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Market Basics & Instruments

Value Stock

A share trading at a low price relative to accounting measures such as earnings, book value or cash flow.

Test: low P/E, low P/B or high earnings yield relative to the market and to the company's own history qualitative
Fundamental Analysis & Valuation

Value Trap

A share that looks cheap on backward-looking multiples but is cheap because its business is deteriorating.

Test: the low multiple is explained by declining earnings power rather than by temporary pessimism, so the multiple stays low as earnings fall qualitative
Risk & Portfolio Management

Variance

The average of the squared deviations of returns from their mean.

Variance = Sum of (Return - Mean Return) squared / Number of Observations %
Derivatives, Futures & Options

Vega

The change in an option's price for a one-percentage-point change in implied volatility.

Vega = Change in Option Price / Change in Implied Volatility (per 1 percentage point)
Risk & Portfolio Management

Volatility

The degree to which an asset's returns vary around their average, usually measured as annualised standard deviation.

Annualised Volatility = Standard Deviation of Daily Returns x square root of 252 %
Market Basics & Instruments

Volume

The number of shares traded in a security over a stated period, counting each trade once.

Volume = total number of shares changing hands in the period shares
Indicators & Oscillators

Volume Oscillator

The percentage difference between a short and a long moving average of volume.

Volume Oscillator = (Short-Period Volume MA - Long-Period Volume MA) / Long-Period Volume MA x 100 %
Indicators & Oscillators

Volume Profile

A histogram showing how much volume traded at each price level over a chosen period, plotted horizontally.

For each price level, sum the volume of all trades executed at that level over the period examined shares
Orders, Execution & Market Structure

Volume-Weighted Average Price

The average traded price over a period, weighted by the volume executed at each price.

VWAP = Sum of (Price x Volume) / Sum of Volume
Corporate Actions, Dividends & Governance

Voluntary Delisting

A company's own decision to remove its shares from the exchange, requiring a public shareholder exit offer.

Test: the acquirer reaches the threshold shareholding through a reverse book-building or fixed-price exit offer approved by public shareholders qualitative
Corporate Actions, Dividends & Governance

Voting Rights

The entitlement of an equity shareholder to vote on resolutions, normally one vote per share held.

Votes Held = Number of Equity Shares Held, unless the class carries differential rights shares
Indicators & Oscillators

Walk-Forward Analysis

A testing method that optimises parameters on one segment of history and evaluates them on the immediately following unseen segment…

Test: for each window, optimise on the in-sample period and record results only from the subsequent out-of-sample period qualitative
Derivatives, Futures & Options

Weekly Expiry

A derivative contract that expires each week rather than monthly, concentrating an option's whole life into a few days.

Test: the contract's expiry falls on a designated weekday of the current week rather than at month end qualitative
Fundamental Analysis & Valuation

Weighted Average Cost of Capital

The blended after-tax cost of a company's debt and equity funding, weighted by their market values.

WACC = (E/V) x Cost of Equity + (D/V) x Cost of Debt x (1 - Tax Rate), where V = E + D %
Indicators & Oscillators

Weighted Moving Average

A moving average in which weights decline linearly from the most recent period to the oldest in the window.

WMA = (P1 x n + P2 x (n-1) + ... + Pn x 1) / (n + (n-1) + ... + 1)
Indicators & Oscillators

Whipsaw

A rapid reversal that triggers an entry or exit signal and then immediately reverses again, producing a loss.

Test: a signal is generated and the opposite signal follows within a short interval, before the first position has moved favourably qualitative
Corporate Actions, Dividends & Governance

Whistle-Blower Policy

A mandated mechanism allowing employees and directors to report unethical behaviour or fraud without fear of retaliation.

Test: the policy provides a reporting channel, direct access to the audit committee chair, and protection against victimisation qualitative
Economy, Macro & Market Cycles

Wholesale Price Index

An index tracking prices of goods traded in bulk between businesses, before they reach the retail stage.

WPI = (Cost of the Wholesale Basket Now / Cost in the Base Period) x 100 index points
Indicators & Oscillators

Williams %R

An oscillator ranging from 0 to -100 that measures the close relative to the high of the last n periods.

%R = (Highest High over n - Close) / (Highest High over n - Lowest Low over n) x -100 %
Financial Statements & Accounting

Working Capital

The capital tied up in day-to-day operations, measured as current assets less current liabilities.

Working Capital = Current Assets - Current Liabilities ₹ crore
Bonds & Fixed Income

Yield Curve

A plot of yields on bonds of the same credit quality across different maturities.

Test: yields on identical-credit instruments are plotted against their residual maturities at a single point in time %
Bonds & Fixed Income

Yield to Call

The return on a bond assuming the issuer redeems it at the earliest call date rather than at maturity.

Same calculation as yield to maturity, using the call date and call price in place of the maturity date and face value %
Bonds & Fixed Income

Yield to Maturity

The total annualised return from holding a bond to maturity, accounting for coupons, the purchase price and the redemption amount.

Approximate YTM = [Annual Coupon + (Face Value - Price) / Years to Maturity] / [(Face Value + Price) / 2] %
Bonds & Fixed Income

Zero-Coupon Bond

A bond paying no periodic interest, issued at a discount and redeemed at face value.

Price = Face Value / (1 + Yield) raised to the number of years to maturity