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840 terms · page 29 of 35

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Orders, Execution & Market Structure

Rolling Settlement

A system in which every trading day is a separate settlement cycle, so trades settle a fixed number of days after execution.

Test: each trade date has its own settlement date; there is no fixed weekly or fortnightly settlement day qualitative Derivatives, Futures & Options

Rollover

Closing a derivative position in the expiring contract and opening the equivalent position in the next expiry.

Rollover Cost = Price of the Far Contract - Price of the Near Contract, per unit index points Technical Analysis & Chart Patterns

Rounding Bottom

A gradual, curved transition from decline to advance over an extended period, with no sharp low.

Test: successive lows form a shallow concave curve over many periods, with volume typically contracting into the base and expanding on the advance qualitative Funds, ETFs & Index Investing

Rupee Cost Averaging

The effect by which investing a fixed amount regularly buys more units when prices are low and fewer when they are high.

Average Cost per Unit = Total Amount Invested / Total Units Purchased ₹ Economy, Macro & Market Cycles

Rupee Depreciation

A fall in the rupee's value against another currency, so more rupees are needed to buy the same foreign amount.

Depreciation % = (New Rate - Old Rate) / Old Rate x 100, quoted as rupees per unit of foreign currency % Market Basics & Instruments

Scalping

Trading for very small price increments many times a day, holding each position for seconds to minutes.

Net Profit per Trade = Gross Price Movement Captured - Round-Trip Transaction Costs ₹ Funds, ETFs & Index Investing

Scheme Categorisation

SEBI's framework defining standard mutual fund categories with mandated investment characteristics.

Test: the scheme's holdings satisfy the allocation and eligibility rules prescribed for its declared category qualitative Corporate Actions, Dividends & Governance

Scheme of Arrangement

A court-supervised process under company law for restructuring a company's capital, mergers, demergers or compromises with creditors.

Test: the scheme is approved by the required majorities of shareholders and creditors and sanctioned by the National Company Law Tribunal qualitative Indian Market, Regulation & Taxation

SCORES

SEBI's online complaint redress system, through which investors lodge and track grievances against market intermediaries.

Test: the complaint concerns a SEBI-registered intermediary or listed company and is filed on the SCORES platform after approaching the entity directly qualitative Indian Market, Regulation & Taxation

SEBI

The Securities and Exchange Board of India, the statutory regulator of India's securities markets.

Test: the entity or activity falls within the securities market, bringing it under SEBI's registration, disclosure and enforcement powers qualitative Indian Market, Regulation & Taxation

SEBI Act

The 1992 statute that established SEBI as a statutory body and set out its powers over the securities market.

Test: the matter falls within the Act's scope, giving SEBI powers of registration, inspection, investigation, penalty and adjudication qualitative Market Basics & Instruments

Secondary Market

The market in which already-issued securities are traded between investors, with no money flowing to the issuer.

Test: both counterparties are investors and the issuer is not a party to the trade qualitative Indian Market, Regulation & Taxation

Section 80C

The Income Tax Act provision allowing a deduction for specified investments and payments, capped at ₹1.5 lakh a year.

Tax Saved = Amount Invested (up to ₹1.5 lakh) x Applicable Marginal Tax Rate ₹ Economy, Macro & Market Cycles

Sector Rotation

The tendency for different sectors to lead at different points in the economic cycle, and strategies that attempt to follow it.

Test: relative performance shifts systematically between cyclical, defensive and rate-sensitive sectors as conditions change qualitative Funds, ETFs & Index Investing

Sectoral Fund

An equity fund that invests at least 80% of its assets in companies from a single sector.

Test: minimum 80% allocation to one defined sector, such as banking, pharmaceuticals or technology qualitative Indian Market, Regulation & Taxation

Securities Appellate Tribunal

The statutory tribunal that hears appeals against orders of SEBI and certain other financial regulators.

Test: an appeal is filed against an order of SEBI, an exchange, a depository, the pension regulator or the insurance regulator, within the prescribed period qualitative Indian Market, Regulation & Taxation

Securities Lending and Borrowing

An exchange-regulated mechanism through which securities are lent for a fee and returned on a set date.

Lending Fee = Lending Rate x Value of Securities Lent x (Days Lent / 365) % Financial Statements & Accounting

Securities Premium

The reserve holding the amount received on share issues in excess of face value.

Securities Premium = (Issue Price - Face Value) x Number of Shares Issued ₹ crore Indian Market, Regulation & Taxation

Securities Transaction Tax

A tax levied on the value of transactions in securities on Indian exchanges.

STT = Transaction Value x Applicable Rate, which differs by segment and by whether the leg is a buy or a sell % Market Basics & Instruments

Security

A tradable financial instrument representing ownership, a creditor relationship, or a right relating to either.

Test: the instrument is transferable, is issued in standardised units, and represents ownership, debt, or a right over one of these qualitative Financial Statements & Accounting

Segment Reporting

Disclosure of revenue, results and assets broken down by the business or geographic segments management uses to run the company.

Test: segments are reported on the basis used internally by the chief operating decision maker, above prescribed size thresholds qualitative Market Psychology & Behavioural Finance

Self-Attribution Bias

The tendency to credit successes to one's own skill and failures to external circumstances.

Test: favourable outcomes are attributed internally and unfavourable ones externally, regardless of the actual process quality qualitative Indian Market, Regulation & Taxation

Sensex

The BSE's benchmark index of 30 large Indian companies, weighted by free-float market capitalisation.

Index Value = (Current Free-Float Market Capitalisation of Constituents / Base Market Capitalisation) x Base Value index points Orders, Execution & Market Structure

Settlement Cycle

The number of trading days between a trade's execution and the actual exchange of securities and money.

Settlement Date = Trade Date + N trading days, where N is 1 for the Indian T+1 equity cycle days