Stock Market Glossary

📘 A–Z Abbreviations, Definitions, Terminology

A

  • AGM (Annual General Meeting): A yearly meeting of a company’s shareholders to discuss performance, dividends, and future plans.
  • Asset Allocation: The process of dividing investments among different asset categories like stocks, bonds, and cash.
  • Ask Price: The lowest price a seller is willing to accept for a security.

B

  • Bear Market: A market condition where prices are falling or expected to fall, typically by 20% or more.
  • Bid Price: The highest price a buyer is willing to pay for a security.
  • Blue Chip Stock: Shares of large, reputable, and financially sound companies with a history of reliable performance.
  • Book Value: The net value of a company’s assets as recorded on the balance sheet.
  • Broker: A person or firm that executes buy and sell orders for investors in exchange for a fee or commission.

C

  • Call Option: A financial contract giving the buyer the right to buy a stock at a specific price within a certain time.
  • Capital Gain: Profit earned from the sale of an asset like stocks or real estate.
  • Circuit Breaker: A mechanism to temporarily halt trading on an exchange to curb panic-selling.
  • Clearing House: An intermediary between buyers and sellers in financial markets that ensures trade settlement.
  • CMP (Current Market Price): The latest trading price of a stock on the exchange.

D

  • Day Trading: Buying and selling financial instruments within the same trading day.
  • Debt Instrument: A tool for raising capital through borrowing, such as bonds or debentures.
  • Depository: An institution that holds securities in electronic form (e.g., NSDL, CDSL in India).
  • Dividend: A portion of a company’s earnings distributed to shareholders.

E

  • EPS (Earnings Per Share): A company’s profit divided by the number of outstanding shares.
  • ETF (Exchange-Traded Fund): A type of investment fund traded on stock exchanges, like individual stocks.
  • Equity: Ownership in a company, typically in the form of shares.
  • Ex-Dividend Date: The cutoff date to be eligible for the next dividend payment.

F

  • Face Value: The nominal value of a share or bond as stated by the issuer.
  • FII (Foreign Institutional Investor): An investor or investment fund registered in a country outside of the one it is investing in.
  • Fundamental Analysis: Evaluating a stock by analyzing financial statements, management, and market position.

G

  • GDP (Gross Domestic Product): The total value of goods and services produced in a country in a given period.
  • Growth Stock: A stock expected to grow at an above-average rate compared to the market.

I

  • Index: A statistical measure of the performance of a group of stocks (e.g., NIFTY 50, SENSEX).
  • IPO (Initial Public Offering): The first sale of a company’s shares to the public.
  • Intraday Trading: Buying and selling stocks within the same trading day.

L

  • Limit Order: An order to buy or sell a stock at a specific price or better.
  • Liquidity: The ease with which an asset can be converted into cash.

M

  • Market Capitalization: The total market value of a company’s outstanding shares.
  • Mutual Fund: An investment vehicle that pools money from many investors to buy a diversified portfolio of securities.

N

  • NAV (Net Asset Value): The per-unit value of a mutual fund.
  • NIFTY 50: A benchmark index of the National Stock Exchange (NSE) comprising 50 major stocks.

P

  • P/E Ratio (Price-to-Earnings Ratio): A valuation ratio of a company’s current share price compared to its per-share earnings.
  • Portfolio: A collection of financial investments like stocks, bonds, and mutual funds.
  • Promoter: An individual or group that establishes a company and holds a significant stake in it.

R

  • REIT (Real Estate Investment Trust): A company that owns and operates income-generating real estate.
  • Rights Issue: An offer to existing shareholders to buy additional shares at a discount.

S

  • Securities: Tradable financial assets such as stocks, bonds, and derivatives.
  • Sensex: A benchmark index of the Bombay Stock Exchange (BSE) comprising 30 major stocks.
  • Short Selling: Selling borrowed shares with the intention of buying them back at a lower price.
  • SIP (Systematic Investment Plan): A method of investing a fixed amount regularly in mutual funds.
  • Stop Loss: An order placed to sell a security when it reaches a certain price to limit losses.

T

  • Technical Analysis: Analyzing price charts and trading volumes to forecast future stock movements.
  • Trading Volume: The number of shares or contracts traded in a security or market during a given period.

U

  • Upper Circuit / Lower Circuit: Price bands set by exchanges to prevent extreme volatility in stock prices.

V

  • Volatility: A statistical measure of the dispersion of returns for a given security or market index.

Y

  • Yield: The income return on an investment, usually expressed as an annual percentage.