Stock market terms starting with C

Calendar Spread Derivatives, Futures & Options ₹ Writing an option in a nearer expiry and buying the same strike in a further expiry, or the equivalent in futures. Net Debit = Far Expiry Premium - Near Expiry Premium, at the same strike

Call Auction Orders, Execution & Market Structure ₹ A matching mechanism that collects orders over a window and executes them all at a single price that maximises traded quantity. Equilibrium Price = the price at which the largest quantity can be matched; ties are broken by minimum unmatched quantity

Call Option Derivatives, Futures & Options ₹ An option giving its buyer the right to buy the underlying at the strike price on or before expiry. Payoff at expiry for the buyer = max(Spot - Strike, 0) - Premium Paid

Callable Bond Bonds & Fixed Income qualitative A bond the issuer may redeem before maturity, at a stated price on stated dates. Test: the terms give the issuer an option to redeem early; the investor's return should be computed to the earliest call date

Calmar Ratio Risk & Portfolio Management ratio (x, times) Annualised return divided by the maximum drawdown over the same period. Calmar Ratio = Compound Annual Growth Rate / Maximum Drawdown

Candlestick Technical Analysis & Chart Patterns qualitative A chart element showing a period's open, high, low and close as a body between open and close with wicks to the extremes. Body = distance between Open and Close; Upper Wick = High - max(Open, Close); Lower Wick = min(Open, Close) - Low

Capacity Utilisation Economy, Macro & Market Cycles % The proportion of installed productive capacity that is actually being used. Capacity Utilisation = Actual Output / Maximum Possible Output x 100

Capital Allocation Fundamental Analysis & Valuation qualitative Management's decisions about where to deploy the cash a business generates: reinvestment, acquisitions, debt repayment, dividends or buybacks. Test: incremental capital deployed earns a return above the cost of capital, judged over several years

Capital Asset Pricing Model Fundamental Analysis & Valuation % A model that estimates the return required on an asset as the risk-free rate plus a premium proportional to its market risk. Expected Return = Risk-Free Rate + Beta x (Expected Market Return - Risk-Free Rate)

Capital Expenditure Financial Statements & Accounting ₹ crore Spending on acquiring or improving long-lived assets, recorded on the balance sheet and expensed over time through depreciation. Capital Expenditure = Increase in Gross Block + Increase in Capital Work in Progress

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 Gains Tax Indian Market, Regulation & Taxation ₹ Tax on the profit realised when a capital asset is transferred. Taxable Gain = Sale Consideration - Cost of Acquisition - Cost of Improvement - 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

Capital Market Line Risk & Portfolio Management % The line showing the risk-return combinations available by mixing the risk-free asset with the optimal risky portfolio. Expected Return = Risk-Free Rate + [(Market Return - Risk-Free Rate) / Market Standard Deviation] x Portfolio Standard Deviation

Capital Reduction Corporate Actions, Dividends & Governance ₹ crore A court-approved reduction of a company's share capital, by cancelling shares or returning capital to shareholders. Test: approved by special resolution and confirmed by the National Company Law Tribunal, with creditor objections heard

Capital Work in Progress Financial Statements & Accounting ₹ crore Expenditure on assets still under construction, held on the balance sheet until the asset is ready for use. Test: the asset is not yet ready for its intended use, so no depreciation is charged and costs accumulate on this line

Capitulation Market Psychology & Behavioural Finance qualitative The point in a decline at which remaining holders abandon their positions, typically on heavy volume. Test: a sharp price fall on unusually high volume, accompanied by broad negative sentiment and heavy redemptions

Carry Forward of Losses Indian Market, Regulation & Taxation ₹ The ability to carry an unabsorbed loss into future years to set off against future income of the permitted type. Test: the return is filed by the due date, and the loss is set off in later years only against income of the category the rules permit

Cash and Carry Arbitrage Derivatives, Futures & Options % Buying the underlying in the cash market while selling its futures, locking in the basis as a return. Locked-in Return = (Futures Price - Spot Price - Transaction Costs) / Spot Price, annualised over the days to expiry

Cash and Cash Equivalents Financial Statements & Accounting ₹ crore Cash on hand, bank balances and short-term highly liquid investments readily convertible to a known amount of cash. Test: the instrument matures within three months of acquisition and carries insignificant risk of change in value

Cash Conversion Cycle Fundamental Analysis & Valuation days The number of days between paying for inputs and collecting cash from customers. Cash Conversion Cycle = Inventory Days + Debtor Days - Creditor Days

Cash Flow Statement Financial Statements & Accounting ₹ crore A statement reconciling the change in a company's cash balance over a period, split into operating, investing and financing activities. Change in Cash = Operating Cash Flow + Investing Cash Flow + Financing Cash Flow

Cash Reserve Ratio Economy, Macro & Market Cycles % The proportion of deposits banks must hold as cash with the Reserve Bank, earning no interest. Required Reserves = Net Demand and Time Liabilities x Cash Reserve Ratio

Cash Settlement Derivatives, Futures & Options ₹ Settlement of a derivative by paying the cash difference between the contract price and the final settlement price. Settlement Amount = (Final Settlement Price - Contract Price) x Lot Size, sign adjusted for the position

Terms starting with C