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Stock Market Basic Glossary

11 Jan 2016 | 16:00PM

 

Whether you are a beginner at investing or seasoned investor being familiar the basic term of the stock market is essential. Expanding your stock market vocabulary will enable you to be a better investor, so that you can trade successfully. Given below is a basic glossary of terms that you must know as an investor:-

  • Agent:

    In the stock market, an agent refers to a brokerage firm which buys or sells shares on behalf of the investor.
  • Ask/Offer:

    Lowest price at which an owner agrees to sell the shares.
  • Assets:

    Assets refers to the property owned by the company such as cash, equipment, land, technology etc.
  • Bear Market:

    It is a market situation where the stock prices fall consistently.
  • At the money:

    A situation at where the options strike price is same as the price of the underlying securities.
  • Beta:

    It is a measurement of relationship between stock price of any particular stock and the movement of whole market.
  • Bid:

    The highest price that a buyer is willing to pay for a particular stock.
  • Blue Chip Stock:

    Stock of well-established and financially sound companies that have a market capitalization in thousands of crores.
  • Board Lot:

    A standard trading unit which is defined by a particular exchange board. The Board lot size depends on the per share price. Some common board lot sizes are 50, 100, 500, 1000 units.
  • Bonds:

    It is promissory note issued by the government or a company to its buyers. It illustrates the specified amount held for a specified time period by the buyer.
  • Book:

    It is an electronic record that is used to manage all the pending buy and sell orders of particular stocks.
  • Bull Market:

    A market situation where the price of the stocks increases rapidly.
  • Call Option:

    It is an option given to investor the right to buy a particular stock at a specified price and time which is not an obligation.
  • Close Price:

    The final price at which the stock is sold or traded on a particular trading day.
  • Convertible Securities:

    A security (bonds, debentures, preferred stocks) by an issuer that can be converted into other securities of that issuer are known as convertible securities.
  • Debentures:

    A form of debt instrument which is not secured by physical assets or collateral.
  • Defensive Stock:

    A type of stock that provides a constant rate of dividends even in the periods of economic downturn.
  • Delta:

    The ratio that compares the change in the price of the underlying asset to the corresponding change in the price of a derivative.
  • Face value:

    It is the cash value or the amount of money the holder of a security is going to earn from the issuer of the security at the time of maturity.
  • One-sided Market:

    A market that only has potential sellers or only potential buyers but not both.