12 Basic Indian Stock Market Trading Terms You Should Know.

1. Share:

A Share in terms of stock market, means a unit of capital which is not divisible. If you have a share of a certain company, it means you are the shareholder. It establishes you as the owner.

2. Stock:

If you one more than one share of the company, or different companies, you will be said to have ‘stocks’. We also refer to stocks when we say ‘portfolio of shares’. You will hear the word ‘equity’, ‘equity trading’, so these are different words, but with the same meaning, that is ‘trading of shares’.

3. Stock Exchange:

Its a market for trading of stocks, it enables you to buy and sell shares, notes, bonds and various other types if securities. India has two big stock exchanges- BSE (Bombay Stock Exchange), NSE (National Stock Exchange). Other famous stock markets of different countries are enlisted below;

United States: NewYork Stock Exchange.

United Kingdom: London Stock Exchange.

Japan: Tokyo Stock Exchange.

China: Shanghai Stock Exchange.

Canada: Toronto Stock Exchange.

Switzerland: SWX Swiss Exchange.

Denmark, Sweden, Finland: OMX Nordic Exchanges.

4. Trading Session:

Traders can buy and sell stocks between 9:15-3:30 PM, and this frame of time is called trading session. Although you can trade between 9-9:15, which is pre-opening session, you are not advised to do so as this is the time when stocks are flooding in and settling.

5. Intraday:

When the buying of stocks and selling of stocks happens on the same day, it is called intraday trading. This is possible to do only in market hours. If you buy today and sell tomorrow, it won’t be considered intraday. Purpose of intraday is not investing, but to enjoy the profits by playing on the fluctuations.

6. Bull Market:

It is a period of time during which the prices of securities are rising that’s the value of stocks is going up. Generally, public purchases more stocks seeing the increase in the value of stocks. You will come across to a sentence, “The market looks bullish.”, while people forecast.

7. Bear Market:

It is the opposite of Bull. It is the period of time when prices of securities are falling and people are fearful seeing prices falling, so they avoid buying and sell their current holdings. You will come across to a sentence, “The market looks bearish.”, while people forecast.

8. Portfolio:

Group of all the stocks that you are holding with their quantities and current positions is called stock portfolio. Portfolio should be updated frequently to manage the risk of market and to obtain returns.

9. Business Day:

Is considered to be working days on which trading can be done that is: Monday to Friday, excluding public holidays.

10. Securities:

Also called as investment instruments, includes products like debentures, bonds, options, shares, notes & warrants. Securities can be bought and sold in financial market.

11. Delivery:

If you buy a share and hold it for more than 1 day, then it is said to be delivery. It doesn’t matter whether you sell it tomorrow, after 4 days, 2 weeks, 6 months or 10 years. If you hold the stock for more than one day, then it is called delivery. As mentioned above, if you buy and sell on the same day, it is called intraday.

12. Index:

There are many companies listed on stock exchange, so if

It is very difficult to keep track fluctuations of different stocks, since many companies are listed on stock exchange. Therefore, to understand the performance of the market, stock market index is formed. Index consists of small selected companies stocks from all different industry leaders. And it monitors the fluctuations and indicates how overall market is performing.

Below mentioned are Indices used in different countries:

India: SENSEX.

United States: Dow Jones.

London: FTSE 100.

China: SHANGHAI 50.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s