Finance Glossary

The 52-week high is a technical jargon used to tell the highest price the stock has closed at in the past year. The 52-week high i...

The 52-week low is a technical jargon used to tell the lowest price the stock has closed at in the past year. The 52-week low is a...

An abandoned baby pattern is a chart pattern formed at a reversal point of a trend. We can observe three candles each with a diffe...

ABC wave theory is also known as the Elliot wave theory. In Elliot's wave theory, the two types of price movements are called tren...

Whenever a company wants to raise money from the public they list themselves on the stock exchanges. The two most popular stock ex...

Ordinary letters of credit are usually sight credits i.e. immediate payment of the credit should be made of the bill drawn by the ...

Accrued expenses are those expenses, from which the benefit has been already received in the current financial year but the paymen...

Accrued income is the income earned in the current financial year but has not yet been received by the company. Accrued income is ...

The accumulation distribution indicator is a technical indicator that helps to indicate the trend of a security based on the buyin...

The acid ratio also known as the quick ratio shows the company's ability to deal with its short-term liability. It depicts how sho...

Adjusted closing price attributes for the change in the price of security happened apart from the market hours. Changes in prices ...

The adjusted future price shows the value of the underlying asset of the future contract multiplied by the number of units in that...

In India stock markets are open from 9:15 a.m. to 3:30 p.m. Most of the trading is done within the market hours. After the regula...

Algorithmic trading popularly known as algo trading is done when you give pre-defined instructions for buying and selling to your ...

All or none order means that the order will be executed fully or not at all. For example, if you place an order for 1000 shares of...

Alpha can be understood as a term used to compare the performance of a stock or strategy to the performance of a benchmark index. ...

American options are those options that allow the investor or trader to use their option right before or on the expiration of the ...

An anaume pattern can be identified on the chart showing a depletion design. It signifies gap-filling and the pattern is made out ...

Annual earnings change is the difference between the earnings of the current year minus the earnings of the previous fiscal year....

Net profit margin is a financial ratio that helps us to assess the profitability of the business. It tells us how effectively the ...

The annual report is a detailed document prepared by the company year disclosing all the operating, financing, and investing activ...

Arbitrage is the process of buying a security or asset from one market and then selling it in another market and making a profit w...

The ask or offer price is the price at which the investor is willing to sell the security or the asset he or she is holding. It is...

Ask size is the units of the asset that the investor is willing to sell at a given price. ...

Asset allocation refers to the process where the investors decide how they want to invest their money in different asset classes b...

Assets can be classified as things over which you have ownership rights and whose value can assessed in monetary terms. The asset ...

An asset is something that carries some monetary value and can be converted into cash over which the holder has ownership rights....

The closing price is the last traded price or the price of the stock or the security at the time of market closing. The stock mark...

The concept of At the money is used while trading options in the stock market. Options of different assets have different strike p...

At the opening, is like a command that you provide the system. It means that the trade will be executed as soon as the market open...

Authorized capital is the total amount of shares that the company can issue to raise the money from the public. ...

Authorized capital is the total amount of shares that the company can issue to raise the money from the public. ...

A draft offer document refers to a draft of the offer document for an Initial Public Offering (IPO). It has to be submitted at lea...

Earnings per share (EPS) refers to the monetary value of the earnings per outstanding share of common stock for a company. It is a...

Earnings before Interest, Tax, Depreciation and Amortization, or EBITDA, is a version of Operating Income that does not take non –...

EBITDA margin refers to the company’s earnings before interest, tax, depreciation, and amortization (EBITDA) as a percentage of th...

Enterprise value, also known as firm value, refers to the market value of the firm, and is the basis of the mergers and acquisitio...

Equilibrium price refers to the price at which the buyer and seller arrive, when negotiating the sale of an asset. In economics, e...

Equity, also referred to as shareholders’ equity, is the amount of capital which will be returned to shareholders if the company’s...

Equity capital market (ECM) is the place where financial institutions connect with companies looking to raise capital, or trade in...

Equity delivery, also known as delivery based trading, refers to the acquisition of shares, and their storage in the Demat account...

Equity market also known as a stock or share market, is the place where equity trading (LINKED) takes place. Generally, equity mar...

Equity options are contracts that give the holder the option to trade in equity at pre-determined conditions such as price (also k...

Equity share capital refers to the capital raised by a company as a way of financing its current operations, meet debt obligation ...

Equity trading refers to the sale and purchase of equity (unit ownership of a company) on a listed stock exchange. Equity is issue...

Equity trading refers to the purchase or sale of equity (a unit of ownership in a company – also called stock or share) in the sha...

A European option refers to a type of option which allows investors to exercise their options only on the date of the expiration o...

Ex-dividend refers to the date where the company decides which share-holders will receive dividend. Once a stock goes ex-dividend,...

Exit load, also referred to as exit penalty, is the fees which are charged by an Asset Management Company (AMC), if an investor ch...

Exponential Moving Average (EMA) refers to a statistical measure that determines trend direction over a time period, It assigns hi...

Face value, also known as par value, is the price at which a stock is issued, and is the nominal value of the security which is de...

Fair value is a term used in accounting for the actual price that the buyer and seller arrive at, when negotiating the sale of an ...

Fibonacci retracements refer to a form of technical analysis, where horizontal lines are used to predict supports and resistances....

Filing refers to the submission of all relevant documents during an Initial Public Offering (IPO) with the regulatory authority (t...

Firm Allotment refers to the allocation of shares to individual and institutional investors who are not considered retail public i...

Fixed income securities are investments which are issued in exchange for loans, and which provide regular, periodic returns in the...

Flipping refers to the purchase of assets with the intent of re-selling them quickly. Flipping is a term often associated with rea...

Floating interest rate refers to an interest rate that fluctuates over time, due to factors such as government policies, interest ...

A Follow-On-Public offering (FPO) refers to the issuance of fresh shares for subscription by the public by a company that is alrea...

A foreign direct investment refers to the acquisition of assets in a country other than one’s own, with the intention of acquiring...

A foreign portfolio investment refers to the purchase of financial assets (including shares, fixed deposits, derivatives etc) by a...

Foreign exchange future, also known as a currency future, is a futures contract for exchange of two currencies at pre-determined c...

Foreign exchange options are derivative financial instruments that give an investor the option to purchase / sell currency at pre-...

Foreign exchange trading, also known as Currency trading, is the purchase and sale of pairs of currencies in the foreign exchange ...

Forward market is an over-the-counter marketplace for foreign exchanges, securities, commodities and interest rates. It allows buy...

Forward price refers to the predetermined and agreed-upon price of an underlying asset in a forward contract. It is determined thr...

Founders’ stock refers to equity which is issued to the founders, and at times, employees early in the life of a company. They are...

Free cash flow is a metric that shows the cash that a company generates after accounting for operating (such as rent, equipment, s...

Free float market capitalization refers to a calculation of market capitalization which is based on the total available outstandin...

Futexagri is a futures commodity index traded on the National Commodity & Derivatives Exchange Limited (NCDEX), which is traded on...

(SAME AS FUTURES CONTRACT) A futures contract is a legally binding contract where the buyer and seller agree to purchase or sell a...

Futures and options are exchange-traded derivatives which trade in the stock market, and derive their value from an underlying ass...

A futures contract is a legally binding contract where the buyer and seller agree to purchase or sell an asset at pre-determined t...

Gamma is a risk metric that describes the rate of change of the delta statistic for a unit change in the price of the particular s...

“Going public” is another term for an Initial Public Offering (IPO) (linked), which is the process of getting listed on the stock ...

Gold Exchange Trade Funds (ETFs) are mutual funds that track the price of the physical gold commodity, and are traded on the stock...

Gold futures are future contracts where the seller promises to sell gold at a pre-determined time in exchange for a down payment, ...

Government bonds are debt securities which are issued by central banks as a way of raising funds for government operations. They g...

Grey market, also known as a parallel market, is an unofficial stock market, where trading takes place for stocks before they are ...

Gross Domestic Product is an economic measure of the final value of all goods produced and services rendered in the country for a ...

A Growth stock is a stock that is expected to grow at a faster pace than the market average – and usually are volatile. They typic...

Hammer candlestick is a pattern of stock pricing where financial stocks trade below their opening price when the market opens, but...

Hard underwriting is a scenario where the under-writer, often an investment bank, agrees to purchase their commitment of shares b...

Hedging is a strategy for managing risk, where potential losses are offset by investment in stable and predictable assets. An ever...

High beta stocks generate higher than market returns, but also carry significant risks for investors. Beta is a statistical measur...

High Divided Yield Stocks are stocks that provide relatively high dividends, in comparison with the market. Generally, they are co...

High volatility stocks refer to stocks which are sensitive to fluctuations in the stock market. Generally, shares of mostly small,...

A holding company is a company created with the intention of holding an ownership stake in other companies. It is often a Limited ...

Holding period refers to the time that a security is held in an investor’s portfolio, that is, between its purchase and sale. For ...

Holdings are the financial instruments that comprise a financial portfolio for an individual or institutional investor. A portfoli...

An Iceberg order involves placing a larger order by dividing it into smaller orders, and executing them one-after-the-other with t...

Ichimoku Kinko Hyo, also known as Ichimoku, is a form of technical analysis that determines high probability trades by identifying...

An identifiable asset can be separated from a company, and given a valuation at any point of time. This is useful when assets have...

An illiquid asset cannot be easily converted into cash / cash equivalents. Generally, due to certain factors, it is difficult to f...

An income statement refers to a financial statement that shows in detail, the incomes and expenses of an organization, and the pro...

Income stocks are low risk investments, which generate regular and stable incomes in the form of dividends for investors. They are...

Index Arbitrage is a form of arbitrage that involves trade in indices and individual stocks which compose those indices. Therefore...

India VIX stands for India Volatility Index, which is also known as the 'fear index' and depicts volatility and fluctuations in th...

Indices refer to collections of stocks, and capture the prices of all the securities in the collection. In India, two popular indi...

Industry analysis, also known as market assessment is an effort to understand the composition and existing scenario of an industry...

Inflation refers to an increase in prices of goods in services in the economy, leading to a reduction in purchasing power. General...

Information ratio measure the returns of an investment / portfolio above and beyond the returns of a benchmark, relative to the vo...

Insider trading refers to the trade of stock of a listed company based on information not available to the public, and is material...

Interest coverage ratio is a debt ratio used to calculate the financial health of a company by how well the company can pay intere...

Interest rate future refers to financial derivative contracts where the underlying asset is an interest bearing instrument. ...

Interest rate risk refers to the risk associated with fluctuation of interest rates in the value of a security. Securities like bo...

Internal rate of return (IRR) is a tool used in Discounted Cash Flow analysis to measure the potential profitability of an investm...

Intra-day is a term used to describe the trade of securities, often equity shares, during trade hours. This is in contrast to Inte...

Intrinsic value of a stock is a measure of the actual value / worth of a stock, as opposed to its prevailing market price, and hel...

Initial Public Offering (IPO), also referred to as “going public”, is the process of a private company opting to become a public c...

Irredeemable debentures, also called perpetual debentures or non-redeemable debentures, are debentures (debt instruments unsecured...

Issue price refers to the price at which a company offers financial securities (stocks, bonds etc.) for the first time during an I...

An Issuer is the company that issues its shares for the first time through an Initial Public Offering (IPO) to become a publicly t...

Lead under-writer is a financial organization, often an investment bank, which assists the launch of an Initial Public Offering (I...

Leverage refers to an investment strategy which involves obtaining a loan as a way of increasing potential returns of investment(s...

Liabilities are debts that an organization owes to either individual or institutional creditors. Broadly, liabilities are classifi...

A limit order refers to a directive to trade in a particular stock at a minimum/maximum pre-defined price. This is in contrast to ...

Liquidity refers to the ease with which assets can be converted into flexible forms like cash/cash equivalents. It is generally me...

Liquidity ratio is a financil ratio used to measure a company's ability to meet it's short term debt obligations without resorting...

Liquidity risk refers to the risk that a company/organization will not be able to convert its financial assets in liquid form (cas...

A liquidity trap is a scenario where interest rates in the economy are very low, and people prefer to hold their investments in li...

Listing refers to the process of a company making its shares available for subscription through an official stock exchange, and be...

Listing date refers to the date when a company’s shares become available for subscription and begin trading on the stock exchanges...

Lock-in refers to a certain period when one is not allowed to sell or redeem shares / financial securities. It is usually put in p...

LTCG tax refers to a tax levied on returns from the sale of investments which have been held for at least three years (long-term a...

Lump sum refers to a larger, single payment or investment, rather than several smaller payments spread out over time. Mutual fund ...

Moving Average Convergence Divergence, or MACD, is a trading indicator used in technical analysis to track changes in momentum, st...

Margin funding, also known as “margin trade funding”, involves obtaining a short-term loan to make up for a deficiency in purchasi...

Margin trading, or “buying on margin”, is a feature offered by stock-brokers which involves purchasing higher quantities of stock ...