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:-
In the stock market, an agent refers to a brokerage firm which buys or sells shares on behalf of the investor.
Lowest price at which an owner agrees to sell the shares.
Assets refers to the property owned by the company such as cash, equipment, land, technology etc.
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.
It is a measurement of relationship between stock price of any particular stock and the movement of whole market.
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.
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.
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.
It is an electronic record that is used to manage all the pending buy and sell orders of particular stocks.
A market situation where the price of the stocks increases rapidly.
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.
The final price at which the stock is sold or traded on a particular trading day.
A security (bonds, debentures, preferred stocks) by an issuer that can be converted into other securities of that issuer are known as convertible securities.
A form of debt instrument which is not secured by physical assets or collateral.
A type of stock that provides a constant rate of dividends even in the periods of economic downturn.
The ratio that compares the change in the price of the underlying asset to the corresponding change in the price of a derivative.
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.
A market that only has potential sellers or only potential buyers but not both.