Let's introduce Dinesh, a newbie, to the most commonly used terms of the share market.
1. Stock: Stock is the basic ownership unit of a company; also referred to as share or equity.
2. Stock Market: This is the market in which shares of publicly held companies are issued and traded through exchanges.
3. Volatility: Volatility is the degree of variation of a trading price series over time, as measured by the standard deviation of returns. Simply put, the fluctuation of a stock or the market, in general, is referred to as volatility.
4. Liquidity: Liquidity is how easily you can buy or sell a stock and convert it into cash.
5. Dividend: The part of the company’s profits, which is usually distributed to the company’s shareholders, periodically.
6. Bull Market: A bull market is a market condition where stock prices are expected to rise.
7. Bear Market: A bear market is a market condition where stock prices are expected to fall.