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Terms starting with G

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Market Psychology & Behavioural Finance

Gambler's Fallacy

The belief that an independent random outcome is due to reverse after a run in one direction.

Test: the predicted probability of the next outcome changes on the basis of prior independent outcomes qualitative
Derivatives, Futures & Options

Gamma

The rate at which an option's delta changes for a one-unit change in the underlying.

Gamma = Change in Delta / Change in Underlying Price ratio (x, times)
Technical Analysis & Chart Patterns

Gap

A discontinuity on a chart where a period's entire range lies away from the previous period's range, with no trading in between.

Gap % = (Current Open - Previous Close) / Previous Close x 100 %
Technical Analysis & Chart Patterns

Gap Down

An opening price below the previous period's low, leaving an unfilled space on the chart.

Test: Current Open < Previous Low %
Technical Analysis & Chart Patterns

Gap Up

An opening price above the previous period's high, leaving an unfilled space on the chart.

Test: Current Open > Previous High %
Economy, Macro & Market Cycles

GDP Growth Rate

The percentage change in real gross domestic product from one period to the corresponding earlier one.

GDP Growth = (Current Period Real GDP - Prior Period Real GDP) / Prior Period Real GDP x 100 %
Indian Market, Regulation & Taxation

GIFT City

India's international financial services centre in Gujarat, where transactions occur in foreign currency under a separate regulator.

Test: the entity or transaction is located in the International Financial Services Centre and regulated by the IFSC Authority qualitative
Funds, ETFs & Index Investing

Gold ETF

An exchange-traded fund holding physical gold, whose units track the domestic price of the metal.

Test: the fund holds physical gold of standard purity, and each unit represents a stated weight of it qualitative
Indicators & Oscillators

Golden Cross

The crossing of a shorter moving average above a longer one, conventionally the 50-day above the 200-day.

Test: 50-period Moving Average crosses from below to above the 200-period Moving Average qualitative
Orders, Execution & Market Structure

Good-Till-Triggered Order

A standing instruction held at the broker for up to a year, submitted to the exchange only when its trigger price is reached.

Test: the instruction rests with the broker, not in the exchange order book, until the trigger condition is met qualitative
Financial Statements & Accounting

Goodwill

The excess of the price paid for a business over the fair value of its identifiable net assets, recorded as an asset on acquisition.

Goodwill = Purchase Consideration - Fair Value of Identifiable Net Assets Acquired ₹ crore
Fundamental Analysis & Valuation

Gordon Growth Model

A single-stage dividend discount model that values a share assuming dividends grow at a constant rate forever.

Value = Next Year's Dividend / (Required Return - Constant Growth Rate)
Bonds & Fixed Income

Government Security

A debt instrument issued by the central government, carrying sovereign credit and used as the benchmark for all other rates.

Test: the issuer is the Government of India and the obligation is in rupees qualitative
Indian Market, Regulation & Taxation

Graded Surveillance Measure

An exchange framework applying escalating restrictions to securities with weak fundamentals or unusual price behaviour.

Test: the security meets criteria on net worth, net income, price-to-earnings, market capitalisation or price movement, placing it in one of six stages qualitative
Indian Market, Regulation & Taxation

Grandfathering

The rule protecting gains accrued before long-term capital gains tax on listed equity was reintroduced in 2018.

Deemed Cost = Higher of (Actual Cost) and (Lower of Fair Market Value on 31 January 2018 and Sale Consideration)
Market Psychology & Behavioural Finance

Greater Fool Theory

The idea that an overpriced asset can still be bought profitably if someone else will pay more for it.

Test: the purchase is justified by an expected resale price rather than by the asset's own cash flows or utility qualitative
Market Psychology & Behavioural Finance

Greed

The desire for larger gains that leads investors to take risks they would otherwise decline.

Test: position size, leverage or concentration rises without any change in the analysis that justified the original exposure qualitative
Market Basics & Instruments

Grey Market Premium

The unofficial price above an IPO's issue price at which its shares are quoted in an informal, unregulated market before listing.

Grey Market Premium = Unofficial Quoted Price - IPO Issue Price
Economy, Macro & Market Cycles

Gross Domestic Product

The total market value of all final goods and services produced within a country in a given period.

GDP = Private Consumption + Investment + Government Spending + (Exports - Imports) ₹ crore
Fundamental Analysis & Valuation

Gross Margin

Gross profit as a percentage of revenue, showing what proportion of each sale survives the direct cost of producing it.

Gross Margin = (Revenue - Cost of Goods Sold) / Revenue x 100 %
Financial Statements & Accounting

Gross Profit

Revenue less the direct cost of the goods or services sold, before operating, financing and tax costs.

Gross Profit = Revenue - Cost of Goods Sold ₹ crore
Economy, Macro & Market Cycles

Gross Value Added

The value of output less the value of intermediate inputs, measured before product taxes and subsidies.

GDP = Gross Value Added + Product Taxes - Product Subsidies ₹ crore
Fundamental Analysis & Valuation

Growth at a Reasonable Price

An approach that seeks companies growing above average while refusing to pay a multiple that assumes the growth continues indefinitely.

Test: above-market earnings growth with a PEG near or below 1 and a defensible reason for the growth to persist qualitative
Funds, ETFs & Index Investing

Growth Option

The plan option in which a fund retains all gains, so returns show up as a rising NAV rather than as payouts.

Test: no distributions are made; the entire return is reflected in the NAV qualitative