Are you looking to invest in the stock market? All About 50 Stock Trading Terms


Agent

A brokerage firm is called an agent when it purchases or purchases shares on behalf of the client. The agent will not own the shares at any time throughout the duration of the transaction.

Ask/Offer

The lowest price at which an owner is willing to sell the shares.

Assets

Anything in the name of the business, including money, equipment, land, technology, etc., that reflects the overall wealth of the business.

To the money

A circumstance where option prices are similar to the prices of the underlying securities. Trading choices are likely to be high if the money is available.

bear market

A market where stock prices are constantly falling.

Beta

Measure the connection between the stock price and the movement of the overall market of a single stock.

Offer

The buyer is willing to pay full price for an item. It’s the opposite of asking/offering

Top notch action

Stocks of large, well-established and financially stable companies that have records showing dividends being paid to their shareholders over decades at a steady rate of growth. Blue chip stocks usually have a market capitalization of thousands of crores.

Lot of boards

A standard trading unit as established by the exchange commission. The lot size usually depends on the price per share. The common card lot size is 50, 100, 500, 1000.

Obligations

They are promissory notes offered to their buyers by companies or the government. It refers to the amount of money held by the buyer for a certain period of time.

Book

An electronic record of all open orders for buying and selling specific stocks.

Brokers/brokerage firms

A registered securities company is called a brokerage firm. Brokers act as consultants for the acquisition and sale of listed shares, and at no time do they hold the securities. But for their service they demand a commission.

bull market

A market that constantly increases stock prices.

Working days

They include every day from Monday to Friday, excluding public holidays.

call option

An option that allows the investor to buy a specific stock at a certain price within a specified time, but not a bond.

Close Price

The final stock price on a certain trading day is traded.

Goods

Product intended for trading traded on a separate and authorized commodity exchange. Agricultural products and natural resources are included in goods.

Convertible securities

Securities that can be converted into other securities of the issuer (bonds, debentures, preferred stocks) or into convertible securities are called convertibles. Conversion normally takes place at the option of the holder, although it may take place at the option of the issuer.

Debentures

A kind of debt instrument not secured by tangible or collateral assets. The overall creditworthiness and reputation of the issuer is only supported in the debenture. A debenture is a form of investment without any collateral.

defensive stock

Even in times of economic depression, even in extreme catastrophic bond situations, these companies continue to pay dividends at a constant rate. A stock that offers regular dividends and reliable income.

Delta

The ratio of the price change of the underlying asset to the corresponding price change of the derivative. It is also known as the hedge ratio because it is used for a hedging strategy. The range is between 0 and 1.

Derivatives

A security that has one or more basic assets as the basis of its price. Stocks, bonds, commodities, currencies, interest rates and equity indices are the most common assets underlying the program.

Diversification

Reduce investment risk by acquiring shares of other companies in various fields.

Dividend

In return for its investment, part of the company’s income has chosen to remunerate its shareholders. It is normally stated by the board of directors of the company as a percentage of the current share price or a certain INR value.

Equity

Common and preferred stock representing ownership interests in a business.

Nominal value

It is the name of the money or silver, which will be earned upon expiration by the issuer of the security by the owner of the individual securities. It is also called face value.

Hedge

A technique or attempt to reduce the risk of adverse changes in asset prices.

Income stock

A stock with a solid history of dividend payments and a higher dividend than common stock.

Index

Statistical measure of economic or security market change. Indices have their own method of calculation and are usually measured over time as a percentage change from the base value.

Initial public offering

The initial public offering of shares of a company is an invitation to the public to buy shares. Smaller and younger companies that want to grow and grow issue IPOs.

Online business

Internet Commerce is a medium-sized Internet platform. Internet trading is done using an order routing system that routes traders to the trading system. Through their Internet Trading System brokers, traders around the world can trade. Internet trading was licensed by the Securities and Exchange Board of India (SEBI) in January 2000.

Limit order

Order to buy or sell shares at a given price. The order is executed at or rather better than the given limit price. A limit order sets the seller’s agreed price and the buyer’s willingness to pay the maximum price.

Listed share

The shares of an issuer are traded on an exchange. In order to maintain the listing privilege, the issuer must pay fees which are listed on the stock exchange and comply with the rules of the stock exchange.

Market capitalisation

The total value of all outstanding shares of a company. The calculation is made by multiplying all remaining shares by the current market price of a share. In terms of wealth, it determines the size of the business.

Mutual fund

A specialist managed spending pool to enhance savings by investing in stocks, bonds and other securities. These professionals will build a diversified portfolio from these funds.

odd lot

A number of shares that is less than or greater than but not equal to the board lot size. For example, if the board lot size is 100 shares, an odd lot would be 95 or 102 shares. Usually, odd lots are difficult to trade and not readily accepted in the market.

One-sided market

This is a market with only potential sellers but not the two potential buyers.

out of the money

The stock price is lower than the strike price or call options. This means that the stock price is higher than the strike price of the options. Pricing for non-monetary alternatives only includes “time value”.

Wallet

Any person or institution holding different securities of different companies operating in different sectors is included in the portfolio.

Position limit

The maximum amount of futures and options held by a particular investor at any given time.

Pre-opening sessions

For 15 minutes, from 9:00 a.m. to 9:15 a.m., the pre-opening is held. Changes and undoes occur when entering pre-login session commands.

Price-earnings ratio (P/E)

A recently traded stock price valuation of the companies showed earnings per share over the past 12 months. For example, if the last stock price of company X is 40 and its earnings for the last 12 months per share is INR 2, then the P/E ratio of company X will be 20 (40/2)

put option

An option that allows an investor to sell a certain stock at a predetermined price within a certain period of time. The investment option is purchased by those who believe that the stock price will fall below the specified price.

Risk

The likely chances of actual investment returns will then be reduced, as calculated. Risk is usually measured by calculating the standard deviation of historical price returns. The default spread is directly proportional to the corresponding risk level.

Securities

A transferable investment certificate representing ownership of items such as stocks, bonds, futures and options held by individuals.

Strike price

The price at which the holder can buy or sell the securities he holds when the option is executed (if the call option is selected).

Stock split

It involves dividing existing shares into several outstanding shares of a company. The availability of shares on the market is frequently increased. The normal split ratio is 2:1 or 3:1, i.e. a share is split into two or three parts.

Thin market

A market where the quantity of buy and sell offers is relatively low. The price is quite erratic as the number of transactions is limited.

negotiation session

The term is available to sellers and buyers from 9:15 a.m. to 3:30 p.m. All orders must be placed within this timeframe for the day. All orders submitted during pre-opening sessions are matched and executed here.

Yield

It is the percentage measure of return on investment. The stock’s yield is determined by dividing the company’s current stock price by the annual dividend paid for the stock. When current stock prices are 100, for example, and if the dividend paid on each share is INR 5 per annum, the return on the share is 5%.

Understanding the stock market can be considered a difficult undertaking. Some difficult terms and concepts may frustrate you, but you will definitely be helped by knowing these terms. These terms will enrich your vocabulary and help you become a better and successful investor.

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