Market Basics & Instruments — 65 Terms Defined

52-Week High Market Basics & Instruments ₹ The highest price at which a security has traded during the preceding fifty-two weeks. 52-Week High = maximum traded price over the trailing 52 weeks, adjusted for corporate actions

52-Week Low Market Basics & Instruments ₹ The lowest price at which a security has traded during the preceding fifty-two weeks. 52-Week Low = minimum traded price over the trailing 52 weeks, adjusted for corporate actions

Blue-Chip Stock Market Basics & Instruments qualitative An informal label for shares of large, long-established, consistently profitable companies with strong balance sheets. Test: sustained profitability across cycles, low leverage, large market capitalisation, and an uninterrupted record of meeting obligations

Broker Market Basics & Instruments qualitative A SEBI-registered intermediary that routes client orders to an exchange and holds the client's trading account. Test: the firm holds a SEBI registration as a stock broker and is admitted as a trading member of an exchange

Brokerage Market Basics & Instruments ₹ The fee a broker charges for executing a trade, levied either as a flat amount per order or as a percentage of turnover. Brokerage = Turnover x Percentage Rate, or a flat fee per executed order, whichever the broker's schedule specifies

Capital Gain Market Basics & Instruments ₹ 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

Capital Loss Market Basics & Instruments ₹ 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

Closing Price Market Basics & Instruments ₹ 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

Commodity Market Basics & Instruments qualitative 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

Contract Note Market Basics & Instruments ₹ 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

Currency Pair Market Basics & Instruments ₹ 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

Cyclical Stock Market Basics & Instruments qualitative 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

Day High Market Basics & Instruments ₹ The highest price at which a security traded during the current session. Day High = maximum executed trade price between the session open and the current moment

Day Low Market Basics & Instruments ₹ The lowest price at which a security traded during the current session. Day Low = minimum executed trade price between the session open and the current moment

Defensive Stock Market Basics & Instruments qualitative A share whose earnings hold up through downturns because demand for its products barely changes with the economy. Test: earnings show low correlation with GDP growth, typically in consumer staples, pharmaceuticals or utilities

Delivery-Based Trading Market Basics & Instruments qualitative Buying shares with the intention of taking them into a demat account, rather than squaring off within the session. Test: the position survives the session close and settles into the buyer's demat account on T+1

Depository Receipt Market Basics & Instruments shares A negotiable instrument issued in one country that represents shares of a company listed in another. Underlying Shares Represented = Number of Receipts x Receipt Ratio

Dividend Stock Market Basics & Instruments qualitative A share of a company that distributes a substantial and reasonably reliable portion of its profits as dividends. Test: a sustained payout ratio and dividend yield materially above the market average, supported by free cash flow

Equity Market Basics & Instruments ₹ crore The residual ownership interest in a company: what would remain for its owners once every liability had been settled. Equity = Total Assets - Total Liabilities

Equity Share Market Basics & Instruments qualitative The ordinary ownership share of a company, carrying voting rights and a claim on profits only after every other claimant has been paid. Payout rank: secured creditors, then unsecured creditors, then preference shares, then equity shares

Face Value Market Basics & Instruments ₹ The nominal value assigned to a share by the company at issue, used for accounting and for expressing dividends, and unrelated to what the share trades for. Paid-up Share Capital = Face Value x Number of Shares Issued

Follow-on Public Offer Market Basics & Instruments qualitative A public issue of shares by a company that is already listed, made after its initial public offering. Test: the issuer is already listed and is offering further shares to the public at large

Free Float Market Basics & Instruments shares The portion of a company's shares that is actually available for public trading, excluding promoter, strategic and locked-in holdings. Free Float = Total Shares Outstanding - Promoter Holding - Strategic and Locked-in Holdings

Free-Float Market Capitalisation Market Basics & Instruments ₹ crore The market value of only those shares available for public trading, used to weight constituents in Indian indices. Free-Float Market Capitalisation = Market Price x Free Float Shares