Stock Market Terminology for Beginners

Stock Market Terminology for Beginners (Glossary) – Vocabulary of Trading Terms Meaning and Examples.

Here is Stock Market Terminology for Beginners (Glossary). These Stock Market Terms for Beginners in Indian Stock Market will be very helpful for them. I have tried to explain this Vocabulary of Trading Terms with Meaning and Examples. You can convert this into PDF and save for your future reference.

Stock Market Terminology for Beginners

Here is a dictionary and glossary of share trading terms (terminology) and their meaning. These are most commonly used terms in stock market and share trading.

Aggressive Strategy

Strategy to invest in stocks with aggression and high risk with expectation of good return.

BSE

Bombay Stock Exchange, is an Indian stock exchange located on Dalal Street in Mumbai.

Buy

To invest in shares of a stock for intraday trading, short-term investment or long-term investment.

Buying Limit

Buying Limit or BL is the amount of money an Investor sets aside from his bank account for share trading + (plus) the amount realized from the sale of any shares you may have previously made – (minus) any purchases you have made.

Badla Financing

“Badla Financing” in share trading means something in return. It is a system to carry-forward.

Buy at Open

Placing a buy order before the market opens. The order gets executed at the current opening price.

Capital Gain

Profit from the sale of an investment.

Capital Loss

Loss from sale of an investment.

Close a Position

To end an investment by selling or buying. Closing a long position requires selling, and closing a short position requires buying.

Cover

To purchase a previously sold contract.

Current Market Value

The current value of a portfolio.

Day Trader

A stock trader who buys and sells stocks on the dame day.

Day Trading or Intraday

Buying and selling stocks on the same trading day without taking possession of stocks for a long time.

Demat Account

Demat Account refers to a Dematerialised Account. It is needed for share trading (buy, hold and sell shares / stocks).

Diversification

Creating a portfolio by investing in several stocks, bonds and other investments.

Dematerialization

Dematerialization is the he process by which an investor in share market gets physical share certificates converted into electronic form maintained in an account with the Depository Participant.

Equity

A stock or any other security representing an ownership interest.

Fundamental Analysis of a Company

Examining the financial and managerial aspects of a company prior to investing.

Growth Strategy

Investing in companies that are growing faster than its competitors.

Hedge Fund

Fund for aggressive trading.

Hold

To hold a stock in portfolio for a longer period for a more or better return.

Insider Trading

Transactions in securities of some company executed by a company employee for personal profits is termed as Insider Trading.

Intraday Share Trading

Intraday share trading or day trading is for traders in Stock Market in India who want to gain from market fluctuation in a day but have limited money.

IRA

Individual Retirement Account. A tax-deferred retirement account for an individual that allows him to set aside up to $2,000 per year, with earnings tax-deferred until withdrawals begin at age 59 1/2 or later.

Long-Term Investment

Investment money for a longer period.

Limit Order

Buying or selling stocks on a fixed price rather than the current market price.

Long Position

Buy stocks from the long side with the expectation that prices will rise.

Margin Account

An account with a brokerage company allowing an investor to borrow money from the broker to buy securities.

Margin Trading

Borrowing money from the broker to purchase stock is termed as Margin Trading.

Money Management

The art to manage money with investments, budgeting, banking, and taxes.

NASDAQ

National Association of Securities Dealers Automated Quotations

NIFTY 50

NIFTY 50 is a benchmark index of Indian stock market representing the weighted average of the largest 50 Indian companies listed on the National Stock Exchange.

NSE

National Stock Exchange of India Limited located in Mumbai.

NYSE

New York Stock Exchange

Open a Position

To open an investment buy buying or selling. Opening a long position requires buying, and opening a short position requires selling.

Overbought and Oversold Indicator

Tool to determine if stocks are oversold at higher rates.

PE Ratio

PE Ratio = Current Price of a Stock ÷ Annual Net Income Per Share.

Risk Management

The art to manage risk profile of an investor.

Risk Tolerance

An investor’s potential to handle risks in terms of investment.

Securities Lending

Holder of securities or their agent lends eligible securities to borrowers in return for a fee to cover short positions.

SENSEX

Benchmark index of BSE in India. The Sensex is comprised of Top 30 largest and most actively traded stocks on the Bombay Stock Exchange.

Sell

To sell a stock and book profit or loss.

Short

The state of having sold a stock short without having covered it.

Short Selling

Borrowing a security or commodity futures contract from a broker and selling it with the hope of making profit. All such securities must be later bought back and returned to the broker.

S&P 500

A basket of 500 stocks that are considered to be widely held by investors.

Spread

Difference between the current bid and the current ask price of a stock.

Stock Market Sectors

The part of the economy controlled by different type of companies.

Technical Analysis

A method of evaluating securities through historical prices and other trading variables.

Ticker Symbol

A system of letters used to uniquely identify a stock or mutual fund.

Volatility

The relative rate at which the price of a stock moves up and down.

Volatile Stocks

Stocks that are affected by stock market fluctuations in terms of Price and Volume.

Volume

The number of shares, bonds or contracts traded during a given period, for a security or an entire exchange.

FAQ on Stock Market and Share Trading for Beginners

Conclusion

Hope this Stock Market Terminology with meaning and examples helps all beginners. If you know of any other Stock Market Terminology then please share via comment below. If you found this Dictionary helpful then please share with others. Thanks!

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