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Indicators & Oscillators

Curve Fitting

Tuning a strategy's parameters until it fits historical data closely, producing results that do not repeat on new data.

Test: performance degrades sharply when parameters are perturbed slightly or when the rules are applied to unseen data qualitative Funds, ETFs & Index Investing

Cut-Off Time

The deadline by which an application and its funds must reach a fund house to receive a given day's NAV.

Test: both the application and the cleared funds are received before the stated cut-off for that scheme type qualitative Market Basics & Instruments

Cyclical Stock

A share whose earnings rise and fall with the economic cycle, typically in sectors such as metals, cement, autos and construction.

Test: earnings correlate strongly with GDP growth, commodity prices or credit conditions, with wide peak-to-trough swings qualitative Technical Analysis & Chart Patterns

Dark Cloud Cover

A two-candle formation in which a falling candle opens above the prior rising candle's close and closes below its midpoint.

Test: previous candle rises; current Open > previous High; current Close < midpoint of previous body but above its Open qualitative Market Psychology & Behavioural Finance

Data Mining

Searching data for patterns until something appears significant, without a prior hypothesis.

Expected False Positives = Number of Independent Tests x Significance Level ratio (x, times) Market Basics & Instruments

Day High

The highest price at which a security traded during the current session.

Day High = maximum executed trade price between the session open and the current moment ₹ Market Basics & Instruments

Day Low

The lowest price at which a security traded during the current session.

Day Low = minimum executed trade price between the session open and the current moment ₹ Orders, Execution & Market Structure

Day Order

An order that remains valid only for the current trading session and is cancelled automatically at the close if unfilled.

Test: the order's validity expires at the end of the session in which it was placed qualitative Indicators & Oscillators

Death Cross

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

Test: 50-period Moving Average crosses from above to below the 200-period Moving Average qualitative Bonds & Fixed Income

Debenture

A debt instrument issued by a company, which in India may be secured against assets or unsecured.

Test: the instrument acknowledges a debt of the company and is issued under a debenture trust deed qualitative Funds, ETFs & Index Investing

Debt Fund

A mutual fund investing primarily in bonds, debentures and money-market instruments.

Test: the scheme invests predominantly in fixed-income securities, with returns driven by accrual and by price changes from yield movements qualitative Fundamental Analysis & Valuation

Debt Service Coverage Ratio

Cash available for debt service divided by the total of interest and principal due in the period.

DSCR = Cash Available for Debt Service / (Interest + Principal Repayment Due) ratio (x, times) Fundamental Analysis & Valuation

Debt-to-Equity Ratio

Total borrowings divided by shareholders' equity, measuring how much of the business is funded by lenders relative to owners.

Debt-to-Equity = Total Debt / Shareholders' Equity ratio (x, times) Fundamental Analysis & Valuation

Debtor Turnover Ratio

Revenue divided by average trade receivables, showing how many times a year credit sales are collected.

Debtor Turnover = Revenue / Average Trade Receivables; Debtor Days = 365 / Debtor Turnover ratio (x, times) Bonds & Fixed Income

Default

A failure by a borrower to pay interest or principal when due, or a breach of another obligation under the debt agreement.

Test: a scheduled payment is missed beyond any grace period, or a covenant breach triggers an event of default qualitative Market Basics & Instruments

Defensive Stock

A share whose earnings hold up through downturns because demand for its products barely changes with the economy.

Test: earnings show low correlation with GDP growth, typically in consumer staples, pharmaceuticals or utilities qualitative Financial Statements & Accounting

Deferred Tax

The tax effect of timing differences between how items are treated in the accounts and how they are treated for tax purposes.

Deferred Tax = Temporary Difference x Applicable Tax Rate ₹ crore Economy, Macro & Market Cycles

Deflation

A sustained fall in the general price level, the opposite of inflation.

Test: the price index declines from one period to the corresponding earlier one, giving a negative inflation rate % Corporate Actions, Dividends & Governance

Delisting

The removal of a company's shares from trading on a stock exchange.

Test: the security is no longer admitted to dealings on the exchange, whether at the company's initiative or the exchange's qualitative Market Basics & Instruments

Delivery-Based Trading

Buying shares with the intention of taking them into a demat account, rather than squaring off within the session.

Test: the position survives the session close and settles into the buyer's demat account on T+1 qualitative Derivatives, Futures & Options

Delta

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

Delta = Change in Option Price / Change in Underlying Price; ranges 0 to 1 for calls and 0 to -1 for puts ratio (x, times) Indian Market, Regulation & Taxation

Demat Account

An account with a depository in which securities are held in electronic form in the investor's name.

Test: the account is opened with a depository participant and holds securities as a beneficial owner record at NSDL or CDSL qualitative Indian Market, Regulation & Taxation

Dematerialisation

The conversion of physical share certificates into electronic holdings in a demat account.

Test: the physical certificate is surrendered to the depository participant and an equivalent electronic credit is made to the demat account qualitative Corporate Actions, Dividends & Governance

Demerger

The separation of a business division into an independent company, with shares issued to the existing shareholders.

Test: an undertaking transfers to a resulting company, whose shares are issued to the demerged company's shareholders in proportion to their holdings qualitative