts Nse Share Market
How To Do Intraday Trading in Stock Market How to Analysis and Catch Market Trend to Earn Money in Share Market
How to Trade Reading Charts in Nse Markets What is Short Selling in Stock Market
Intraday Trading in Nse Markets Effect of Inflation on Stock Market
How to Mint Money using Swing Trading in Nse Markets Reality Behind Day Trading in Share Market
Risk Management in Share Market Why Intraday Trading is Best for Day Traders
5 Deadly Day trading Mistakes and How to Avoid them in Day Trading Basic Knowledge of Technical Analysis in Share Market
Best 11 Day trading secrets for online & off line traders. Know About Weekly Options Contracts in Bank Nifty
What is Swing Trading? Stock Market Investment Strategy in India
Nifty Future Tips for Today & Tomorrow Tips for Risk Free Investment in Stock Market
Best Nifty Option Tips Formula of Intraday Trading Techniques
Why day Stock Traders Lose Money Stock Market Education Centre
Why we are the Best Nifty Tips Provider in India Best Advisory Company ?
Free Intraday Trading Tricks & Strategies, Shares to Buy Today Impacts of RBI’s Policy on Bank Nifty & Bank Sector
How to Trade in Free share tips How to Trade in Free share tips
Learn Fundamentals Analysis What is Put Call Ratio & India VIX in share market
Impact of Corona virus on Indian Share Market What is the Lower circuit limit in Nse Nifty
Investing According to P/E Ratio Learn About Price to Earning Ratio
Top Five Mutual Funds to Invest now Impact of Covid-19 on Mutual Funds
Best 5 stocks to Buy in Lockdown Why to Avoid Intraday Trading on event day
What is Nifty 50 & How to Trade in Nifty Tips ? Bottom Out in Share Market
What is Buy Back of Shares ? Learn About Sectors in Nse Market
What are share tips, how they help day traders What is Bank Nifty Index ?
What is Short Term and Long Term Investment Learn About Mutual Funds, ELSS & NFO
Who is the SEBI & What is role of SEBI in Indian Share Market ? Impact of Lockdown on Indian Share market
Top 10 Broking Houses in India for Day Traders in Nse Market What is Market Capitalization ?
Arbitrage in stock market What is the meaning of Primary Market ?
Stock Market Basic Terms / Glossary / Dictionary


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