Here’s a collection of regularly used stock market terminology. You can go to this glossary whenever you wish to learn something.
Sensex
The Sensex is a collection of the top 30 BSE-listed stocks in terms of market capitalization.
SEBI
The Securities and Exchange Board of India (Sebi) is the securities market regulator in charge of overseeing any fraudulent transactions or activities carried out by any of the parties involved, including corporations, investors, dealers, brokers, and so on.
Demat
- A demat, or dematerialised account, is a type of online portfolio in which a customer’s shares and other securities are held electronically (dematerialised).
- Trading is the process of purchasing or selling shares in a firm.
- A stock index, often known as a stock market index, is a statistical tool that tracks movements in the financial markets. They are performance indicators that reflect the performance of a certain market segment or the market as a whole.
- A portfolio is a collection of various assets that investors possess. A portfolio can also comprise valuable assets such as gold, equities, funds, derivatives, property, cash equivalents, bonds, and so on.
Bull Market
- During a bull market, businesses make more money, and as the economy grows, consumers are more willing to spend.
- Bear markets refer to an economic slowdown that may cause consumers to spend less, lowering GDP.
- Nifty50 is a list of the top 50 firms listed on the National Stock Exchange (NSE).
- A stock broker is a financial advisor who buys and sells stocks on behalf of their clients.
- The bid price is the highest price a buyer will pay to purchase a certain number of shares of a company at any particular time.
- The ask price in the stock market is the lowest price at which a seller will sell their stock.
IPO
- An Initial Public Offering (IPO) is the sale of securities to the public in the main market. It is the company’s greatest source of finances, having a long or indefinite maturity.
- Equity is the value that a shareholder would receive if all of the company’s assets were liquidated and all of its debts were repaid.
- A dividend is cash or a reward that a corporation pays to its shareholders. It can be issued in a variety of forms, including cash, stock, or any other.
BSE
- The Bombay Stock Exchange (BSE) is India’s largest and first securities exchange. As the Native Share and Stock Brokers Association, it was established in 1875. It is also India’s first stock exchange, offering an equities trading platform for small and medium-sized businesses.
- The National Stock Exchange of India was the first to introduce screen-based or electronic trading. It is the world’s fourth largest stock exchange in terms of equities trading volume, according to the World Federation of Exchanges (WFE).
Call and Put Options
A call option offers the investor the right to buy the underlying securities, whilst a put option allows the investor to sell shares of that security.
Types of stock markets
There are two sorts of stock markets.
Primary Market
It develops securities and serves as a venue for corporations to offer new stock options and bonds to the general public.
Secondary Market
Investors use brokers to exchange securities without involving the corporations that originally issued them.
Ask and close
- In the stock market, the phrase ‘ask’ refers to the lowest price at which a seller is willing to sell stock.
- The ‘closing price’ refers to the last price at which a stock trades during a regular trading session.
Moving Average
- It is a stock indicator that is commonly used in technical analysis to smooth price data by providing an always-updated average price.
- A rising moving average implies that the security is in an uptrend, whereas a falling moving average signals a decline.
