Encompassing everything in a certain class or group; movement in the stock market that affects almost all stocks in the same direction.
Assimilation in finance refers to the absorption of a new issue of stock by the investing public after all shares have been sold by the issue's underwriters.
Centralized securities trading markets where securities are bought and sold in an orderly manner through security brokers. Securities, including equities, bonds, options, closed-end funds, and futures, are traded based on bid and offer prices.
A bear market is a prolonged period during which investment prices fall and widespread pessimism causes the negative sentiment to be self-sustaining. A bear market typically describes a condition where security prices fall 20% or more from recent highs.
A bear market is a financial term used to describe a market where the prices of securities are falling or are expected to fall. This state of the market is often characterized by a decline of at least 20% from recent highs.
A bear raid refers to an illegal attempt by investors to manipulate the price of a stock downward by selling large numbers of shares short. Such practices are prohibited under Securities and Exchange Commission (SEC) rules.
Bellwether is a security or indicator used to predict the direction of a market or sector. Notable examples include IBM in stocks and the 30-year U.S. Treasury Bond in bonds.
A measure of the volatility of a share in relation to the overall market. A share with a high beta coefficient is likely to respond to stock market movements by rising or falling in value by more than the market average.
Popular term for the New York Stock Exchange (NYSE), the largest stock exchange in the world by market capitalization.
A block refers to a large quantity of stock or a large dollar amount of bonds held or traded, typically defined as 10,000 shares or more of stock or $200,000 or more worth of bonds.
Colloquial name for any of the ordinary shares in the most highly regarded companies traded on a stock market. Blue-chip companies have a well-known name, a good growth record, and large assets.
A blue-chip stock represents a national company renowned for its robust profit growth, consistent dividend payments, quality management, and top-tier products and services. The term 'blue-chip' is derived from the color of the most valuable gambling tokens.
India's leading stock exchange, listing over 5000 companies. The main index is the BSE Sensex of 30 representative stocks. Derivatives have been traded since 2000.
A bonus issue is the issuance of additional shares to existing shareholders at no cost, based on the number of shares that a shareholder already owns. It's also known as a scrip issue.
A method of raising capital where a company sells new shares to an underwriter, who then resells them to the market.
A bull market signifies a prolonged rise in the price of stocks, commodities, or bonds. It reflects investor optimism and confidence, often fueled by strong economic indicators and corporate earnings.
In securities trading, a buy order is an instruction to a broker to purchase a specified quantity of a security at the market price or another stipulated price.
The Capital Asset Pricing Model (CAPM) is a cornerstone of modern financial theory, providing a framework used to determine the expected return on an investment for a given level of risk.
Capital gains refer to the profit realized from the sale of assets or investments, which exceeds the purchase price. They can apply to stocks, bonds, real estate, and other types of investments.
The Committee on Uniform Securities Identification Procedures (CUSIP) assigns identifying numbers and codes for all securities. These CUSIP numbers and symbols are used when recording all buy and sell orders.
A covered option is a type of option contract that is backed by the shares underlying the option. It involves the holder of the option also owning the equivalent amount of the underlying shares, reducing the risk compared to naked options.
A rapid and significant decline in stock prices or economic activity, or a catastrophic hardware or software failure in data processing systems.
A comprehensive look at cum dividend, cum rights, and cum warrant stock scenarios, covering the stipulations for buyers to be eligible for declared distributions upon purchasing stock. This article also addresses related terms such as the ex-dividend date.
Cumulative Preferred Stock is a type of preferred stock where omitted dividends must be paid out before any dividends can be paid to common stockholders.
Cyclical stocks are equities that tend to fluctuate significantly with the economic cycle, experiencing high volatility with economic upturns and downturns.
A day order is an order to buy or sell securities that expires unless executed or canceled the day it is placed. All orders are typically day orders unless otherwise specified.
A financial strategy involving the purchase and sale of a position within the same trading day, often employed by traders to capitalize on short-term market movements.
A day trader is an individual who buys and sells financial instruments within the same trading day, with the goal of profiting from short-term price fluctuations.
A dead-cat bounce is a temporary, short-lived recovery in the price of a declining financial asset, typically seen in stock markets following a sharp, severe drop. This term derives from the idea that even a dead cat will bounce if it falls from a significant height.
Defensive securities are stocks and bonds that offer greater stability and relatively safe returns, especially during market downturns.
A dip refers to a slight drop in securities prices after a sustained uptrend. It’s often seen as a buying opportunity for investors.
A key metric used by investors to evaluate the income generated by an investment relative to its share price, providing insights into the return on investment from dividends.
The Dow Jones Industrial Average (DJIA) is the most widely followed benchmark of stock market performance, containing value changes for stocks of 30 large corporations.
Dow Theory is a theory that a major trend in the stock market must be confirmed by similar movements in the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Average (DJTA). According to this theory, a significant trend is not confirmed until both Dow Jones indexes reach new highs or lows; if they do not, the market is likely to fall back to its previous trading range.
A down tick occurs when a security is sold at a price lower than its most recent preceding sale price. This event is also referred to as a 'minus tick.'
A downturn refers to the shift of an economic or stock market cycle from rising to falling, indicating a move from expansion to recession or from a bull market to a bear market.
The Efficient Market Hypothesis (EMH) is a financial theory suggesting that asset prices reflect all available information, making it nearly impossible to consistently achieve higher returns than average market returns.
Electronic trading refers to the process of buying and selling financial instruments, such as stocks and options, through electronic platforms via the Internet. This modern method of trading allows customers to place orders online through brokers, often at lower commission rates compared to traditional or discount brokers.
An emerging market refers to a foreign economy that is developing due to the spread of capitalism and has created its own stock market. These markets are analogous to small growth companies, possessing high potential coupled with high risk.
An equity carve-out is a type of corporate restructuring process that involves a parent company selling a minority share of a subsidiary to the public through an initial public offering (IPO). This allows the parent company to raise capital while maintaining control over the subsidiary.
Exchange-Traded Funds (ETFs) are investment funds that are traded on stock exchanges, much like stocks. They offer a way for investors to buy and sell shares of a diversified portfolio in a single transaction.
A financial market is a marketplace where the trading of financial instruments such as stocks, bonds, commodities, and currencies occurs. These markets facilitate the exchange of capital and credit in the economy.
Understanding fluctuation is crucial within the realms of finance, economics, and business operations. It encapsulates the variability seen in prices, interest rates, and broader economic indicators, often influencing decision-making processes for investors, businesses, and policymakers.
A fractional share represents a unit of stock that is less than one full share. Fractional shares arise from stock dividends, stock splits, or dividend reinvestment plans.
The oldest and largest of eight regional stock exchanges in Germany, accounting for more than 75% of equity trading in Germany. It first recorded trading in 1820 and is now owned by Deutsche Börse. The main market indicator is the Deutsche Aktienindex (DAX index).
A Fully Paid Share is a share on which the full nominal or par value has been paid by the shareholder, including any premium. Such shares denote that the shareholder has no further financial obligation towards the company concerning the initial capital amount.
A Glamor Stock is a type of stock that has a wide public and institutional following, often due to consistently rising sales and earnings over a long period. These stocks tend to outperform market averages during bull markets.
Going long refers to the practice of purchasing a stock, bond, or commodity for investment or speculation purposes. The purchased security is held with the expectation that its value will increase over time, thereby providing profits to the investor.
The process in the securities industry where a private company offers its shares to the public for the first time. This transition involves the shift of company ownership from a few private shareholders to a broader base of public shareholders and brings the company under the regulatory and legal requirements applicable to public companies.
Going short refers to the act of selling a stock or commodity that the seller does not own, typically in anticipation that the price will decline, allowing them to buy it back at a lower price for a profit.
The Greater Fool Theory posits that even if a stock or the entire market is overvalued, investing in such assets can still be justified by the belief that there are always other 'fools' who will pay a higher price.
Gross dividend yield represents the annual dividend income received from a security as a percentage of its current market price before the deduction of any taxes or charges.
A growth fund is a mutual fund that primarily invests in growth stocks with the aim of providing capital appreciation for the fund's shareholders over the long term. These funds tend to be more volatile compared to conservative income or money market funds.
A growth stock is a type of stock that has exhibited faster than average gains in earnings over recent years and is expected to continue showcasing high levels of profit growth. These stocks often come with higher risks but offer potentially greater returns compared to average stocks.
Hammering the market refers to intense selling of stocks by speculators who believe that prices are inflated and the market is about to drop.
In technical analysis of the stock market, 'Head and Shoulders' is a chart pattern that analysts utilize to predict a reversal in the trend of a security's price. Typically, the pattern appears as three peaks: the initial and last peaks are the shoulders, and the highest peak in the middle is the head.
A high flyer refers to a high-priced and highly speculative stock that demonstrates sharp fluctuations in its value over short periods. These stocks are typically associated with unproven high-technology companies and exhibit significant volatility.
Stocks that have hit higher prices in daily trading compared to prices of the past 52-week period. These highs are typically listed in daily newspapers. Technical analysts consider the ratio between new highs and new lows in the stock market to be significant for forecasting stock market trends.
A newly issued stock that is in great public demand, often experiencing significant price increases at its initial public offering (IPO) due to high demand and limited availability of shares. Also known as a hot new issue.
A term used to describe newly issued stock that rises quickly in price, often due to strong interest and demand from investors.
An Initial Public Offering (IPO) is a corporation's first sale of stock to the public. This event marks a pivotal moment for a company, transforming it from a private entity to a publicly traded company.
The process through which a private company offers its shares to the public for the first time, transforming into a publicly traded company.
Inside information refers to corporate affairs that have not been made public yet. This kind of information can significantly affect a company’s stock price.
Insider trading refers to the practice of trading a company's securities by individuals who have access to confidential or non-public information about the company. This practice is illegal under various laws and regulations worldwide.
Insider trading refers to the practice of trading a public company's stocks or other securities based on material, non-public information about the company. This can provide insiders with an unfair advantage and is illegal.
A method of issuing new securities in which a broker or issuing house takes small quantities of a company's shares and issues them to clients at opportune moments. This method is also used by existing public companies that wish to issue additional shares.
Issued and outstanding shares are shares of a corporation that have been authorized in the corporate charter, issued, and are currently held by shareholders. These shares represent the capital invested by the firm's shareholders and owners.
In a financial context, 'killing' refers to a significant reward or huge profit gained from an investment. It can also imply the act of stopping or halting a project or endeavor.
Large-cap stocks, also known as big-cap stocks, are shares of companies with a large market capitalization, typically $5 billion or more.
The last sale refers to the most recent trade in a particular security, and it is not to be confused with the final transaction in a trading session, which is known as the closing sale.
A limit order is an order to buy or sell a security at a specific price or better. The broker will execute the trade only within the price restriction, ensuring that the desired price or a more favorable one is achieved.
The lowest price paid for a security over a specified period, often a year, or since trading in the security began.
A Market Index is a statistical measure that tracks the performance of a group of assets in order to provide a benchmark for the wider market or specific sectors of it.
A market order is an instruction given to a broker to buy or sell a security at the best available price at the moment the order is placed. This is executed immediately under current market conditions.
A Minus Tick, also known as a downtick, is a term used in trading and investing to describe a trade of a security that occurs at a price lower than the previous trade.
The term 'movement' has multiple interpretations in various disciplines including economics, politics, and social sciences. In economics, it generally refers to price changes or fluctuations in a market. However, in a broader context, it can also signify a political action or social campaign aimed at instigating change.
Net Change refers to the difference between the closing price of a stock, bond, commodity, or mutual fund from one trading day to the next. It is a crucial metric for investors to gauge the daily performance of an asset.
A net transaction in the securities market refers to a transaction where the buyer and seller do not incur any fees or commissions. This typically occurs when an investor buys a new issue of stock.
Stock prices that have reached their highest or lowest levels within the past year. This data is often published in newspapers and financial websites to indicate companies experiencing significant price changes.
The New York Stock Exchange (NYSE) is one of the largest and most well-known securities exchanges in the world. Established in 1792, the NYSE is located on Wall Street in New York City and is a symbol of global finance and capital markets.
The premier U.S. stock exchange, established in 1792 and recognized for its significant influence on global financial markets.
The New York Stock Exchange Composite Index is a market-value-weighted price index for all stocks listed on the New York Stock Exchange, reflecting the performance of the equities listed on this iconic exchange.
In the context of the stock market, the term 'Nifty Fifty' refers to 50 stocks that were once highly favored by institutional investors, achieving immense popularity particularly during the bull markets of the 1960s and early 1970s. These stocks were considered premium holdings due to their strong growth potential and favorable market performance.
Shares issued without any payment, typically as a result of a rights issue, often used by companies as a means to raise capital.
Nominal value refers to the face value of a security as stated by the issuer, often used interchangeably with 'par value.' It represents the value printed on the instrument, such as a bond or share certificate.
The New York Stock Exchange (NYSE) is the largest stock exchange in the world by market capitalization. It provides a platform for buying and selling an extensive range of securities, including stocks, bonds, and other financial instruments.
An odd lot in securities trading refers to a block of stocks or bonds that is fewer than 100 shares. This is considered a non-standard trading size and can sometimes incur different types of handling fees or treatment by brokers.
An invitation to the general public to purchase the stock of a company through an intermediary, such as an issuing house or merchant bank. It is one of the most frequently used means of corporate flotation.
The offering price is the price per share at which new or secondary distribution of securities is offered for sale to the public. It is also commonly referred to as the public offering price.
The term 'On Margin' refers to the act of purchasing securities by paying only a fraction of their price and borrowing the rest from a broker or a financial institution. This practice allows investors to buy more securities than they could with their available funds, using leverage to amplify potential gains or losses.
An open order refers to a buy or sell order for securities that has not yet been executed or canceled.
The term 'Or Better (OB)' is an indication on an order ticket for a limit order to buy or sell securities that instructs the broker to execute the order at a price better than the specified limit price if a better price is available.
Outstanding shares represent the total number of a company's shares that are currently held by all its shareholders, including share blocks held by institutional investors and restricted shares owned by the company’s officers and insiders.
Overhang refers to the surplus shares remaining with underwriters when a new issue of shares has not been fully taken up by investors. This situation often results from an under-subscription during a public offering, leaving the underwriters with unsold shares.
A description of a stock or market that has experienced an unexpectedly sharp price decline and is therefore due, according to some proponents of technical analysis, for an imminent price rise.
Panic buying or selling involves a flurry of transactions characterized by high volume. This phenomenon occurs in response to news events that hint at sharply rising or falling prices, often leaving investors with inadequate time to assess the fundamentals of individual stocks or bonds.
Performance stock, also known as growth stock, refers to equity in companies perceived by investors as having potential for significant value appreciation. These stocks usually either pay small dividends or no dividends at all.
A 'Plus Tick' indicates a security transaction executed at a price higher than the preceding transaction. This term is often used in trading and market analysis to denote positive price movements.
Preferred stock is a class of ownership in a corporation that has a higher claim on its assets and earnings than common stock. Preferred shares generally have a dividend that must be paid out before dividends to common shareholders and the shares usually do not carry voting rights.
Information (usually unpublished) about a company that is likely to cause its share prices to move. It is often critical and confidential, impacting investor decisions and market valuation.
