ACQUISATION:



The purchase of one corporation by another, through either the purchase of its shares or the purchase of its assets.



ACTIVE MARKET:


Market characterized by large volume, either for a specific share or an entire exchange.


Usually, more active markets are more liquid.



ADVANCE-DECLINE RATIO:


This index represents the total difference between the number of advancing and declining share prices.


It is an indicator for market movements.


For example, if 200 shares have advanced and 100 shares declined on a particular day, the AD-index is 2(200/100).


This index value is more than one indicates a bullish trend and less than one bearish trend.



A GROUP SHARES:


Shares having high liquidity, company having large market capitalization and capital appreciation.



ANNUAL GENERAL MEETING:


Directors of the company report to the share holders on the years performance.


The chief of the company comments on the future outlook of the company and answers of the questions from the share holders.


Notice of the meeting, along with a copy of the annual report has to be necessary sent to every share holder.



APPRECIATION:


Increase in the price of share.


Increase in the value of assets, which is called capital appreciation.



AVERAGING:


Buying a share in different prices, in different times, in different quantities or same quantities. So, that an average price is obtained.



BEAR CYCLE:


Share price generally decline in the stock market over a period of time.




BEAR MARKET:


A prolonged period in which investment prices fall.


Bear market usually occur when the economy, is in a recession and unemployment is high.



BEST PRICE:


The price which the people judges to be the most advantageous for buying or selling.



BID PRICE:


This is the highest price that someone is willing to pay to buy a share or sell a share.



BLOCK TRADE:


When at least 10,000 shares of a stock are bought or sold in a single transaction.



BLUE CHIPS:


A nationally recognized, will-established and financially sound company.


Blue chip companies are expected to continue sustained growth in the future.



BOND:


A debt instrument issued for a period of more than one year with the purpose of raising capital by borrowing.


A bond is a promise to repay the principle along with interest on a specified date.


Company bonds are called Debentures, which are secured by mortgage against company assets, as distinguished from fixed deposits accepted by companies, which are unsecured.


Treasury bonds are generally considered the safest unsecured bonds, since the possibility of the treasury defaulting on payments is almost zero.



BONUS ISSUE:


Share in a company which are issued free to existing shareholders, sometimes called a scrip issue.


A company might make a bonus or scrip issue as an alternative to increasing its dividend payout.


New shares are issued to shareholders in proportion to their holdings.



BOOK LOSS:


Loss not actually sustained, as the investor has not sold when the price fallen.



BOOK PROFIT:


A gain on an investment that has not yet been realized. That is, book profit occurs when the current price of a security is higher than the price the holder paid for it, but the holder still owns the security.



BOOK VALUE:


The value at which an asset is carried on a balance sheet of a company.



BOTTOM FISHER:


A trader or investor who looks for bargains among stocks or other investments whose prices have fallen sharply.


When a market rises after a period of a strong decline, traders say that bottom fishers have come into market.



BOTTOM LINE:


The financial statement that shows net profit or loss of a company.



BOTTOM OUT:


When share prices have hit their lowest and started to rise again on their path.



BOUGHT DEAL:


An offering in which the underwriter buys all shares and resells them. When they are willing to take this risk it is a sign that they have a high degree of confidence in the issues success.

 BREADTH OF THE MARKET:


Indicated by the percentage of stocks participating in a particular market move. If two thirds of the shares listed in a stock exchange participate during a trading session, the market is said to have a good exchange.



BREAKOUT:


When shares move between the support level and the resistance level for some time and then move upwards or downwards beyond the line.



BROAD MONEY:


Money held for spending and/or as a store of value, as distinguished from narrow money, which is predominantly for spending.



BROKER:


A member of the stock exchange. To act as an intermediary between buyer and seller.



BUBBLE:


When stock prices are pushed up to an abnormally upward direction, unsupported by any fundamentals it is said to have developed a bubble.



BULL CYCLE:


Share prices generally rising in the stock market over a period of time.



BULL MARKET:


Prolonged rise in the share prices, sustained by buying pressure of actual investors.

 BULL RUN:


Continue uptrend of a bull market.



BUY AND SELL STRATEGY:


Buy shares at dips and sold at peaks.



BUY BACK:


A company repurchase of a portion of its own outstanding shares.



CAPITAL:


The net worth of a business.



CAPITAL ACCOUNT:


An account that tracks the movement of funds for investments and loans into and out of a country. The capital account makes up part of the balance of payments.



CAPITAL GAIN:


When a stock is sold for a profit, the capital gain is the difference between the net sale price and the net cost price.



CAPITAL LOSS:


When a stock is sold for a loss, the capital loss is the difference between the net cast price and the net sale price.



CAPITAL MARKET:


A market where debt or equity shares are traded.



CARRY FORWARD:


Payment for the purchase of securities from one settlement to another.



CIRCUIT BREAKER:


Temporarily halt automated trading when the index spurts or plunges by more than 5%.



CLOSE-A-POSITION:


To eliminate an investment position.


Either selling a long position or covering a short position.



CLOSING PRICE:


The price of the last transaction completed during a day’s trading session.



CONSOLIDATION:


A continued upward or downward trend, within a narrow range of share price of a company.



CONTRACT NOTE:


A note sent by a broker to his client contract note having written details of an agreement to buy or sell securities.



CORRECTIONS:


Downwards the price of any individual share or shares.

 DAY TRADING:


Buying and selling the same share during a single day.



DEBT-EQUITY RATIO:


Also called financial leverage ratio.


Debt/equity ratio is equal to long-term debt divided by common shareholders’ equity.



DEBT INSTRUMENT:


A debt instrument can be a promissory note, a bill of exchange, bond, or any other legally binding document.



DEFENSIVE STOCK:


Shares which are more stable than other and tend to fall less in a bear market, providing a safe return of the investor’s money.

 DEFLATION:

Opposite of inflation.


It is a reduction in national income and output.


During a deflationary period the stock market usually suffers from depression.



DELISTING:


To remove a stock from an exchange, usually due to a violation or failure to meet certain financial requirements




DELIVERY PRICE:


The price at which the futures contract is settled, when delivery is made.



DIVERSIFICATION:


To reduce the risk in a portfolio by combining a variety of investments.



DIVIDEND YIELD:

Annual dividends per share divided by price per share.



DOUBLE BOTTOM:


Chart pattern in Technical Analysis, which shows a drop in price, a subsequent recovery and another drop and recovery.



DUAL LISTING:


Listing of a share in more than one stock exchange.


For enhancing the share’s liquidity and volume of trading.




EARNINGS PER SHARE:

Total earnings divided by the number of shares outstanding.



ECONOMIC GROWTH RATE:


Annual rate at which an industry’s income increases. This is adjusted for inflation to arrive at the real economic growth rate.



GDP (GROSS DOMESTIC PRODUCT):

The total market value of all the goods and services produced within the borders of a nation during a specified period.


GDP=C+G+I+NX.


Where,


“C” is equal to all private consumption, or consumer spending, in a nation’s economy.


“G” is the sum of government spending.


“I” is the sum of all the country’s businesses spending on capital.


“NX” is the nation’s total net exports, calculated as total exports minus total imports.


NX = Exports – Imports.



INFLATION:

An increase in the price you pay for goods.


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