Stock market terms starting with A

Accrual Accounting Financial Statements & Accounting qualitative The convention of recording revenue when it is earned and expenses when they are incurred, regardless of when cash moves. Test: the transaction is recognised in the period in which the economic event occurs, not the period in which cash is received or paid

Accrued Interest Bonds & Fixed Income ₹ Interest earned on a bond since the last coupon payment but not yet paid out. Accrued Interest = Coupon Payment x (Days Since Last Coupon / Days in the Coupon Period)

Accumulation/Distribution Line Indicators & Oscillators shares A running total of volume weighted by where each period's close sat within its own range. Money Flow Multiplier = ((Close - Low) - (High - Close)) / (High - Low); A/D = Previous A/D + Multiplier x Volume

Acquisition Corporate Actions, Dividends & Governance qualitative One company obtaining control of another by buying its shares or assets, with the target continuing to exist. Test: the acquirer obtains control, defined in India as 25% of voting rights or the right to appoint a majority of directors

Action Bias Market Psychology & Behavioural Finance qualitative The tendency to prefer doing something over doing nothing, even when action has no expected benefit. Test: activity is undertaken without evidence that it improves the expected outcome

Active Investing Funds, ETFs & Index Investing qualitative An approach that selects securities in an attempt to earn more than the index return. Test: holdings deviate deliberately from the benchmark on the basis of judgement, and success is measured against the benchmark net of fees

Additional Surveillance Measure Indian Market, Regulation & Taxation qualitative An exchange framework placing restrictions on securities showing unusual price or volume behaviour. Test: the security meets criteria on price variation, volume, delivery percentage, concentration or valuation over the review period

Adjusted Price Corporate Actions, Dividends & Governance ₹ A historical price restated to account for corporate actions, so that a price series is comparable over time. Adjustment Factor for a bonus or split = 1 / (New Shares per Old Share); historical prices are multiplied by the cumulative factor

Advance Tax Indian Market, Regulation & Taxation ₹ Income tax paid in instalments during the financial year rather than as a lump sum at the end. Instalments: 15% by 15 June, 45% by 15 September, 75% by 15 December and 100% by 15 March, cumulative of the estimated liability

Advance-Decline Line Indicators & Oscillators ratio (x, times) A running total of the number of advancing securities minus the number of declining securities each period. A/D Line = Previous Value + (Number of Advancing Securities - Number of Declining Securities)

After-Market Order Orders, Execution & Market Structure qualitative An order placed outside trading hours that is queued by the broker and released to the exchange when the next session opens. Test: the order is accepted after the close and submitted to the exchange at or just before the next session's start

Algorithmic Trading Orders, Execution & Market Structure qualitative The use of computer programs to generate and manage orders according to predefined rules, without manual intervention on each order. Test: order generation, timing or routing is determined by a program rather than by a human decision on each individual order

All-or-None Order Orders, Execution & Market Structure qualitative An order that must execute in full or not at all, prohibiting partial fills. Test: the order executes only if the entire quantity can be matched; otherwise nothing is executed

Alpha Risk & Portfolio Management % The return earned above what an asset's risk exposure would have predicted. Alpha = Actual Return - [Risk-Free Rate + Beta x (Market Return - Risk-Free Rate)]

Altman Z-Score Fundamental Analysis & Valuation ratio (x, times) A weighted combination of five financial ratios that estimates a company's likelihood of financial distress. Z = 1.2 x (Working Capital/Total Assets) + 1.4 x (Retained Earnings/Total Assets) + 3.3 x (EBIT/Total Assets) + 0.6 x (Market Value of Equity/Total Liabilities) + 1.0 x (Sales/Total Assets)

American Option Derivatives, Futures & Options qualitative An option that may be exercised at any time up to and including its expiry date. Test: the holder may exercise on any trading day up to expiry, and the writer may be assigned at any time

AMFI Indian Market, Regulation & Taxation qualitative The Association of Mutual Funds in India, the industry body that sets standards and publishes industry data. Test: the entity is a SEBI-registered mutual fund and a member of the association

Amortisation Financial Statements & Accounting ₹ crore The systematic write-off of an intangible asset's cost over its useful life, the intangible equivalent of depreciation. Annual Amortisation = Cost of Intangible Asset / Useful Life in Years

Analysis Paralysis Market Psychology & Behavioural Finance qualitative The inability to reach a decision because of excessive information gathering and deliberation. Test: additional information is sought after the point at which it stops changing the decision

Anchor Investor Indian Market, Regulation & Taxation qualitative A qualified institutional buyer allotted shares in an IPO a day before the issue opens to the public, at a fixed price. Test: the investor is a qualified institutional buyer allotted within the anchor portion, subject to a minimum application size and a lock-in

Anchored VWAP Indicators & Oscillators ₹ A volume-weighted average price calculated from a chosen starting point rather than from the beginning of the session. Anchored VWAP = Sum of (Price x Volume) from the anchor date / Sum of Volume from the anchor date

Anchoring Bias Market Psychology & Behavioural Finance qualitative The tendency to rely too heavily on an initial reference number when making subsequent judgements. Test: estimates shift systematically toward an arbitrary starting value that carries no information about the answer

Animal Spirits Market Psychology & Behavioural Finance qualitative Keynes's term for the instinctive optimism that drives economic and investment activity beyond what calculation justifies. Test: investment and risk-taking rise or fall more than changes in measurable expected returns can explain

Annual General Meeting Corporate Actions, Dividends & Governance qualitative The yearly meeting at which shareholders approve accounts, declare final dividends and elect directors. Test: held within six months of the financial year end and no more than fifteen months after the previous one

Terms starting with A