Share Trading - Buying and
selling of shares is called as share trading.
Open - The first price at which the
stock opens in the morning when the market opens at 9:00 AM.
High - The stock price reached at the
highest level throughout the trading day
Low - The stock price reached the
lowest level throughout the trading day.
Close - The final price of the stock
when the market closes for a day or the stock price at which it remains at the
time of closing the market at 3:30 PM
Volume - Volume is nothing but quantity
of shares.
Bid - The Buying price is called as
Bid price.
Offer - The selling price is called as
offer price.
Bid
Quantity -
The total number of shares available for buying is called as Bid Quantity.
Offer
Quantity -
The total number of shares available for selling is called as Offer Quantity.
Short
selling -
First selling and then buying (this only happens in day trading) is called as short
sell or shorting of sell.
Transaction - One complete cycle of buying
and selling of shares is considered as one
Transaction.
Squaring
off -
This term is used to complete one transaction. Means if you buy then
have to sell
(means square off) and if you short sell then you have to buy (means
square off).
Limit
Order -
In limit order, the buying or selling price has to be mentioned and when
the share
price comes to that price then the order will get executed with the price
mentioned by
the trader.
Market
Order -
When you put buy or sell price at market rate then the price get
executes at
the current rate of market. The market order get immediately executed at
the current
available price.
Stop
Loss Orders -
As the name indicates the stop loss orders are used to stop or limit
the losses in
the share market.Stop loss orders are limit price set by traders at which
the order will automatically enter or exit the trade.The stop loss
order is placed below the current market price of the stock to stop
the loss in buy position and above the current market price to stop
the loss in short sell position.
Margin Trading - Margin amount is the amount given by broker for day
trading. The trading done using margin amount is called as margin trading.If
you use margin amount then the trades has to be closed on the same day.
Alpha
stock -
A weighted measure of how much a stock has risen or fallen over a certain
period, usually a year. Generally, more emphasis is placed on recent activity
by assigning higher weights to it than those assigned to earlier movements.
This helps to give a return figure that has a greater focus on the most current
period and is a more relevant measure for short-term analysis. If the stock was
up over the period, it will have a positively weighted alpha.
An unchanged stock price has a small weighted alpha. A stock whose
price has fallen over the period will have a negatively weighted alpha. Technical analysts use this measure
to identify companies that have shown a strong trend over the past
year and, more specifically, to focus their attention on companies whose
momentum is building.
Beta
Stock -
Beta is a measure of a stock's volatility in relation to the market. By
definition, the market has a beta of 1.0, and individual stocks are ranked
according to how much they deviate from the market. A stock that swings more
than the market over time has a beta above 1.0. If a stock moves less than the
market, the stock's beta is less than 1.0. High-beta stocks are supposed to be
riskier but provide a potential for higher returns; low-beta stocks pose less
risk but also lower returns.
Bull
Phase -
when the market keeps going up it is called as Bull phase or cycle.
Bear
Phase -
when the market keeps going down it is called as Bear phase or cycle.
Forex
Trading -
Trading done in currency is called as Forex trading
Online
Share Trading -
Buying and selling of shares through internet during market hours is called as
online share trading
Offline
Share Trading -
Buying and selling of shares through broker and placing orders through
telephone is called as offline share trading. The
offline share
trading can be done during live market hours and also when the market is closed
by placing order through telephone to broker.
Mutual Fund - It is a financial
instrument which collects money from all investor and then invests in financial
instruments like stocks, bonds, etc. It is managed by fund manager.
Investor - The person investing the
money in stocks for long term based on the fundamentals of the company is
called as investor. Long term like 2 to 5 years or even for 10 years.
Trader - The person who trades to
make quick money in share market is called as trader. The trader is not concerned
about the company’s fundamentals. The trader waits for any type of news which
gives an opportunity to make money in a day or in a week or in a month.
Penny stock - The stock price less then
Rs 1 is called as penny stock.
Large Cap stocks - Shares of those companies
with a market capitalization over Rs. 1000 crores is called as large cap stocks
Mid Cap stocks - Shares of those companies
with a market capitalization between Rs. 100 crores and Rs.1000 crores is
called as Mid cap stocks
Small cap stocks - Shares of those companies
with a market capitalization less then Rs. 100 crores is called as Small cap
stocks
Future
Derivatives - It is the financial instrument whose price depends on the
underlying instrument.Underlying instrument can be stock, currency, commodity
etc. It has expiry of one month. Every last Thursday it expires. For more
information please visit at www.daytradingshares.com/futures_options_derivatives_trading.html
Option - Please visit this link to
get clear understanding of option
http://www.daytradingshares.com/futures_and_options/option_trading_stocks.html
Short Selling - Selling of shares and
then buying them at lower price to generate profits is called as short selling.
Short selling of shares is done only during day trading. Futures and
options can also be short selled
Buy Back of shares - The buying of shares by a
company from open market in order to reduce the number of shares in the market.
Companies will buy back shares to increase the value of shares whenever company
feel the share price is undervalued in the open market.
IPO - It stands for Initial public
offering. when a company issues common shares to the public for the first time.
They are often issued by smaller, younger companies seeking capital to expand,
but can also be done by large privately-owned companies looking to become
publicly traded.
FPO - The basic difference between Initial
Public Offer (IPO) and Follow on Public Offer (FPO) is as the names suggest IPO
is for the companies which have not listed on an exchange and FPO is for the
companies which have already listed on exchange but want to raise funds by
issuing some more equity shares.
Right Issue - Issuing rights to a
company's existing shareholders to buy a proportional number of additional
shares at a given price (usuallyat a discount) within a fixed period.
Day trading - Buy and selling of shares
in a day is called as day trading. Day trading can also be done in futures and
in options.
Volatility in Share market -
When the share price moves up and down without proper direction is called as
volatility.
Volume - Volume is nothing but
quantity in share market.
Stock Broker - The person or company
authorized by stock exchange like NSE and or BSE to carry out buying and
selling of shares on behalf
of others.
Stock Sub
Broker - The broker assigns sub broker. The sub broker also
performs same tasks like broker but he communicates with broker and not with
stock exchanges.
Systematic
Investment Plan (SIP) - A systematic investment
plan is a way to invest a fixed amount in stocks or in mutual funds regularly.
Net Asset
Value (NAV) - Net Asset Value is the market value of the assets of the
scheme minus its liabilities. The per unit NAV is the net asset value of the
scheme divided by the number of units outstanding on the Valuation Date. Thus,
NAV of a mutual fund unit is nothing but the 'book value.'
Annual
General Meeting (AGM) -
Technical
Analysis - The stock price prediction based on
charts and indicators is called as technical analysis. Technical Analysis is
irrespective of company’s fundamentals. Technical analysis is used for short
term, mid term and also for long term.
Fundamental
Analysis - The stock price prediction based
on company’s growth/fundamentals. The long term investment is done based on
fundamental analysis.
Primary
Market - The new shares (IPO) are issued
in Primary market. Once issued they are listed in secondary market. It is not
possible to trade in primary market. After listing in secondary market the
trading takes place on those shares.
Secondary
market - Secondary market is nothing but
share market. Buying and selling of shares in secondary market means buying and
selling of shares in stock market.
Dividend -
The company share some of its profits to its shareholder is called as dividend.
Interim Dividend - Distribution of profits
to shareholders before a company’s annual earnings have been computed, or
at any time between two successive annual general meetings (AGM). Firms paying
interim dividend try to be reasonably certain they can afford it, and make the
necessary adjustments (if any) in the subsequent or year-end dividend payments.
Final Dividend - The final dividend
declared at a company's Annual General Meeting (AGM) for any given year is
called as final dividend.
Bonus shares - Free shares of stock
given to current shareholders, based upon the number of shares that a
shareholder owns.
National Stock Exchange (NSE) -
The National Stock Exchange (NSE) is a stock exchange located at Mumbai, India.
It is the 10th largest stock exchange in the world by market capitalization and
largest in India by daily turnover and number of trades, for both equities and
derivative trading. NSE and the Bombay Stock Exchange are the two most significant
stock exchanges in India, and between them are responsible for the vast majority
of share transactions. The NSE's key index is the S&P CNX Nifty also called
as NIFTY. Nifty index consist of 50 major stocks weighted by market
capitalisation. Nifty is the barometer on the NSE exchange.
Bombay Stock Exchange (BSE) -
The BSE is a stock exchange located on Dalal Street, Mumbai and is the oldest
stock exchange in Asia. The BSE has the largest number of listed companies in
the world.It has also been cited as one of the world's best performing stock market.
As of December 2010, there are over 5,034 listed Indian companies and over 7700
scrips on the stock exchange. The Bombay Stock Exchange has a significant
trading volume. The
SENSEX is the index on BSE also called the "BSE 30", is
a widely used market index in India. Sensex consist of 30 major stocks weighted
by market capitalisation. Sensex is the barometer on the BSE
exchange.
Mini Nifty - The NSE introduced Mini nifty
comprising of 20 companies. Small traders
Bank Nifty - Bank Nifty is the barometer used to
measure the banking index. Bank nifty
CNX IT - CNX IT is the barometer used to
measure the IT index. CNX IT consist of Top
Option - Option is a financial product whose
price is based on its underlying instrument
In other words - Options are derivative instruments, meaning that
their prices are
Call Option - Call option is bought
when the underlying (Nifty, Jr.Nifty, Bank Nifty etc
Put Option - Put option is bought when the
underlying (Nifty, Jr.Nifty, Bank Nifty etc or
52 Week High price (52 WH) - The highest price
of the stock touched in a year is called as 52 week high price.
52 Week Low (52 WL) - The lowest price of the
stock touched in a year is called as 52 week low price
Depository participant (DP) - Depository is an
institution or a kind of organization which holds securities with it, in which
trading is done
Market Trend - It is also called as
market direction. Bearish trend means market direction is going down. Bullish
trend means market direction
Upper Circuit - when the index or stock
goes up by more than a fixed limit the exchange places the upper circuit for
that stock or index.
Lower Circuit - When the index or stock
goes down by more than a fixed limit the exchange places the lower circuit for
that stock or index.
Demat Account - The account used to save
the shares is called as demat account. The shares are saved in electronic
format in demat
Securities Transaction Tax (STT) is
a tax being levied on all transactions done on the stock exchanges. Securities
Transaction Tax is
If you are an investor and not trader:
1. If you are selling the shares after 12 months, then it comes
under long term capital gains and you need not have to pay any tax on that
2. If you are selling the shares before 12 months then you have to
pay short term capital gains @10% flat on the gain.
If you are a trader and not an investor:
All your gains will be treated as trading (Business) and you have
to pay tax as per tax sables. In this case the transaction tax paid by you can
be claimed back/adjusted in tax to be paid.
Disclaimer
The
information provided on this website is for educational purpose and not to be
considered as investing or trading advice.
The investment and trading has to be done on sole discretion and www.daytradingshares.com or any person related to this site Should not be held responsible for the outcome.
The investment and trading has to be done on sole discretion and www.daytradingshares.com or any person related to this site Should not be held responsible for the outcome.
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