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Market Basics & Instruments

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Market Basics & Instruments

Capital Gain

The profit made when a capital asset is sold for more than its cost of acquisition.

Capital Gain = Sale Consideration - Cost of Acquisition - Transfer Expenses
Market Basics & Instruments

Capital Loss

The loss incurred when a capital asset is sold for less than its cost of acquisition.

Capital Loss = Cost of Acquisition + Transfer Expenses - Sale Consideration
Market Basics & Instruments

Closing Price

The official end-of-day price of a security, computed in India as the volume-weighted average price of trades in the last thirty minutes.

Closing Price = VWAP of all trades between 15:00 and 15:30
Market Basics & Instruments

Commodity

A standardised raw material or primary product that is traded in interchangeable units, such as gold, crude oil or cotton.

Test: units of the good are fungible against a published quality specification, so one unit is a perfect substitute for another qualitative
Market Basics & Instruments

Contract Note

The legally binding document a broker must issue after each trading day, itemising every trade executed and every charge levied.

Net Amount = Trade Value +/- Brokerage + STT + Exchange Charges + SEBI Fees + Stamp Duty + GST
Market Basics & Instruments

Currency Pair

A quotation of one currency's value in terms of another, such as USD/INR, where the first currency is bought or sold against the second.

Quote convention: BASE/QUOTE, where the price states how many units of the quote currency buy one unit of the base
Market Basics & Instruments

Cyclical Stock

A share whose earnings rise and fall with the economic cycle, typically in sectors such as metals, cement, autos and construction.

Test: earnings correlate strongly with GDP growth, commodity prices or credit conditions, with wide peak-to-trough swings qualitative