Stock market terms starting with D

Derivative Derivatives, Futures & Options qualitative A contract whose value is determined by the price of another asset, called the underlying. Test: the contract's payoff is defined by reference to the price of a separate asset, rate or index

Descending Triangle Technical Analysis & Chart Patterns qualitative A formation with a flat lower boundary and a falling upper boundary, so the range narrows downward toward a point. Test: two or more lows at approximately the same level, with successively lower highs converging on them

Diluted Earnings per Share Fundamental Analysis & Valuation ₹ Earnings per share recalculated as if every instrument convertible into equity had already been converted. Diluted EPS = Adjusted Profit / (Weighted Average Shares + Shares from Conversion of Dilutive Instruments)

Dilution Fundamental Analysis & Valuation % The reduction in existing shareholders' proportional ownership and per-share claims caused by issuing new shares. New Ownership % = Old Shares Held / (Old Shares Outstanding + New Shares Issued) x 100

Direct Market Access Orders, Execution & Market Structure qualitative An arrangement in which a client's orders reach the exchange through a broker's infrastructure without manual intervention by the broker. Test: orders pass automated risk checks and route to the exchange without a dealer keying them in

Direct Plan Funds, ETFs & Index Investing % A version of a mutual fund scheme bought without a distributor, carrying no commission and therefore a lower expense ratio. Test: the investment is made directly with the fund house or through an execution-only platform, with no distributor commission embedded

Directional Movement Index Indicators & Oscillators ratio (x, times) A pair of lines measuring upward and downward directional movement separately, from which the ADX is derived. +DM = Current High - Previous High when positive and larger than -DM; -DM = Previous Low - Current Low when positive and larger than +DM; each is smoothed and divided by ATR to give +DI and -DI

Dirty Price Bonds & Fixed Income ₹ The total amount a buyer pays for a bond, including accrued interest since the last coupon. Dirty Price = Clean Price + Accrued Interest

Disclosed Quantity Orders, Execution & Market Structure shares The portion of an order's total size that is made visible in the public order book. Test: disclosed quantity is less than total quantity and meets the exchange's minimum disclosure percentage

Discount Bond Bonds & Fixed Income ₹ A bond trading below its face value, because its coupon is lower than the yield the market currently requires. Test: Market Price < Face Value, which implies Yield to Maturity > Coupon Rate

Discounted Cash Flow Fundamental Analysis & Valuation ₹ crore A valuation method that estimates a business's worth as the present value of the cash it is expected to generate. Value = Sum of (Cash Flow in Year t / (1 + Discount Rate) raised to t) + Present Value of Terminal Value

Disinflation Economy, Macro & Market Cycles % A slowing in the rate of inflation, while prices continue to rise. Test: the inflation rate falls between periods while remaining above zero

Disposition Effect Market Psychology & Behavioural Finance qualitative The tendency to sell winning positions too early and hold losing positions too long. Test: the proportion of gains realised exceeds the proportion of losses realised, across a portfolio over time

Divergence Indicators & Oscillators qualitative A condition in which price and an indicator derived from it move in opposite directions. Test: price makes a new extreme while the indicator fails to confirm it with a corresponding new extreme

Diversification Risk & Portfolio Management qualitative Spreading investments across assets whose returns do not move together, so that the portfolio's volatility falls below the average of its parts. Portfolio Variance = Sum over all pairs of (Weight i x Weight j x Covariance of i and j)

Dividend Corporate Actions, Dividends & Governance ₹ A distribution of a company's profits to its shareholders, paid in cash out of distributable reserves. Total Dividend Paid = Dividend per Share x Number of Shares Outstanding

Dividend Discount Model Fundamental Analysis & Valuation ₹ A valuation method that values a share as the present value of all the dividends it is expected to pay. Value = Sum of (Expected Dividend in Year t / (1 + Required Return) raised to t)

Dividend Payout Ratio Corporate Actions, Dividends & Governance % The proportion of a company's earnings distributed to shareholders as dividends. Dividend Payout Ratio = Dividend per Share / Earnings per Share x 100

Dividend per Share Corporate Actions, Dividends & Governance ₹ The total dividend declared for a period divided by the number of shares outstanding. Dividend per Share = Total Dividend Declared / Number of Shares Outstanding

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

Dividend Taxation Indian Market, Regulation & Taxation ₹ The taxation of dividends in the hands of the shareholder at their applicable slab rate, following the 2020 change. Tax on Dividend = Dividend Received x Marginal Slab Rate, with TDS deducted by the company above a threshold

Dividend Trap Corporate Actions, Dividends & Governance qualitative A share whose high dividend yield reflects a falling price and an unsustainable payout rather than attractive income. Test: the yield is elevated because the price fell, and the dividend exceeds free cash flow or is funded by borrowing

Dividend Yield Corporate Actions, Dividends & Governance % The annual dividend per share expressed as a percentage of the share price. Dividend Yield = Annual Dividend per Share / Market Price per Share x 100

Doji Technical Analysis & Chart Patterns qualitative A candlestick whose open and close are at or very near the same price, producing almost no body. Test: absolute value of (Close - Open) is a very small fraction of the period's High minus Low, conventionally under 5%

Terms starting with D