Share Market Terminology Part 2 by Gaurav Heera

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Gaurav Heera

[26] IPO – Initial Public Offering

Through the process of IPO, a private company or corporation becomes a public company (public company) by selling some of its shares.

By coming to the IPO market of a company, investors have a golden opportunity to become a partner in the business of that company by buying their shares. Through IPO, the shares of that company are listed on the stock exchange says Gaurav Heera.

[27] FII

FII means Foreign Institutional Investors. When Foreign Institutional Investors (FIIs) invest in the market, the market movements are very fast, whereas when they withdraw money from the market, the market can fall drastically.

[28] Annual Statement – ​​Annual Report

An annual report is the financial evaluation of a company. The annual report gives a report of the financial position and operations of the company says Gaurav Heera.

Annual reports show the performance of a company in a given financial year.

It contains about the main persons of the company, about the activities of the company, financial results of the company, upcoming projects, audit reports, balance sheet, profit and loss account etc.

[29] Market Capitalization

The market value of the total number of shares issued by a company is called the ‘Market Capitalization’ of that company.

For example, if a company has 1 lakh shares in the market and the price per share in the market is ₹10, then the market capitalization of that company would be ₹10 lakh. (1 lakh shares × ₹10)

The position of large cap, mid cap and small cap of the company is decided on the basis of market capitalization says Gaurav Heera.

[30] NSE – National Stock Exchange

NSE is the largest stock exchange in India. Companies are listed on the stock exchange.

[31] BSE – Bombay Stock Exchange

BSE is the second largest and oldest stock exchange in India where companies are listed.

[32] Buy Back

When a company decides to buy back its own shares from the market, it is called ‘Buy Back’. Through buy back, the company reduces the number of its shares available in the market. This process increases the profit per share as well as improves the balance sheet says Gaurav Heera.

[33] Insider Trading

Insider trading is an illegal act. When a person has secret information of a company, then in this way he can earn profit by buying and selling shares in huge quantity. This type of trading is called insider trading.

[34] Upper Circuit

SEBI has prescribed different types of circuit levels which are generally 2%, 5%, 10% and 20%. If the price of a stock touches its predetermined upper level on a trading day, then it is an upper circuit.

If there is an upper circuit on a stock, then it means that the buyers of that share are very high. But sellers are not present. Due to this the upper circuit gets hit due to high demand and law supply says Gaurav Heera.

[35] Lower Circuit

If the price of a share touches its predetermined lower level on any trading day, then it is a Lower Circuit.

If a stock hits the lower circuit, there are many sellers in it. Due to low demand and high supply, the stock is subjected to a lower circuit.

[36] Swing Trading

Swing trading is a well-known method of active trading, in which a stock is held for more than one day or two weeks.

In swing trading, positions are held at least overnight, as the positions are not squared off on the same day as in intraday trading.

Swing traders work on the same principles as intraday traders, as they aim to profit from short-term price movements says Gaurav Heera.

[37] Positional Trading

In position trading, a stock is sold within a few months to a year.

[38] Pledged Shares

Shares are a financial security on which the promoter or investor has full rights.

If the promoters need money to run the company, they can pledge the shares to the banks for money, and can borrow in return.

[39] Penny Stock

Generally penny stocks are those stocks whose price is less than ₹ 10. These types of stocks have the potential to give high returns with high risk.

[40] Contract Note

When shares are bought and sold from the market, stock brokers send contract notes to their clients. The contract note contains information on rates, brokerage, taxes, etc. related to the transaction of shares says Gaurav Heera.

[41] DP – Depository Participate

Depository Participant (DP) is the link between the stock exchange and the investor who holds the shares or securities in electronic form. For example, if your demat account is in Upstox or Zerodha, then your shares will be deposited in CDSL.

 

NSDL (National Securities Depository) and CDSL (Central Depository Services India Ltd) are two depositories in India says Gaurav Heera.

[42] Forex Market

Forex market is the market where currency (such as rupee, dollar, pound, euro) is bought and sold.

[43] 52-Week High

The highest price of a stock within the last 52 weeks is called 52 week high.

[44] 52-Week Low

The lowest price of a stock within the last 52 weeks is called a 52 week low.

[45] ETF – Exchange Traded Funds

An ETF is a type of security consisting of a collection of stocks, securities that belong to a particular index or sector.

ETFs are traded on exchanges such as NSE, BSE. This means that there must be a buyer and seller to buy and sell ETFs on the exchange. The way to buy and sell ETFs is exactly the same as that of shares says Gaurav Heera.

[46] Corporate Action

When any decision related to the company is taken by a company, it is called corporate action, such as bonus issue, rights issue, dividend etc.

[47] Portfolio

Portfolio is a collection of different stocks, mutual funds or other instruments such as bonds, debentures, etc. bought by you. Portfolios may consist of only stocks or may also include other financial instruments says Gaurav Heera.

[48] ​​Bonds

When a company or government directly borrows money from the general public, it issues bonds to the public in return.

In return, he promises to pay a fixed rate of interest. These issued bonds carry an interest rate, which is also called the coupon rate.

[49] Debenture

Debentures are also like bonds, in exchange for which money is raised by companies from the market. These are not as secure as bonds says Gaurav Heera.

[50] Multibagger

Whenever a stock earns a very good profit and that share multiplies your money, then that profit is called Multibagger Return and the stock is called Multibagger Stock.

[51] Commodity Market

This market is the market where commodities such as Gold, Silver, Crude oil etc. are bought and sold.

Conclusion – Glossary of Share Market 

Friends, today you have learned and understood the complete terminology of share market in this article.

I hope this has cleared a lot of concepts for you. If you liked this article, then definitely share it with your friends and if you have any question related to sharing market or mutual fund then you can tell me through comment box.

About Author

Gaurav Heera is a stock market expert, investor, trader, author & Edupreneur. He has trained already more than 5000 students through his stock market course in Delhi. You can even checkout his blog for free stock market courses & updates.

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