Financial Glossary

Accumulation

A phase where informed investors gradually build positions in a stock before a significant price move, often visible as sideways trading on high volume.

Also known as: accumulation phase, accumulation zone

Allotment

The process by which shares are distributed to applicants after an IPO or rights issue, based on demand and SEBI-prescribed allocation rules.

Also known as: IPO allotment, share allotment

Alpha

The excess return of an investment relative to its benchmark index, measuring a fund manager or strategy's skill in generating returns beyond market performance.

Also known as: Jensen's alpha

AMO

An order placed outside regular NSE/BSE trading hours (9:15 AM - 3:30 PM) that gets queued and executed when the market opens next.

Also known as: After Market Order, after-hours order

Arbitrage

The practice of simultaneously buying and selling the same asset in different markets to profit from price discrepancies, considered a risk-free profit strategy.

Also known as: arb

Ask Price

The lowest price at which a seller is willing to sell a security, forming one side of the bid-ask quote visible in the order book.

Also known as: offer price, ask

Asset Allocation

An investment strategy that balances risk and reward by distributing a portfolio across different asset classes like equities, debt, gold, and real estate.

AUM

The total market value of all investments managed by a mutual fund, PMS, or financial institution, used as a key measure of fund size and industry scale.

Also known as: Assets Under Management

Average Down

Buying additional shares of a stock at a lower price than the original purchase to reduce the average cost per share of the overall position.

Also known as: averaging down, cost averaging

Averaging Up

Buying additional shares of a stock at progressively higher prices as the position becomes profitable, a strategy favoured by trend-following traders.

Also known as: pyramiding, adding to winners

Basis Point

One hundredth of one percentage point (0.01%), commonly used to express changes in interest rates, bond yields, and fund expense ratios.

Also known as: bps, bp

Bear Market

A market condition where prices decline 20% or more from recent highs, typically accompanied by widespread pessimism and negative investor sentiment.

Also known as: bearish market, market downturn

Bear Trap

A false technical signal that suggests a stock or index is about to decline further, trapping short sellers when the price unexpectedly reverses upward.

Beta

A measure of a stock's volatility relative to the overall market. A beta of 1.0 means the stock moves in line with the market; above 1.0 means more volatile.

Also known as: market beta, beta coefficient

Bid Price

The highest price a buyer is willing to pay for a security. Market sell orders execute at or near the current bid price.

Also known as: bid

Bid-Ask Spread

The difference between the highest bid price and lowest ask price for a security, representing the transaction cost of trading and a measure of liquidity.

Also known as: spread, bid-offer spread

Blue Chip

A stock of a well-established, financially sound company with a long track record of reliable performance, typically part of the Nifty 50 or Sensex.

Also known as: blue-chip stock, large-cap leader

Bollinger Bands

A technical analysis indicator consisting of a middle moving average and two standard deviation bands that expand and contract with volatility.

Also known as: BB

Bond

A fixed-income instrument where an investor lends money to a government or corporation in exchange for periodic interest payments and return of principal at maturity.

Also known as: debt instrument, fixed-income security

Bonus Issue

Free additional shares issued by a company to existing shareholders from its reserves, in a fixed ratio like 1:1 or 1:2, without changing the total investment value.

Also known as: bonus shares, scrip issue, capitalisation issue

Book Value

The net asset value of a company calculated from its balance sheet - total assets minus total liabilities, divided by shares outstanding.

Also known as: BV, net asset value per share

Breakout

A price movement where a stock moves above a resistance level or below a support level with increased volume, signalling the start of a new trend.

Also known as: price breakout

Broker

A SEBI-registered intermediary that executes buy and sell orders on stock exchanges on behalf of investors, providing trading platforms and market access.

Also known as: stockbroker, trading member

BSE

The Bombay Stock Exchange, established in 1875, is Asia's oldest stock exchange. Its benchmark index is the Sensex, comprising 30 of India's largest companies.

Also known as: Bombay Stock Exchange, BSE Limited

Budget

The Union Budget is India's annual fiscal plan presented by the Finance Minister, containing tax proposals, spending plans, and policy changes that significantly impact stock markets.

Also known as: Union Budget, annual budget, fiscal budget

Bull Market

A sustained market condition where stock prices rise 20% or more from recent lows, characterised by optimism, strong economic indicators, and increasing investor confidence.

Also known as: bullish market, bull run

Bull Trap

A false buy signal where a stock breaks above resistance but quickly reverses downward, trapping buyers who entered expecting a sustained upward move.

CAGR

The mean annual growth rate of an investment over a specified period longer than one year, smoothing out volatility to show a consistent yearly return.

Also known as: Compound Annual Growth Rate

Call Option

A derivative contract giving the holder the right, but not obligation, to buy an underlying asset at a specified strike price before or on the expiry date.

Also known as: CE, call

Candlestick Chart

A chart type showing four price points (open, high, low, close) for each time period as a "candle" with a body and wicks, widely used in technical analysis.

Also known as: candle chart, Japanese candlestick

Capital Gain

The profit earned from selling an asset at a higher price than its purchase price. In India, capital gains are categorised as short-term or long-term based on holding period.

Also known as: capital gains, cap gains

Capital Gains Tax

Tax levied on profits from selling capital assets. In India, equity STCG is taxed at 20% and LTCG above Rs 1.25 lakh at 12.5% (post Budget 2024).

Also known as: CGT, STCG, LTCG

Cash Settlement

Settlement of derivative contracts by paying the cash difference between the contract price and market price at expiry, without physical delivery of the underlying asset.

Also known as: financial settlement

Circuit Breaker

An automatic mechanism that halts trading when a stock or index moves beyond specified price limits, designed to prevent panic-driven extreme price movements.

Also known as: circuit limit, price band, trading halt

CMP

The price at which a stock last traded on the exchange. CMP is the real-time reference price for all buy and sell decisions.

Also known as: Current Market Price, LTP, Last Traded Price

Commodity

A basic raw material or agricultural product that can be traded on commodity exchanges, such as gold, silver, crude oil, natural gas, or agricultural goods.

Also known as: commodities

Compounding

The process where returns on an investment generate their own returns over time, creating exponential growth often called the "eighth wonder of the world."

Also known as: compound interest, power of compounding

Consolidation

A period where a stock trades within a defined price range without establishing a clear upward or downward trend, often preceding a breakout.

Also known as: range-bound, sideways market

Correction

A decline of 10-20% in a stock or index from its recent peak, considered a healthy adjustment within a broader uptrend rather than a trend reversal.

Also known as: market correction, pullback

Coupon Rate

The annual interest rate paid by a bond issuer on the bond's face value, expressed as a percentage. A bond with Rs 1,000 face value and 7% coupon pays Rs 70 annually.

Also known as: coupon, nominal yield

CPI

A statistical measure of the average change in prices paid by consumers for a fixed basket of goods and services, used as the headline gauge of retail inflation in India.

Also known as: Consumer Price Index, retail inflation

Credit Rating

An assessment of the creditworthiness of a bond issuer, rated by agencies like CRISIL, ICRA, and CARE on a scale from AAA (highest safety) to D (default).

Also known as: bond rating, debt rating

Day Trading

Buying and selling securities within the same trading day so that all positions are closed before market close, profiting from short-term price movements.

Also known as: intraday trading, day trade

Debt-to-Equity Ratio

A financial ratio measuring a company's total debt relative to shareholders' equity, indicating how much of the business is financed by debt versus owner capital.

Also known as: D/E ratio, leverage ratio, gearing ratio

Delivery

Taking actual ownership of shares by holding them in your demat account beyond the settlement date, as opposed to squaring off intraday positions.

Also known as: delivery trading, CNC, cash and carry

Demat Account

An electronic account that holds shares and securities in digital format, replacing physical share certificates. Mandatory for trading on Indian stock exchanges.

Also known as: dematerialised account, demat

Derivative

A financial contract whose value is derived from an underlying asset such as a stock, index, commodity, or currency. Futures and options are the most common types.

Also known as: F&O, financial derivative

DII

Indian institutional investors - primarily mutual funds, insurance companies, and banks - whose buying and selling activity significantly influences domestic market direction.

Also known as: Domestic Institutional Investors

Diversification

A risk management strategy of spreading investments across different asset classes, sectors, and geographies to reduce the impact of any single investment's poor performance.

Also known as: portfolio diversification

Dividend

A portion of a company's profits distributed to shareholders, typically as cash payments. In India, dividends are taxable in the hands of the recipient at their income tax slab rate.

Also known as: div, cash dividend

Dividend Yield

The annual dividend per share expressed as a percentage of the current stock price, measuring the income return from a stock investment.

Also known as: DY

Dow Theory

A foundational technical analysis framework that identifies market trends through three phases (primary, secondary, minor) and uses index confirmation to validate trend direction.

Also known as: Dow's theory

Drawdown

The peak-to-trough decline in the value of a portfolio or investment, measuring the worst loss an investor would have experienced during a specific period.

Also known as: max drawdown, MDD, peak-to-trough decline

Duration

A measure of a bond's sensitivity to interest rate changes, expressed in years. Higher duration means greater price volatility when rates change.

Also known as: Macaulay duration, modified duration

Efficient Frontier

The curve of portfolios that have the highest expected return for each level of volatility, from a fixed set of assets. It starts at the minimum variance portfolio. Harry Markowitz described it in 1952.

Also known as: Markowitz frontier, mean-variance frontier

Emergency Fund

A cash reserve of 3-6 months of essential expenses kept in liquid, safe instruments to cover unexpected financial emergencies without disrupting long-term investments.

Also known as: rainy-day fund, contingency fund

EPF

A mandatory retirement savings scheme for salaried employees in India where 12% of basic salary is contributed by the employee and matched by the employer, growing at a government-declared interest rate.

Also known as: Employees Provident Fund, PF, Provident Fund

EPS

A company's net profit divided by its total outstanding shares, representing the per-share earning power and one of the most fundamental metrics in stock analysis.

Also known as: Earnings Per Share

Equity

Ownership interest in a company represented by shares of stock. Buying equity makes you a part-owner of the business with claims on its profits and assets.

Also known as: shares, stocks, equities

ETF

A fund that trades on stock exchanges like a regular share, tracking an index, commodity, or basket of assets. Combines diversification of mutual funds with the real-time trading of stocks.

Also known as: Exchange-Traded Fund

Ex-Dividend Date

The first trading day on which a stock trades without the declared dividend. Buyers on or after this date do not receive the upcoming dividend payment.

Also known as: ex-date, ex-div date

Expense Ratio

The annual fee charged by a mutual fund or ETF, expressed as a percentage of assets under management, covering fund management, administration, and distribution costs.

Also known as: TER, Total Expense Ratio

Face Value

The nominal value of a share as stated by the issuing company, typically Rs 1, Rs 2, Rs 5, or Rs 10 in India. It is the base for dividend declaration and accounting purposes.

Also known as: par value, nominal value

Fibonacci Retracement

A technical analysis tool that uses horizontal lines at Fibonacci ratios (23.6%, 38.2%, 50%, 61.8%) to identify potential support and resistance levels during price pullbacks.

Also known as: Fib retracement, Fib levels

Fifty-Two Week High/Low

The highest and lowest prices at which a stock has traded during the preceding 52 weeks (one year), used as key technical reference levels for buy/sell decisions.

Also known as: 52-Week High/Low, 52WH, 52WL, yearly high/low

FII

Foreign institutional entities - hedge funds, pension funds, sovereign wealth funds - investing in Indian markets. Their flows significantly impact market direction and currency.

Also known as: Foreign Institutional Investors, FPI, Foreign Portfolio Investors

Filled Order

An order that has been completely executed on the exchange, with all requested shares bought or sold at the specified (or better) price.

Also known as: executed order, completed order

Financial Goal

A specific, time-bound monetary objective - such as retirement, a child's education, or a home down payment - for which an investor accumulates capital through structured saving and investing.

Also known as: Money Goal, Savings Goal, Investment Goal

FIRE

A personal-finance philosophy aimed at accumulating a corpus large enough to fund living expenses through investment returns alone, allowing retirement well before the conventional age of sixty.

Also known as: Financial Independence Retire Early, financial independence

Fixed Deposit

A savings instrument offered by banks where money is deposited for a fixed tenure at a guaranteed interest rate, providing capital safety and predictable returns.

Also known as: FD, term deposit

Float

The number of shares available for public trading, excluding shares held by promoters, government, and other locked-in investors. Free float determines index weight and liquidity.

Also known as: free float, public float

Forward Contract

A customised, privately negotiated agreement between two parties to buy or sell an asset at a specified price on a future date, unlike standardised exchange-traded futures.

Also known as: forward, forward agreement

FPO

An issuance of additional shares by an already-listed company to raise more capital from the public, either through fresh issue of shares or an offer for sale by existing holders.

Also known as: Follow-on Public Offer, follow-on offering

Future Value

The projected worth of a sum of money or an investment stream at a specified future date, computed by applying an assumed rate of return through compounding.

Also known as: FV, Compound Future Value

Futures

A standardised exchange-traded contract obligating the buyer to purchase, and the seller to sell, an asset at a predetermined price on a specified future expiry date.

Also known as: futures contract, F&O

Gap

A price discontinuity between two consecutive trading periods where no trading occurs, visible as a blank space on a candlestick chart.

Also known as: price gap, gap up, gap down

Goal-Based Investing

An investment approach that organises a portfolio around specific life goals - retirement, child education, home purchase - with each goal funded by a dedicated allocation matched to its time horizon and risk profile.

Also known as: GBI, Goal-Oriented Investing, Bucket Investing

Gold ETF

An exchange-traded fund that tracks the price of physical gold, allowing investors to gain gold exposure without storing physical bullion. Each unit represents approximately 1 gram of gold.

Also known as: gold exchange-traded fund

Good Till Cancelled

An order type that remains active until it is either executed or manually cancelled by the investor, unlike day orders that expire at market close.

Also known as: GTC, GTC order

Greeks

A set of risk measures (Delta, Gamma, Theta, Vega, Rho) that quantify the sensitivity of an option's price to various factors like underlying price, time decay, and volatility.

Also known as: option Greeks, Greek letters

Greenshoe Option

A provision in an IPO that allows the underwriter to sell up to 15% more shares than planned if demand is strong, helping stabilise the stock price after listing.

Also known as: over-allotment option, green shoe

Hedging

A strategy that uses offsetting positions to reduce the risk of adverse price movements in an existing investment.

Also known as: hedge, risk hedge

HNI

An investor applying for more than ₹2 lakh in an IPO, placed in a separate category with its own allocation quota.

Also known as: High Net-Worth Individual, High Networth Investor, bHNI

Holding Period

The length of time an investor owns a security, which determines whether capital gains are taxed as short-term or long-term in India.

Also known as: holding duration

Index

A statistical measure that tracks the performance of a group of stocks, representing a segment of the market.

Also known as: stock index, market index, benchmark index

Index Fund

A mutual fund or ETF that replicates the composition and performance of a specific market index like Nifty 50.

Also known as: passive fund, index tracker

Inflation

The rate at which the general level of prices for goods and services rises, eroding the purchasing power of money over time.

Also known as: CPI inflation, price rise, cost of living increase

Insurance

A financial product that provides protection against financial loss by pooling risk among many policyholders.

Also known as: life insurance, general insurance, term plan

Interest Rate

The cost of borrowing money, expressed as a percentage of the principal, set by the central bank or determined by the market.

Also known as: repo rate, lending rate, coupon rate

Intraday

Buying and selling the same security within a single trading session, with all positions squared off before market close.

Also known as: intraday trading, day trade, MIS

IPO

The process by which a private company offers its shares to the public for the first time, listing on a stock exchange.

Also known as: Initial Public Offering, public issue, primary market offering

Junk Bond

A bond rated below investment grade (BBB-) that offers a higher yield to compensate investors for the elevated risk of default.

Also known as: high-yield bond, non-investment grade bond, speculative bond

KYC

A mandatory identity verification process required before opening a demat, trading, or mutual fund account in India.

Also known as: Know Your Customer, Know Your Client, eKYC, CKYC

Large Cap

A company ranked 1st to 100th by full market capitalisation, typically stable and well-established businesses.

Also known as: large-cap stock, bluechip, mega cap

Leverage

Using borrowed funds or margin to increase the size of a trading position beyond what your own capital would allow.

Also known as: financial leverage, gearing, margin trading

Limit Order

An order to buy or sell a security at a specified price or better, providing price certainty but not execution certainty.

Also known as: LMT, limit price order

Liquidity

The ease with which a security can be bought or sold in the market without significantly affecting its price.

Also known as: market liquidity, stock liquidity, liquid

Listing Price

The price at which a newly issued stock begins trading on the exchange, which may be higher or lower than the IPO issue price.

Also known as: listing day price, IPO listing price, opening price on listing

Load

A fee charged by a mutual fund at the time of purchase (entry load) or redemption (exit load) of fund units.

Also known as: entry load, exit load, sales charge

Long Position

Owning a security with the expectation that its price will rise, allowing you to sell later at a profit.

Also known as: long, going long, buy position

Lot Size

The fixed number of shares or units that constitute one standard derivative contract on Indian exchanges.

Also known as: contract lot, market lot, minimum lot

LTCG

Tax on profits from selling equity held for more than 12 months, levied at 10% on gains exceeding ₹1 lakh per financial year.

Also known as: Long-Term Capital Gains, long-term capital gains tax

MACD

A momentum indicator that shows the relationship between two moving averages, used to identify trend direction and strength.

Also known as: Moving Average Convergence Divergence, MACD indicator, MACD histogram

Margin

The collateral deposited with a broker to cover the credit risk of leveraged or derivative positions.

Also known as: trading margin, initial margin, maintenance margin, SPAN margin

Margin Call

A broker demand to deposit additional funds when the value of your margin account falls below the required maintenance level.

Also known as: margin shortfall, margin penalty

Market Cap

The total market value of a company, calculated by multiplying its current share price by the total number of outstanding shares.

Also known as: market capitalisation, market capitalization, mcap

Market Order

An order to buy or sell a security immediately at the best available current price, guaranteeing execution but not price.

Also known as: MKT, at market, best price order

Maturity

The date on which a bond or fixed-income instrument expires and the principal amount is repaid to the investor.

Also known as: maturity date, bond maturity, tenor, tenure

MCX

India's largest commodity derivatives exchange, facilitating trading in gold, silver, crude oil, natural gas, and other commodities.

Also known as: Multi Commodity Exchange, Multi Commodity Exchange of India

Mid Cap

A company ranked 101st to 250th by full market capitalisation, offering a balance of growth potential and relative stability.

Also known as: mid-cap stock, midcap, mid-size company

Minimum Variance Portfolio

The mix of a fixed set of assets that had the lowest volatility over a measured period. It is the left end of the efficient frontier.

Also known as: minimum volatility portfolio, global minimum variance portfolio, GMV portfolio

Momentum

The rate at which a security's price is accelerating, based on the principle that assets in motion tend to stay in motion.

Also known as: price momentum, momentum trading, momentum factor

Moving Average

A smoothed average of past prices over a specified period, used to identify trends and filter out short-term noise.

Also known as: MA, SMA, EMA, simple moving average, exponential moving average

Mutual Fund

A pooled investment vehicle managed by a professional fund manager that invests in a diversified portfolio of stocks, bonds, or other securities.

Also known as: MF, fund, scheme, AMC fund

NAV

The per-unit value of a mutual fund, calculated daily by dividing total portfolio value minus liabilities by the number of outstanding units.

Also known as: Net Asset Value, fund NAV, scheme NAV

NCDEX

India's leading agricultural commodity derivatives exchange, facilitating trading in spices, oilseeds, grains, and other farm products.

Also known as: National Commodity & Derivatives Exchange, National Commodity Exchange

Nifty 50

India's benchmark stock market index comprising the 50 largest and most liquid companies listed on the NSE.

Also known as: Nifty, CNX Nifty, Nifty Index, NSE Nifty

NPA

A loan or advance on which the borrower has stopped making interest or principal payments for 90 or more days.

Also known as: Non-Performing Asset, bad loan, stressed asset

NPS

A government-sponsored, market-linked retirement savings scheme regulated by PFRDA, where contributions are invested across equity, corporate debt, and government securities until age 60.

Also known as: National Pension System, National Pension Scheme

NSE

India's largest stock exchange by derivatives trading volume and one of the largest globally, headquartered in Mumbai.

Also known as: National Stock Exchange, National Stock Exchange of India, NSE India

OFS

A mechanism for existing shareholders (typically promoters) to sell shares to public investors through the stock exchange, separate from an IPO.

Also known as: Offer for Sale, promoter OFS

OHLC

The four key prices for a security during a given time period: the opening price, highest price, lowest price, and closing price.

Also known as: Open-High-Low-Close, OHLC chart, candlestick data

Open Interest

The total number of outstanding derivative contracts (futures or options) that have not been settled or closed.

Also known as: OI, outstanding contracts, open positions

Option

A derivative contract giving the holder the right, but not the obligation, to buy (call) or sell (put) an asset at a predetermined price before expiry.

Also known as: stock option, call option, put option, options contract

Order Book

A real-time list of all pending buy and sell orders for a security, organised by price level, showing market depth and liquidity.

Also known as: market depth, level 2 data, bid-ask book, DOM

Overbought

A technical condition where a security has risen too quickly relative to its recent trading history, suggesting a potential price pullback.

Also known as: overbought condition, overbought territory

Oversold

A technical condition where a security has fallen too quickly relative to its recent trading history, suggesting a potential price bounce.

Also known as: oversold condition, oversold territory

Oversubscription

When demand for an IPO exceeds the number of shares available, expressed as a multiple (e.g., 10x means 10 times more applications than shares offered).

Also known as: subscription ratio, times subscribed, oversubscribed IPO

P/B Ratio

The ratio of a company's market price per share to its book value per share, used to gauge whether a stock is undervalued or overvalued.

Also known as: Price-to-Book Ratio, PBR, Price to Book

P/E Ratio

The ratio of a company's share price to its earnings per share, measuring how much investors pay for each rupee of profit.

Also known as: Price-to-Earnings Ratio, PER, Earnings Multiple

Penny Stock

A stock trading at a very low price, typically under INR 10-20, often with small market capitalisation and limited liquidity.

Also known as: Microcap Stock, Low-Price Stock

PMS

A professional investment service where a licensed portfolio manager makes buy/sell decisions on behalf of wealthy investors, regulated by SEBI.

Also known as: Portfolio Management Services, Portfolio Management Scheme

Portfolio

The complete collection of financial investments held by an individual or institution, including stocks, bonds, mutual funds, and other assets.

Also known as: Investment Portfolio, Holdings

Position

The quantity of a security currently held by a trader or investor, either long (bought) or short (sold), representing active market exposure.

Also known as: Open Position, Trade Position

PPF

A government-backed long-term savings scheme offering guaranteed, tax-free returns with a 15-year lock-in period, popular for retirement planning.

Also known as: Public Provident Fund

Pre-Market

The 15-minute session before regular market hours on NSE/BSE where orders are collected and matched to determine the opening price.

Also known as: Pre-Open Session, Pre-Market Session

Premium

The price paid by the buyer of an options contract to the seller (writer) for the right, but not the obligation, to buy or sell the underlying asset.

Also known as: Option Premium

Present Value

The current worth of a future sum of money or stream of cash flows, computed by discounting at an assumed rate of return - the inverse of future value.

Also known as: PV, Discounted Value

Price Band

The range within which a stock or IPO can be priced or traded on a given day, set by exchanges or issuers to limit extreme price movements.

Also known as: Circuit Limit, Price Range, IPO Price Band

Put Option

A derivatives contract giving the holder the right, but not the obligation, to sell the underlying asset at a specified price before expiry.

Also known as: PE, Put, Long Put

Rally

A sustained increase in the prices of stocks, bonds, or indices, driven by strong buying pressure and positive market sentiment.

Also known as: Market Rally, Price Rally, Bull Run

Range

The difference between the highest and lowest prices of a security over a specific period, indicating the extent of price movement.

Also known as: Trading Range, Price Range, Consolidation Range

RBI

India's central bank responsible for monetary policy, banking regulation, currency management, and maintaining financial stability.

Also known as: Reserve Bank of India

Real Return

The return on an investment after adjusting for inflation, representing the actual increase in purchasing power rather than the headline nominal growth.

Also known as: Inflation-Adjusted Return, Real Rate of Return

Rebalancing

The process of realigning the weightings of assets in a portfolio by buying or selling holdings to maintain the desired allocation and risk level.

Also known as: Portfolio Rebalancing

Registrar

An entity appointed to manage the share application process during an IPO and maintain shareholder records after listing.

Also known as: Registrar to the Issue, RTA, Registrar and Transfer Agent

Repo Rate

The interest rate at which the RBI lends money to commercial banks against government securities, serving as the benchmark for India's monetary policy.

Also known as: Repurchase Rate, Policy Rate

Resistance

A price level where selling pressure consistently overwhelms buying pressure, preventing the stock from rising further.

Also known as: Resistance Level, Overhead Resistance

Return on Equity

A profitability metric measuring how effectively a company uses shareholders' equity to generate profit, expressed as a percentage.

Also known as: ROE, Return on Net Worth

Risk Contribution

The part of a portfolio's total volatility that comes from one holding. It depends on the holding's weight, its own volatility and how it moves with the other holdings.

Also known as: risk share, volatility contribution, contribution to risk

Risk-Reward Ratio

The ratio comparing the potential loss (risk) to the potential gain (reward) on a trade, used to evaluate whether a trade is worth taking.

Also known as: R:R, RRR, Risk to Reward

RSI

A momentum oscillator ranging from 0 to 100 that measures the speed and magnitude of price changes to identify overbought or oversold conditions.

Also known as: Relative Strength Index

Safe Withdrawal Rate

The percentage of a retirement corpus that can be withdrawn each year, adjusted for inflation, without exhausting the principal over a long retirement horizon.

Also known as: SWR, 4% rule, Bengen rule

Scalping

An ultra-short-term trading strategy that profits from small price movements by executing dozens or hundreds of trades within a single session.

Also known as: Scalp Trading

SEBI

India's capital markets regulator responsible for protecting investor interests, regulating securities markets, and promoting market development.

Also known as: Securities and Exchange Board of India

Sensex

India's oldest stock market index comprising 30 of the largest and most actively traded companies on the Bombay Stock Exchange.

Also known as: BSE Sensex, S&P BSE Sensex, BSE 30

Settlement

The process of transferring securities to the buyer and payment to the seller after a trade is executed, completed in T+1 (one business day) in India.

Also known as: Trade Settlement, T+1 Settlement

Sharpe Ratio

A measure of risk-adjusted return that compares portfolio excess return over the risk-free rate to the portfolio's standard deviation.

Also known as: Reward-to-Variability Ratio

Short Position

A trading position that profits from a decline in the price of a security, established by selling borrowed shares or derivatives contracts.

Also known as: Short, Bearish Position

Short Selling

The practice of selling a security you do not own, with the intent to buy it back at a lower price, profiting from the price decline.

Also known as: Shorting, Selling Short, Going Short

Silver

A precious metal traded as a commodity, used both as an investment asset and in industrial applications, available on MCX in India.

Also known as: Silver Commodity, XAG

SIP

A disciplined method of investing a fixed amount at regular intervals (typically monthly) into a mutual fund, enabling rupee cost averaging.

Also known as: Systematic Investment Plan

Small Cap

Companies ranked 251st and beyond by market capitalisation on Indian exchanges, offering high growth potential with correspondingly higher risk.

Also known as: Small Capitalisation, Small-Cap Stock

Sovereign Gold Bond

Government securities denominated in grams of gold, offering a fixed interest rate plus gold price appreciation, issued by the RBI on behalf of the Government of India.

Also known as: SGB, Gold Bond

Spread

The difference between the highest price a buyer will pay (bid) and the lowest price a seller will accept (ask) for a security.

Also known as: Bid-Ask Spread, Price Spread

Square Off

Closing an open trading position by executing an opposite transaction - selling if long or buying if short - to realise the profit or loss.

Also known as: Close Position, Exit Position, Cover

STCG

Tax levied on profits from selling equity shares or mutual fund units held for less than 12 months, charged at 20% in India.

Also known as: Short-Term Capital Gains, Short Term Capital Gains Tax

Step-Up SIP

A systematic investment plan that automatically increases the contribution amount at fixed intervals - typically annually - to track salary growth and accelerate corpus build-up.

Also known as: Top-Up SIP, Increasing SIP, SIP Booster

Stock Split

A corporate action where a company divides its existing shares into multiple shares, reducing the per-share price proportionally without changing total market value.

Also known as: Share Split

Stop Loss

A pre-set order to automatically sell a security when it reaches a specified price, designed to limit potential losses on a trade.

Also known as: SL, Stop-Loss Order, SL Order

Strike Price

The fixed price at which an options contract holder can buy (call) or sell (put) the underlying asset upon exercise.

Also known as: Exercise Price, Strike

STT

A tax levied on every purchase or sale of securities on recognised Indian stock exchanges, charged at varying rates depending on the instrument type.

Also known as: Securities Transaction Tax

Support

A price level where buying pressure consistently prevents the stock from falling further, creating a floor for the price.

Also known as: Support Level, Floor

Swing Trading

A trading style that aims to capture price moves over several days to weeks, holding positions longer than intraday but shorter than long-term investing.

Also known as: Swing Trade, Positional Trading

Target Corpus

The total nominal amount of money required at a goal's target date to fully fund that goal, calculated by inflating today's estimated cost across the time horizon.

Also known as: Goal Corpus, Required Corpus, Target Amount

TDS

A mechanism where tax is deducted at the point of income generation, applicable to dividends, interest, and certain other payments in Indian financial markets.

Also known as: Tax Deducted at Source

Technical Analysis

A method of evaluating securities by analysing price charts, volume data, and mathematical indicators to forecast future price movements.

Also known as: TA, Chart Analysis, Charting

Thematic Fund

A mutual fund that invests in stocks linked to a specific investment theme - such as infrastructure, ESG, digital India, or manufacturing - cutting across multiple sectors.

Also known as: Thematic Mutual Fund

Tick Size

The smallest possible price increment at which a security can trade on an exchange - INR 0.05 for most stocks on NSE/BSE.

Also known as: Minimum Price Movement, Tick

Trading Volume

The total number of shares or contracts traded in a security or market during a given period, indicating the level of activity and liquidity.

Also known as: Volume, Turnover

Trailing Stop Loss

A stop-loss order that automatically moves in the direction of profit as the price moves favourably, locking in gains while protecting against reversals.

Also known as: TSL, Trailing Stop, Dynamic Stop Loss

Treasury Bill

Short-term government debt securities issued by the RBI with maturities of 91, 182, or 364 days, considered the safest investment in India.

Also known as: T-Bill, Government Treasury Bill

Trend

The general direction in which a security's price is moving over time - uptrend (higher highs and higher lows), downtrend (lower highs and lower lows), or sideways.

Also known as: Market Trend, Price Trend

Underlying Asset

The financial instrument (stock, index, commodity, or currency) on which a derivative contract is based and from which it derives its value.

Also known as: Underlying, Underlying Security

VaR

A statistical measure estimating the maximum expected loss of a portfolio over a given time period at a specified confidence level.

Also known as: Value at Risk, Value-at-Risk

Volatility

A statistical measure of the degree of price variation in a security or index over time, indicating the level of risk and uncertainty.

Also known as: Vol, Price Volatility, Market Volatility

Volume

The total number of shares or contracts traded during a specific period, serving as a key measure of market activity and liquidity.

Also known as: Trade Volume, Market Volume

Wealth Management

A comprehensive financial advisory service combining investment management, financial planning, tax optimisation, and estate planning for high-net-worth individuals.

Also known as: Wealth Advisory, Private Wealth Management

Yield

The income return on an investment, expressed as a percentage of the investment's cost or current market value, typically on an annual basis.

Also known as: Investment Yield, Return, Annual Yield

Zero Coupon Bond

A bond that pays no periodic interest, issued at a discount to face value and redeemed at par, with the return coming entirely from the price appreciation.

Also known as: ZCB, Deep Discount Bond, Strip Bond