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:-
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Agent:
In the stock market, an agent refers to a brokerage firm which buys or sells shares on behalf of the investor.
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Ask/Offer:
Lowest price at which an owner agrees to sell the shares.
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Assets:
Assets refers to the property owned by the company such as cash, equipment, land, technology etc.
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Bear Market:
It is a market situation where the stock prices fall consistently.
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At the money:
A situation at where the options strike price is same as the price of the underlying securities.
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Beta:
It is a measurement of relationship between stock price of any particular stock and the movement of whole market.
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Bid:
The highest price that a buyer is willing to pay for a particular stock.
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Blue Chip Stock:
Stock of well-established and financially sound companies that have a market capitalization in thousands of crores.
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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.
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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.
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Book:
It is an electronic record that is used to manage all the pending buy and sell orders of particular stocks.
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Bull Market:
A market situation where the price of the stocks increases rapidly.
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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.
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Close Price:
The final price at which the stock is sold or traded on a particular trading day.
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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.
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Debentures:
A form of debt instrument which is not secured by physical assets or collateral.
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Defensive Stock:
A type of stock that provides a constant rate of dividends even in the periods of economic downturn.
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Delta:
The ratio that compares the change in the price of the underlying asset to the corresponding change in the price of a derivative.
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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.
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One-sided Market:
A market that only has potential sellers or only potential buyers but not both.
