Glossary
Stock market terms, explained simply
136 words you'll meet on charts, in IPO documents, in results and in your contract note — each with a clear definition, an Indian-market example and where to practise it. Hinglish mein padhein →
#1 term
A4 terms
- After-market order (AMO)An after-market order is placed outside market hours and sent to the exchange when the next session opens.Orders & trading
- Anchor investorAnchor investors are large institutions that commit to buy IPO shares a day before the issue opens to the public.IPOs
- ASBA and UPI mandateWith ASBA, the IPO amount is only blocked in your bank account, not debited, until allotment. Retail investors approve the block through a UPI mandate.IPOs
- ATR (Average True Range)ATR measures a stock's average daily price range, including gaps, over a set period — usually 14 days. It is a volatility gauge.Charts & technicals
B12 terms
- Balance sheetThe balance sheet lists what a company owns (assets), what it owes (liabilities) and the shareholders' equity at a point in time.Fundamentals & valuation
- Bank NiftyNifty Bank tracks the most liquid and large Indian banking stocks and is one of the most actively traded index derivatives.Market structure & regulation
- Bear marketA bear market is a sustained fall in prices, commonly defined as a decline of 20% or more from a recent peak.Market basics
- BetaBeta measures how much a stock tends to move relative to the market. A beta of 1.2 means it has moved about 20% more than the index on average.Charts & technicals
- Bid, ask and spreadThe bid is the highest price a buyer is willing to pay, the ask (offer) is the lowest price a seller will accept, and the spread is the gap between them.Orders & trading
- Bonus issueA bonus issue gives existing shareholders free extra shares in a fixed ratio, such as 1:1, funded from the company's reserves.Fundamentals & valuation
- Book valueBook value is a company's total assets minus total liabilities — shareholders' equity on the balance sheet.Fundamentals & valuation
- BreakoutA breakout is when price moves above resistance (or below support, a breakdown), often starting a bigger move.Charts & technicals
- Brokerage and trading chargesEvery trade carries brokerage plus statutory charges: STT, exchange transaction charges, SEBI fees, stamp duty and GST.Taxes & charges
- BSE (Bombay Stock Exchange)BSE, founded in 1875 in Mumbai, is Asia's oldest stock exchange. Its benchmark index is the Sensex.Market structure & regulation
- BTSTBTST means buying shares today and selling them the next trading day, before they are credited to your demat account.Orders & trading
- Bull marketA bull market is a long period of rising prices and optimism, often defined as a rise of 20% or more from a recent low.Market basics
C7 terms
- CAGRCAGR is the constant yearly growth rate that takes an investment from its start value to its end value over a period.Investing & funds
- Candlestick chartA candlestick shows a period's open, high, low and close. The body spans open to close; the wicks show the high and low.Charts & technicals
- Capital gains tax (STCG and LTCG)Profit on listed shares held up to 12 months is short-term capital gain (STCG); held longer, it is long-term (LTCG). They are taxed at different rates.Taxes & charges
- Circuit limitA circuit limit is the maximum a stock's price may move in one day — typically 2%, 5%, 10% or 20% — set by the exchange.Market structure & regulation
- Closing priceOn NSE the official closing price is the volume-weighted average price of the last 30 minutes of trading, not the last trade.Market structure & regulation
- CompoundingCompounding means earning returns on your past returns. Over long periods it makes money grow faster and faster.Investing & funds
- Cut-off priceBidding at the cut-off price means you agree to buy at whatever final issue price is decided within the band. Only retail and employee bidders can choose it.IPOs
D10 terms
- Debt-to-equity ratioDebt-to-equity divides a company's borrowings by its shareholders' equity. It shows how much the business relies on debt.Fundamentals & valuation
- Delivery percentageDelivery percentage is the share of a day's traded volume that was actually delivered to buyers' demat accounts rather than squared off intraday.Charts & technicals
- Delivery tradingIn a delivery trade you buy shares and keep them in your demat account beyond the trading day, for as long as you like.Orders & trading
- Demat accountA demat account holds your shares and other securities in electronic form, the way a bank account holds money.Market basics
- Derivatives (F&O)Derivatives are contracts whose value depends on an underlying asset such as a stock or index. In India they are mainly futures and options (F&O).Futures & options
- DIIDomestic institutional investors are Indian institutions such as mutual funds, insurers, banks and pension funds that invest in the market.Market structure & regulation
- DiversificationDiversification spreads money across different stocks, sectors and asset classes so one bad outcome can't sink the whole portfolio.Investing & funds
- DividendA dividend is a share of profit paid to shareholders in cash. Dividend yield is the yearly dividend divided by the share price.Fundamentals & valuation
- DojiA doji is a candle whose open and close are almost equal, signalling indecision between buyers and sellers.Charts & technicals
- DRHP and RHPThe DRHP is the draft prospectus a company files with SEBI before an IPO; the RHP is the final version with dates and price band.IPOs
E6 terms
- EBITDAEBITDA is earnings before interest, tax, depreciation and amortisation — a rough measure of operating profit from the core business.Fundamentals & valuation
- Engulfing patternAn engulfing pattern is two candles where the second body completely covers the first, in the opposite colour — a common reversal signal.Charts & technicals
- EPS (Earnings per share)EPS is a company's net profit divided by its number of shares — the profit earned for each share you own.Fundamentals & valuation
- Ex-date and record dateThe record date decides who gets a dividend, bonus or split. With T+1 settlement, the ex-date is the same day as the record date.Fundamentals & valuation
- Expense ratioThe expense ratio is the yearly fee a mutual fund charges, expressed as a percentage of your investment and deducted from the NAV.Investing & funds
- ExpiryExpiry is the last day an F&O contract trades. After that, open contracts are settled and cease to exist.Futures & options
F6 terms
- Face valueFace value is the nominal value of a share printed in the company's books, often ₹1, ₹2, ₹5 or ₹10. It is unrelated to the market price.Fundamentals & valuation
- FII / FPIForeign portfolio investors (still often called FIIs) are overseas funds and institutions that invest in Indian stocks and bonds.Market structure & regulation
- Free cash flowFree cash flow is operating cash flow minus capital expenditure — the cash a business generates after investing to maintain and grow.Fundamentals & valuation
- Free floatFree float is the part of a company's shares available for public trading, excluding promoter and other locked-in holdings.Fundamentals & valuation
- Fundamental analysisFundamental analysis values a company from its business: revenue, profits, balance sheet, cash flow, management and industry.Fundamentals & valuation
- FuturesA futures contract is an agreement to buy or sell an asset at a set price on a future date. Both sides are obliged to settle.Futures & options
G4 terms
- Gap up and gap downA gap up is when a stock opens above the previous day's high (or close); a gap down opens below. Gaps usually follow overnight news.Charts & technicals
- GARP (Growth at a reasonable price)GARP investing looks for companies with steady earnings growth whose shares are not too expensive, blending growth and value styles.Investing & funds
- GMP (Grey market premium)GMP is the unofficial premium at which IPO shares trade informally before listing. It is not regulated and often wrong.IPOs
- Golden cross and death crossA golden cross happens when the 50-day moving average crosses above the 200-day; a death cross is the opposite. Both are slow trend signals.Charts & technicals
H2 terms
- HammerA hammer is a candle with a small body near the top and a long lower wick, appearing after a decline — a possible bullish reversal.Charts & technicals
- HedgingHedging is taking an offsetting position — for example buying a Nifty put — to reduce the risk of losses in an existing portfolio.Futures & options
I9 terms
- Impact costImpact cost is how much the price moves against you because of the size of your own order.Orders & trading
- Implied volatility (IV)Implied volatility is the market's expectation of future volatility, backed out from option prices. High IV means expensive options.Futures & options
- Index fund and ETFIndex funds and ETFs simply copy an index like the Nifty 50 instead of picking stocks. ETFs trade on the exchange like shares.Investing & funds
- India VIXIndia VIX is NSE's volatility index. It estimates how much the Nifty is expected to move over the next 30 days, based on option prices.Market structure & regulation
- Insider tradingInsider trading is dealing in a company's shares using unpublished price-sensitive information. It is illegal under SEBI regulations.Market structure & regulation
- Intraday tradingIntraday trading means buying and selling the same stock within one trading day, so no shares are delivered to your demat account.Orders & trading
- IPO (Initial public offering)An IPO is when a private company sells shares to the public for the first time and lists them on a stock exchange.IPOs
- IPO allotmentAllotment decides who gets shares in an IPO. When retail demand exceeds supply, lots are allotted by computerised lottery.IPOs
- IPO subscriptionSubscription shows how many times the shares on offer have been bid for, by category — QIB, NII and retail.IPOs
L9 terms
- Large cap, mid cap and small capSEBI groups listed companies by market cap rank: the top 100 are large caps, 101–250 are mid caps and 251 onwards are small caps.Fundamentals & valuation
- LeverageLeverage lets you control a position larger than your own money. It multiplies both gains and losses.Orders & trading
- Limit orderA limit order sets the worst price you will accept: a buy limit fills at that price or lower, a sell limit at that price or higher.Orders & trading
- LiquidityLiquidity is how easily you can buy or sell a stock quickly without moving its price much.Market basics
- Listing gainsListing gains are the profit made if an IPO share opens above its issue price on the first day of trading.IPOs
- Lock-in periodA lock-in period is a time during which certain shareholders — promoters, anchors or pre-IPO investors — cannot sell their shares.IPOs
- Lot size (F&O)F&O contracts trade in fixed lots. SEBI requires each contract's value to be at least ₹15 lakh at introduction.Futures & options
- Lot size (IPO)The lot size is the minimum number of shares you must apply for in an IPO; you can apply in multiples of it.IPOs
- LTP (Last Traded Price)LTP is the price at which the most recent trade in a stock happened. It changes with every trade during market hours.Orders & trading
M11 terms
- MACDMACD is the difference between the 12-day and 26-day EMAs, with a 9-day EMA 'signal line'. Crossovers and the histogram show momentum shifts.Charts & technicals
- MarginMargin is the money you must keep with your broker to take a position, especially in intraday and F&O trades where you control more than you pay.Orders & trading
- Market capitalisationMarket capitalisation is a company's total market value: share price multiplied by the number of shares outstanding.Fundamentals & valuation
- Market correctionA correction is a fall of about 10% to 20% from a recent high — sharper than a normal dip but smaller than a bear market.Market basics
- Market depthMarket depth shows the best buy and sell orders waiting in the order book at different prices, with their quantities.Orders & trading
- Market hoursNSE and BSE equity markets trade from 9:15 am to 3:30 pm IST, Monday to Friday, except exchange holidays, with a pre-open session from 9:00 am.Market structure & regulation
- Market orderA market order buys or sells immediately at the best available price, trading certainty of execution for uncertainty of price.Orders & trading
- MomentumMomentum is the tendency of stocks that have risen strongly to keep rising for a while (and fallers to keep falling).Charts & technicals
- Moving average (SMA and EMA)A moving average is the average closing price over the last N days, updated daily. It smooths noise to show the trend.Charts & technicals
- Muhurat tradingA special, symbolic one-hour trading session held on Diwali evening to mark the start of the Hindu new financial year, Samvat.Market structure & regulation
- Mutual fundA mutual fund pools money from many investors and invests it in stocks, bonds or both, managed by a SEBI-registered asset management company.Investing & funds
N4 terms
- NAV (Net asset value)NAV is the per-unit value of a mutual fund: total assets minus liabilities, divided by units outstanding. It is calculated once each business day.Investing & funds
- Net profitNet profit (profit after tax) is what is left from revenue after all expenses, interest, depreciation and taxes.Fundamentals & valuation
- Nifty 50The Nifty 50 is NSE's flagship index of 50 large companies across sectors, weighted by free-float market capitalisation.Market structure & regulation
- NSE (National Stock Exchange)The National Stock Exchange of India, based in Mumbai, is India's largest stock exchange by trading volume and home of the Nifty 50 index.Market structure & regulation
O7 terms
- OFS (Offer for sale)In an offer for sale, existing shareholders sell their shares; the money goes to them, not to the company.IPOs
- OHLCOHLC stands for open, high, low and close — the four prices that describe a stock's trading in any period, from one minute to one year.Charts & technicals
- Open interestOpen interest is the number of outstanding F&O contracts not yet closed. Rising OI with rising prices suggests fresh long positions.Futures & options
- Option GreeksThe Greeks measure how an option's price responds to changes: delta (underlying price), theta (time), vega (volatility) and gamma (change in delta).Futures & options
- Option premiumThe premium is the price of an option. It is made of intrinsic value (how much it is in the money) plus time value.Futures & options
- Options (call and put)An option gives the buyer the right, but not the obligation, to buy (call) or sell (put) at a strike price before expiry. The seller takes the obligation.Futures & options
- Overbought and oversoldOverbought means a price has risen fast and may be due for a pause; oversold means it has fallen fast and may bounce. Both are measured with oscillators like RSI.Charts & technicals
P10 terms
- P/B ratioPrice-to-book compares the share price with the company's book value (net assets) per share.Fundamentals & valuation
- P/E ratioThe price-to-earnings ratio divides the share price by earnings per share. It shows how many rupees investors pay for each rupee of annual profit.Fundamentals & valuation
- Paper tradingPaper trading means practising buying and selling with virtual money on real market prices, so mistakes cost nothing.Market basics
- PEG ratioThe PEG ratio divides the P/E by the expected earnings growth rate, to judge whether a high P/E is justified by growth.Fundamentals & valuation
- Pivot pointsPivot points are support (S1–S3) and resistance (R1–R3) levels calculated from the previous session's high, low and close.Charts & technicals
- Position sizingPosition sizing decides how many shares to buy so that, if your stop-loss hits, you lose only a planned slice of your capital.Orders & trading
- Pre-open sessionThe 15-minute auction before normal trading (9:00–9:15 am) in which the exchange discovers each stock's opening price.Market structure & regulation
- Price bandThe price band is the range within which investors bid for shares in a book-built IPO, for example ₹300–₹315.IPOs
- Promoter and promoter holdingPromoters are the founders or controlling shareholders of a company. Promoter holding is the percentage of shares they own.Fundamentals & valuation
- Pump and dumpA pump and dump is a scam in which promoters of a stock hype it with misleading tips to push the price up, then sell to the buyers they attracted.Market structure & regulation
Q2 terms
- QIB, NII and RIIIPO shares are split into categories: QIBs (institutions), NIIs or HNIs (individuals and firms bidding above ₹2 lakh) and RIIs (retail, up to ₹2 lakh).IPOs
- Quarterly resultsListed companies in India must publish financial results within 45 days of each quarter's end (60 days for the full year).Fundamentals & valuation
R5 terms
- Registrar to the issueThe registrar processes IPO applications, finalises the basis of allotment and credits shares to investors' demat accounts.IPOs
- Risk-reward ratioThe risk-reward ratio compares how much you could lose (entry to stop-loss) with how much you aim to gain (entry to target).Orders & trading
- ROCE (Return on capital employed)ROCE measures operating profit (EBIT) as a percentage of all capital used in the business — equity plus debt.Fundamentals & valuation
- ROE (Return on equity)ROE is net profit divided by shareholders' equity. It shows how much profit the company makes on the money shareholders have invested.Fundamentals & valuation
- RSI (Relative Strength Index)RSI is a momentum oscillator from 0 to 100 that compares recent gains with recent losses, usually over 14 periods.Charts & technicals
S19 terms
- SEBISEBI is India's securities market regulator. It writes the rules for exchanges, brokers, mutual funds, advisers and listed companies.Market structure & regulation
- SEBI-registered investment adviserIn India, only SEBI-registered investment advisers (RIAs) and research analysts (RAs) may give personalised stock advice or recommendations for a fee.Market structure & regulation
- SensexThe Sensex is BSE's benchmark index of 30 large, liquid companies, weighted by free-float market capitalisation.Market structure & regulation
- Settlement (T+1)Settlement is when shares and money actually change hands. Indian equities settle on T+1 — one working day after the trade date.Market structure & regulation
- Share buybackA buyback is when a company repurchases its own shares from shareholders, usually at a premium, reducing the number of shares outstanding.Fundamentals & valuation
- Short sellingShort selling means selling a stock you don't own, hoping to buy it back cheaper later. You profit if the price falls.Orders & trading
- SIP (Systematic investment plan)A SIP invests a fixed amount in a mutual fund at regular intervals, usually monthly, automatically from your bank account.Investing & funds
- SlippageSlippage is the difference between the price you expected and the price you actually got.Orders & trading
- SME IPOSME IPOs are issues by small and medium enterprises that list on the NSE Emerge or BSE SME platforms, with bigger lots and lighter rules.IPOs
- Square offTo square off is to close an open position by taking the opposite trade — selling what you bought or buying back what you sold short.Orders & trading
- StockA stock (or share) is a small unit of ownership in a company. Owning shares gives you a claim on part of its profits and assets.Market basics
- Stock marketThe stock market is where shares of listed companies are bought and sold, mainly on the NSE and BSE in India.Market basics
- Stock market indexAn index tracks the combined price movement of a chosen basket of stocks, giving one number for how that part of the market is doing.Market structure & regulation
- Stock splitA stock split divides each share into several smaller shares — for example a 1:5 split turns one ₹10 face-value share into five ₹2 shares.Fundamentals & valuation
- Stop-loss orderA stop-loss order automatically exits a position when the price reaches a trigger level, to cap the loss on a trade.Orders & trading
- Strike priceThe strike price is the fixed price at which an option can be exercised. Options are in, at or out of the money depending on where the market is.Futures & options
- STT (Securities transaction tax)STT is a tax charged by the government on every purchase or sale of shares and derivatives on Indian exchanges.Taxes & charges
- SupertrendSupertrend is a trend-following line built from the Average True Range. Price above the line is an up phase; below it, a down phase.Charts & technicals
- Support and resistanceSupport is a price level where buying has repeatedly stopped a fall; resistance is where selling has repeatedly capped a rise.Charts & technicals
T5 terms
- Tax-loss harvestingTax-loss harvesting means booking losses on investments to offset taxable capital gains in the same year.Taxes & charges
- Technical analysisTechnical analysis studies price charts, volume and indicators to judge trend and momentum, rather than the company's business.Charts & technicals
- Trading accountA trading account with a SEBI-registered broker is what you use to place buy and sell orders on the exchange.Market basics
- TrendA trend is the general direction of price: an uptrend makes higher highs and higher lows, a downtrend lower highs and lower lows.Charts & technicals
- TrendlineA trendline connects a series of higher lows (uptrend) or lower highs (downtrend) to show the direction and slope of a trend.Charts & technicals
V3 terms
- VolatilityVolatility measures how much and how quickly a price moves. Higher volatility means bigger swings in both directions.Market basics
- VolumeVolume is the number of shares traded in a period. It shows how much participation is behind a price move.Charts & technicals
- VWAPVWAP is the average price of a stock during the day weighted by volume — the 'fair' average price paid by everyone who traded.Charts & technicals