Browse All 840 Stock Market Terms A–Z

Index Funds, ETFs & Index Investing index points A rule-based measure of the value of a defined group of securities, used to represent a market or segment. Index Value = (Current Free-Float Market Capitalisation of Constituents / Base Market Capitalisation) x Base Index Value

Index Fund Funds, ETFs & Index Investing qualitative A mutual fund that seeks to replicate an index's holdings and return rather than to beat it. Test: the fund holds constituents in index proportions and measures itself by tracking difference rather than by outperformance

Index Futures Derivatives, Futures & Options ₹ A futures contract whose underlying is a stock market index rather than a single security. Contract Value = Index Level x Lot Size; settlement is in cash against the final index value

Index of Industrial Production Economy, Macro & Market Cycles index points A monthly index measuring the volume of output in mining, manufacturing and electricity. IIP = weighted average of production indices for mining, manufacturing and electricity, against a base year

Index Rebalancing Funds, ETFs & Index Investing qualitative The periodic revision of an index's constituents and weights according to its published rules. Test: constituents are reviewed on a stated schedule against eligibility criteria, with additions and deletions announced in advance

Index Weighting Funds, ETFs & Index Investing % The rule determining how much of an index each constituent represents. Free-Float Weight = Constituent's Free-Float Market Capitalisation / Sum of All Constituents' Free-Float Market Capitalisations

Indexation Benefit Indian Market, Regulation & Taxation ₹ An adjustment that raises an asset's cost of acquisition for inflation before computing a long-term capital gain. Indexed Cost = Cost of Acquisition x (Cost Inflation Index of the Year of Sale / Cost Inflation Index of the Year of Purchase)

India VIX Indian Market, Regulation & Taxation % An index measuring the volatility the market expects in the Nifty over the next 30 days, derived from Nifty option prices. Computed from the order book of near and next-month Nifty options, expressed as an annualised percentage

Indicator Lag Indicators & Oscillators days The delay between a change in price and the corresponding change in an indicator derived from it. Approximate lag of a simple moving average = (n - 1) / 2 periods, where n is the lookback

Inflation Economy, Macro & Market Cycles % A sustained rise in the general price level, which reduces what each rupee can buy. Inflation Rate = (Current Price Index - Prior Year Price Index) / Prior Year Price Index x 100

Inflation Risk Risk & Portfolio Management % The risk that rising prices erode the purchasing power of an investment's returns. Real Return = (1 + Nominal Return) / (1 + Inflation Rate) - 1

Inflation-Indexed Bond Bonds & Fixed Income ₹ A bond whose principal is adjusted for inflation, so both the coupon and the redemption amount rise with prices. Adjusted Principal = Original Principal x (Current Index Value / Index Value at Issue); Coupon = Adjusted Principal x Real Coupon Rate

Information Ratio Risk & Portfolio Management ratio (x, times) Return above a benchmark per unit of tracking error. Information Ratio = (Portfolio Return - Benchmark Return) / Tracking Error

Initial Margin Derivatives, Futures & Options ₹ The deposit required before a derivative position can be opened, held as collateral against potential losses. Initial Margin = SPAN Margin + Exposure Margin, computed by the clearing corporation for the portfolio

Initial Public Offering Market Basics & Instruments ₹ crore The first sale of a company's shares to the public, after which the shares are listed and traded on a stock exchange. Total IPO size = Fresh Issue Amount + Offer for Sale Amount

Insider Trading Corporate Actions, Dividends & Governance qualitative Trading in a company's securities while in possession of unpublished price-sensitive information about it. Test: the person is an insider, possesses unpublished price-sensitive information, and trades or communicates it without a legitimate purpose

Insolvency and Bankruptcy Code Corporate Actions, Dividends & Governance qualitative India's 2016 law establishing a time-bound process for resolving corporate insolvency or liquidating the company. Test: on admission of a default, a resolution professional takes control and a resolution plan must be approved within the prescribed period or liquidation follows

Intangible Assets Financial Statements & Accounting ₹ crore Identifiable non-physical assets such as software, patents, licences and trademarks that are expected to generate future benefits. Carrying Value = Cost - Accumulated Amortisation - Accumulated Impairment

Interest Coverage Ratio Fundamental Analysis & Valuation ratio (x, times) Operating profit divided by interest expense, measuring how many times over the company's earnings can pay its interest bill. Interest Coverage = Operating Profit (EBIT) / Interest Expense

Interest Expense Financial Statements & Accounting ₹ crore The cost of borrowed money charged to the profit and loss statement for a period. Interest Expense = Average Borrowings x Effective Interest Rate

Interest Rate Cycle Economy, Macro & Market Cycles % The multi-year swing in policy and market interest rates between tightening and easing phases. Test: policy rates move in a sustained direction across several meetings, reversing only after inflation or growth conditions change materially

Interest Rate Risk Risk & Portfolio Management % The risk that changes in interest rates reduce the value of an investment or raise the cost of borrowing. Approximate Price Change = -Modified Duration x Change in Yield

Interim Dividend Corporate Actions, Dividends & Governance ₹ A dividend declared by the board during a financial year, before the annual accounts are finalised. Test: the dividend is declared by the board mid-year and paid before the annual general meeting approves the final accounts

International Fund Funds, ETFs & Index Investing % A fund giving Indian investors exposure to securities listed outside India. Return in Rupees = (1 + Foreign Market Return) x (1 + Currency Change) - 1

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