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840 terms · page 3 of 35
Average Directional Index
Indicators & Oscillators
ratio (x, times)
An indicator measuring the strength of a directional move on a scale of 0 to 100, without indicating its direction.
ADX = smoothed average of |+DI - -DI| / (+DI + -DI) x 100
Average True Range
Indicators & Oscillators
₹
The average of the true range over n periods, measuring how much a security typically moves in a period.
True Range = the greatest of (High - Low), |High - Previous Close| and |Low - Previous Close|; ATR = smoothed average of True Range over n periods
Averaging Down
Risk & Portfolio Management
₹
Buying more of a holding after its price has fallen, reducing the average cost per unit.
New Average Cost = (Original Quantity x Original Price + New Quantity x New Price) / Total Quantity
Backtesting
Indicators & Oscillators
qualitative
Applying a set of trading rules to historical data to see how they would have performed.
Test: rules are fully specified in advance, applied without hindsight, and results are net of realistic transaction costs and slippage
Backwardation
Derivatives, Futures & Options
qualitative
A condition in which futures prices are below the spot price, and later expiries are priced below nearer ones.
Test: Futures Price < Spot Price, with successively distant contracts priced progressively lower
Balance of Payments
Economy, Macro & Market Cycles
₹ crore
A record of all economic transactions between a country's residents and the rest of the world in a period.
Balance of Payments = Current Account + Capital Account + Financial Account + Errors and Omissions = Change in Reserves
Balance Sheet
Financial Statements & Accounting
₹ crore
A statement of what a company owns and owes at a single point in time, with the two sides always equal.
Assets = Liabilities + Shareholders' Equity
Balanced Advantage Fund
Funds, ETFs & Index Investing
%
A hybrid fund that varies its equity allocation dynamically according to a stated model, usually valuation-based.
Test: net equity exposure moves within a wide band according to a disclosed model, with derivatives used to adjust it
Bank Nifty
Indian Market, Regulation & Taxation
index points
The NSE's index of the most liquid large Indian banking stocks, used widely as a derivatives underlying.
Index Value computed from free-float market capitalisation of its banking constituents, weighted and capped per index rules
Bar Chart
Technical Analysis & Chart Patterns
qualitative
A chart showing each period as a vertical line spanning high to low, with left and right ticks marking the open and close.
Test: each period is one vertical line from Low to High, with the open marked left and the close marked right
Base Effect
Economy, Macro & Market Cycles
%
The distortion in a growth rate caused by an unusually high or low value in the comparison period.
Test: the current growth rate is driven substantially by the level of the year-earlier figure rather than by current activity
Base Rate Neglect
Market Psychology & Behavioural Finance
%
Ignoring the underlying frequency of an outcome when assessing a specific case.
Test: a judgement uses case-specific detail while disregarding how often the outcome occurs in the relevant population
Basis
Derivatives, Futures & Options
index points
The difference between a futures price and the spot price of its underlying.
Basis = Futures Price - Spot Price
Basket Order
Orders, Execution & Market Structure
qualitative
A single instruction that submits orders in several securities at once, in preset quantities.
Test: one submission generates multiple child orders across different securities, each executing independently
Bear Market
Economy, Macro & Market Cycles
%
A sustained period of falling prices, conventionally marked by a decline of 20% or more from a high.
Test: the index has fallen 20% or more from its prior peak
Bear Put Spread
Derivatives, Futures & Options
₹
Buying a put at one strike and writing a put at a lower strike with the same expiry, capping both cost and gain.
Net Debit = Higher Strike Premium - Lower Strike Premium; Maximum Gain = (Strike Difference - Net Debit) x Lot Size
Bearish Divergence
Indicators & Oscillators
qualitative
A condition in which price makes a higher high while an oscillator makes a lower high.
Test: current price high > previous price high, while current indicator high < previous indicator high
Bearish Engulfing
Technical Analysis & Chart Patterns
qualitative
A two-candle formation in which a falling candle's body completely covers the preceding rising candle's body.
Test: previous Close > previous Open; current Open >= previous Close and current Close <= previous Open
Behavioural Finance
Market Psychology & Behavioural Finance
qualitative
The study of how psychological factors cause investors and markets to depart from purely rational decision-making.
Test: the observed behaviour departs systematically from what expected-utility maximisation would predict, in a documented and repeatable direction
Benchmark
Risk & Portfolio Management
%
The index or standard against which a portfolio's performance is measured.
Excess Return = Portfolio Return - Benchmark Return over the same period
Beta
Risk & Portfolio Management
ratio (x, times)
A measure of how much an asset's return moves relative to the market's, on average.
Beta = Covariance of Asset and Market Returns / Variance of Market Returns
Bid Price
Orders, Execution & Market Structure
₹
The highest price a buyer in the order book is currently willing to pay for a security.
Best Bid = highest buy limit price resting in the order book
Bid-Ask Spread
Orders, Execution & Market Structure
%
The difference between the best ask and the best bid, representing the immediate cost of a round trip in a security.
Spread % = (Best Ask - Best Bid) / Mid Price x 100, where Mid Price = (Best Ask + Best Bid) / 2
Black Swan
Risk & Portfolio Management
qualitative
An event that is unpredicted, has extreme impact, and is rationalised as predictable only after it occurs.
Test: the event lay outside expectations, carried extreme consequences, and attracted retrospective explanation