Stock Market Terms and Definitions

What is a Stock?

The capital raised by a company or corporation in the course of the issue and subscription of shares.

What is Equity?

This refers to the ownership interest in a company and can also refer to the value of the shares issued by a company

What is Futures?

Futures is an agreement between two parties to buy or sell commodities or shares at an agreed price but delivered and paid for later.

What is a Derivative?

Derivative refers to a contract that gets its value from the prices and index of an underlying security that can be a stock, currency or commodity.

What is Option?

Option gives the right, but not the obligation to buy or sell an asset at a fixed price, on or before a designated future date.

What are Commodities?

A commodity can be termed as a raw material or agricultural product that traders and investors can buy or sell. Example: Crude oil, Copper, Natural gas

What is swap?

swap is a financial transaction in which two bodies agree to make payments to each other as per mutually agreed rules.

What is a call?

call refers to an option that gives the investor the right to buy an asset at a certain price within a definite time.

What is a Put?

Put refers to the option that gives an investor the right to sell a certain number of securities at a particular price before a fixed date.

What is a Bull Market?

A Bull market can be termed as a cheerful market with plenty of buyers but few sellers.

What is a Bear Market?

A Bear market can be termed as a puny market where sellers outnumber buyers.

Who is a Broker?

An individual who is a member of the stock exchange and acts as an mediator between the buyer and seller in exchange for payment of a commission.

What is brokerage?

Commission paid to the broker and this is fixed by the Stock Exchange in India.

Intraday Trading: Buying and selling securities on the same day without taking delivery including commodity online trading.

What is Index?

A measure of the stock market calculated from the prices of some definite stocks, which helps investors and analysts to describe the market.

What is a Blue-chip?

Blue-chip can be termed as stocks that top the charts in terms of returns, yield, marketability, safety, and security.

What is a return?

The change in the value of a portfolio over a certain time period can be termed as returns.

What is Dividend?

The profit paid out by a company to shareholders is known as dividend.

What is Zero Brokerage model?

This is a model where the subscription to a plan is done and zero brokerage is paid on all the trades.

What is the lowest brokerage plan?

The stock Brokerage is fixed by the Stock Exchange which would be the maximum. But brokers can offer discounts to clients.