Table of Contents
Are you among those investors who are very keen to learn about every stock market glossary?
Well, it’s not a bad idea for beginners who have just dived into the world of the stock market. And to begin with any investment plan these beginners need to understand the basics.
But, wait a second!
As a beginner you must start with understanding;
What is the Stock Market?
The stock market isn’t a place where one can visit however, it’s a place where the shares of publicly listed companies are traded (some physical, mostly online). The main market is where companies reveal shares to the common public in an Initial Public Offering (IPO) to maximize capital.
The price of stocks changes by the supply and demand, the company’s economic conditions, performance, and various other aspects that include investor “sentiment” – but all of these should be kept in mind while buying & selling the shares.
Stock Market Glossary
From the manifold stock market glossary, we’ve penned down a few of them to ease every investor and beginner. Let’s highlight them:
Stock Market Glossary for A
Asset
An asset is your belongings that have some monetary or economic value. Some common types of assets are property, interest-bearing instruments, and stocks.
Agent
An agent is an individual who can make investment decisions on behalf of someone else. Stock brokers are known as agents in financial markets, and own the legal authority to sell and buy the shares on anyone’s behalf.
Annual Return
Annual return is an annually generated ROI. Moreover, it is calculated as the percentage of the starting amount of investment.
Average P/E Ratio
The average price to earning (P/E) ratio refers to a ratio of a company’s share price to its earnings per share (EPS).
Accrued Expenses
An accrued expense refers to an expense that you’ve incurred but you don’t have any invoice, receipt, or related document for it. These are usually your current liabilities that you should pay within 12 months.
Asset Classes
An asset class is where a grouping of various investments with a few identical characteristics takes place and shows the same return patterns in the market.
Asset-Backed Securities
It is a designated group of major assets that includes loans, credit cards, leases, royalties, guaranteeing or assuring its income value and payments or back asset-based security (ABS).
Active Trading
Active trading is to buy and sell securities and stocks at a short-term price to earn a huge and quick profit.
Alpha
Alpha refers to the total return from your investment that you expect from its base price.
Asset Allocation
Asset allocation is to divide the investments among numerous assets, like stocks, bonds, and cash.
Annual Report
It is a yearly report of the company in which they keep track of all the finances and activities of shareholders in the financial year.
Average Maturity
Average maturity is defined as the average calculation or weighted average of all the listed or current maturities of the securities in your portfolio.
Annualized
The process of annually changing figures within a short-term duration into a 12-month equivalent.
Appreciation
The increase in the value of any financial asset is known as appreciation.
Annuity
Annuity is a financial tool to ease investors in providing quick payments for a certain time.
After-hours Trading
It is the trade in the share market that you conduct after the closing of the market.
Asset Management Company (AMC)
An AMC is an entity that takes or asks various investors to invest their money in multiple assets.
Arbitrage
Arbitrage refers to the buying and selling of an asset in distinct markets to earn profit from the price difference.
Aggressive Funds
These are the sub-categories of a hybrid fund, which invests in both debt and equity but more from the latter.
Asset Allocation Funds
A mutual fund that invests in multiple asset classes like debts, commodities, cash equities, bonds, etc.
Asset Under Management (AUM)
An AUM is the overall market value of assets initiated by a mutual fund. These assets are usually managed by the fund managers who are free to take all the investment-related decisions on behalf of the investors.
Average Daily Trading Volume (ADTV)
The ADTV depicts the average number of shares traded on a session of an exchange per trading.
Stock Market Glossary for B
Bond Fund
It is also popular as a debt fund that invests in bonds or other securities.
Balanced Fund
Balanced fund is a categorisation of mutual funds which consists of debt (bond) and equity (stock) components in a particular ratio within a portfolio.
Block Trade
A block trade imposes an exchange of a fixed amount of securities between two entities at predetermined costs.
Balance Sheet
The balance sheet is a financial statement that reports a firm’s liabilities, assets, and stakeholder equity at particular points in time.
Bull Market
A Bullish or bull market is a trend that is characterized by increasing stock prices of several market securities, usually equity instruments.
Bonds
Bonds are fixed-income instruments that represent loans made by investors to borrowers (usually corporate or government entities.)
Blue Chip Stocks
These stocks belong to giant, well-recognised companies which yells a long history of sound and balanced financial performance. These types of stocks are capable enough of fixing difficult market conditions and producing higher returns when the market is in good condition.
Breakpoint
A breakpoint refers to the dollar investment in the context of a mutual fund when an investor qualifies for a minimized sales fee.
Board of Trustees
A governing board elected or appointed to manage or maintain the policies of an institution is known as the board of trustees.
Beta
Beta is a systematic portfolio risk or volatility measurement. It calculates the return volatility connected to a holistic market, where more than 1 is volatile, less than 1 is less volatile, and 1 is neutral.
Benchmark
It is a standard, which is an uncontrolled index, commonly leveraged for comparison purposes in evaluating portfolio performance or mutual funds.
Best-in-Class
It means picking companies that get control over a certain ranking hurdle and set up with the help of ESG criteria within each sector or group.
Stock Market Glossary for C
Common Stock
Common stock means a security that shows your ownership in a corporation plus the stock type in which most people invest.
Capital
Capital is the liquid assets or cash that are required to start any business or to bear the company’s expenses.
Capitalization
Market capitalisation is measured by multiplying the number of O/S shares by the price per share.
Convertible Securities
Convertible securities are bonds, stocks, or other market instruments that you can change into another form.
Capital Gain or Loss
Capital gain is the profit earned on selling assets like real estate, bonds, shares, etc. If the assets’ selling price exceeds your purchase price, that profit is termed as capital gains. If the selling price is less than the purchase price, that loss is termed a capital loss.
Cash Market
A cash market is a place where commodities or securities purchased are paid in cash and received by buyers at the selling point.
Contract Note
A contract note is a record or document of any trades undertaken by brokerage houses on the exchange of stock.
Children’s Funds
Children’s funds are open-ended mutual fund schemes that particularly feature child investment goals and terms.
Commodity Funds
Commodity funds are the funds invested in commodity trading. They mainly invest in specialized commodities and let investors earn returns on how certain commodities perform in the market.
Corporate Bond Funds
Corporate bond funds are mutual funds that invest over 80 per cent of assets in a company’s corporate bonds.
Conservative Funds
Conservative funds refer to an investment that doesn’t expose investors to high risks and focuses on accruing constant returns. These funds don’t provide huge returns, but they secure the capital amount by reducing financial losses.
Closed-Ended Funds
A close-ended fund is a mutual fund where a fund house only issues a fixed number of fund units at its launch.
Credit Risk Funds
Schemes of debt mutual funds that invest a minimum of 65 per cent of their assets in AA-ranked corporate debt securities are called credit risk funds.
Commissions
Commission refers to the fee payment to your investment dealer or financial advisor that looks after the buying and selling of stocks.
Certificate of Deposit (CD)
A CD refers to a savings account provided by banks and credit unions. Generally, you agree to keep your money in a CD for a particular time like six months, one year, or even 5 years.
Consumer Price Index (CPI)
A CPI is an index that calculates the cost change that consumers are required to pay for various services and products.
Cash Equivalent
Cash equivalent is defined as an investment that can be easily convertible into cash with low risk, such as a treasury bill.
Cost Inflation Index
A tool that is used to calculate a probable annual rise in the assets’ price owing to inflation.
Stock Market Glossary for D
DEMAT
DEMAT is dematerialised, which depicts the move from physical share certificates to the book-keeping’s electronic mode.
DEMAT Account
A DEMAT Account stores all the investment market securities electronically or digitally.
Debentures
Debentures refer to the type of bonds or debt instruments, which are not secured by collateral. If you choose to invest in these non-collateral-backed instruments, you should be dependent on the issuers’ creditworthiness and their reputation before investing.
Debt Fund(s)
Debt funds are mutual funds that invest in fixed-income securities like treasury bills, bonds, commercial paper etc.
Derivatives
Financial contracts between two or more parties or entities are known as derivatives. These financial contracts extract value from an underlying security, index, or asset.
Derivatives Trading
Derivatives trading is the trading that occurs when traders estimate future price actions of underlying assets through derivatives contracts.
Derivatives Market
A derivative market is a place where all the financial instruments such as options contracts and futures are traded.
Defensive Stock
Defensive stocks are the stocks that consistently offer slow dividends plus fixed earnings, irrespective of stock market conditions (that includes the conditions during bull markets).
Defensive Assets
Defensive asset refers to an asset (cash-based in investment, gifts, bonds) bought to escalate income and value over time and provide steady returns for the long term with less volatility.
Dollar Cost Averaging
Investing the same amount of money at regular intervals over time, irrespective of the purchasing price.
Deferred Sales Charge
A back-end load charge that investors should pay while selling out shares of mutual funds within a defined time is termed a deferred sales charge.
Dividend Yield Funds
Dividend yield funds are mutual funds that primarily invest in companies that are capable of offering regular dividend payouts.
Dynamic Asset Allocation
Dynamic Asset Allocation refers to the type of portfolio management. A fund manager regularly updates or adjusts the combination of asset classes so that your portfolio adapts to the various market conditions.
Dynamic Bond Funds
Dynamic bond funds can be defined as debt mutual funds that invest in money market instruments and debt like corporate and government securities and bonds of multiple durations.
Draft Offer Document
It is an initial version of the offer document for an IPO, the first offer document company that intends for the public to submit to the SEBI to get approved.
Delta
Delta refers to the financial ratio that compares the price change of an underlying asset, usually marketable securities, with the price change of a derivative or an option.
Stock Market Glossary for E
Equity
Equity is the share of a company issued by them that caters ownership in it.
Equity Trading
Equity trading means the buying or selling process of the specific company’s equity in the hope of earning profit from a movement in its price.
Equity Share Capital
Equity share capital is the money increased by a company by selling equity (which can be sold either in the private market or in the public market.)
Emerging Market Funds
An ETF is a fund that mainly invests in the securities market of countries that are yet to be developed. These funds usually invest in the bond and equity markets of developing countries.
Equilibrium Price
An equilibrium price is a price at which assets supply is equivalent to its market demand.
Equity Fund
A mutual fund where money is invested in the fund with the help of SIP or in preferred or common stock is known as an equity fund.
Earnings Per Share (EPS)
Earnings per share is the net income of a company dividend by the number of outstanding stock shares.
Exchange Privilege
Exchange privilege refers to the potential to transfer money from one mutual fund to another within the same fund’s family.
Exchange-traded fund (ETF)
An investment fund that comprises assets, including shares, commodities, derivatives, currency, or bonds. An ETF is traded in the form of stocks.
Exchange Rate
The rate at which one currency is swapped for another is known as the exchange rate.
Ex-Dividend
Ex-dividend is the interval between the next dividend payment and the stock announcement.
Ex-Dividend Date
The ex-dividend date is the time when the stock starts trading without any succeeding dividend value. Generally, the dividend is paid three weeks before the date to shareholders on which the stocks turn ex-dividend.
Earnest Money
It is the deposit money offered to sellers by buyers or deposit made by buyers on a house they want to buy to show the good faith of buyers is referred to as earnest money.
Expense Ratio
An annual maintenance charge assessed by MFs to pay for its expenditures is known as the expense ratio.
Stock Market Glossary for F
Fund
The fund can be defined as a pool of money that permits a fund manager to make investment or financial decisions like buying securities.
Fixed Income Securities
Debt instruments that pay a fixed amount of dividend income or interest, include preferred shares, debentures, and corporate bonds, which serve as coupon payments to investors.
Fixed Income Investments
Fixed-income investments include debentures, government bonds, and corporate bonds that benefit you in paying preset interest or dividend income.
Fixed Income Security
A security that is responsible for paying a regular fixed interest rate is called fixed income security.
Fixed Income Fund
A fund or portfolio in which you purchase a bond as a part of investment. There is no surety of fixed maturity or repayment known as the fixed income fund.
Fair Market Value (FMV)
FMV is the price set by an open market that could be used for selling the asset.
Face Value
Face value can be defined as the assets’ nominal value. It is the amount that a lender will receive after repaying the bond or debenture, that excludes interest.
Financial Materiality
An information or event that affects a company’s financial condition or operating performance and can be assessed in decision-making investment is referred to as financial materiality.
First Home Savings Account (FHSA)
The First Home Savings Account is a registered plan or account that benefits by offering tax-free savings for the purchase of your first home.
Front-End Load
A front-end load is a sales or commission charge that an investor should pay upfront during the purchase of an asset. In addition, it is a fee that investors pay when a mutual fund is first bought.
Focused Fund
A type of MF that doesn’t maintain a huge diversified portfolio of investment is called a focused fund.
Forward Price
It is a predetermined price at which a forward future contract will be settled.
Fund of Funds (FOF)
The FOF refers to an investment cycle that needs capital from several investors and invests them in other funds, like MF and hedge funds.
Stock Market Glossary for G
Global Funds
A global fund is a fund that maintains an investment portfolio that doesn’t have boundaries of geographical constraints.
Guaranteed Investment Certificate (GIC)
The investments sold by financial institutions that pay a constant rate of interest for a specific time (usually 1-5 years).
Gold Funds
Gold funds are a type of Fund of Funds (FOF). They invest the amount in funds that invest directly in gold & gold-related securities like gold ETFs.
Gold ETF
An investment based on commodity funds that only keep an eye on the gold market is known as the gold ETF.
Growth Stocks
Company stocks that perform or are expected to perform better in comparison to other companies from the same sector are referred to as growth stocks.
Go Public
Good public means when a company is going to launch its IPO and is responsible for selling the shares in the public market.
Stock Market Glossary for H
Holdings
For a retail advisor holdings are the assets that build up your investment portfolio, these can either be MF units, cryptocurrencies, real estate, stocks, etc.
Holding Period
The holding period is the time between the buying and selling of an asset.
Hybrid Funds
Funds that invest in more than one asset class are called hybrid funds. These funds usually invest in the debt and equity market.
Hedge Fund
It is an investment fund that makes use of difficult trading strategies and invests in a huge variety of asset classes.
Stock Market Glossary for I
Index
An index is a group of securities, a bucket of derivatives, or any other financial instrument that shows and calculates investment strategy, asset class performance, market sector, or particular market.
Interest Rate
When money issuers agree to pay a fixed amount to the shareholders that is termed an interest rate. It is the face value percentage of a bond.
Interest-Rate Risk
Interest-rate risk refers to the possibility of a reduction in the value of securities or assets, including bonds, resulting from an escalation in interest rates.
Impact Investing
Impact investing is a sustainable investment strategy (healthcare, housing, cost-effective education) that looks to generate measurable returns while creating a good social or environmental impact.
Investment Company
An investment company refers to a trust or corporation partnership that invests complete shareholders’ dollars in securities that suit the company’s goals.
Investment Objective
The four common strategies encompass – growth, income, trading or income tax-free income, growth and income, and the aim of investment makes easy financial investment ideas that benefit in achieving the financial goals of an individual.
Investment Advisor
An Investment advisor refers to an individual or a firm that specializes in providing financial advice to clients regarding buying and selling securities in exchange for a fee.
Investment Grade Bond
A bond that is perfect for wise investors to make the purchase is known as an investment-grade bond.
Inflation Rate
A sudden rise in products’ and services’ prices is called inflation, which shows how quickly the prices are increasing over time and how rapidly investments are losing their value.
Individual Retirement Account (IRA)
An IRA is a tax-deferred account, providing you the freedom to save money in a tax-benefit way for your retirement.
Indices
Indices is a bucket of stocks that caters for investors as a benchmark to measure the overall market performance.
Index Funds
Index funds refer to a pool of securities that only tracks the performance of a specific index.
Income Funds
Debt funds that mainly concentrate on offering regular income to investors are known as income funds. These funds invest in corporate bonds, government bonds, money market, and other fixed-income instruments.
Initial Public Offer (IPO) Aftermarket
Trading a company’s shares that have been listed after completing the IPO is known as the aftermarket.
Intraday Trading
Intraday trading means the opening and closing of an investment position on the same day before the market gets closed.
Stock Market Glossary for J
Junk Bond
A high-yielding bond that has a credit rating of BB (below or less investment-grade junk).
Stock Market Glossary for K
Know Your Client
KYC is: knowing your customer or client, a standard that checks the identity of an individual, analyzes and understands their financial profile, and measures their investment knowledge.
Stock Market Glossary for L
Leverage
Leverage can be defined as an investment technique in which you borrow money for investment, raise funds, obtain additional assets, or maximize ROI for the company.
Liquid Asset
A liquid asset (money, market instruments, cash, marketable securities) refers to one that can easily be converted into cash with less or no loss in value.
Liquid Funds
Liquid funds refer to debt funds that invest in stable income securities with low maturity time (for 91 days).
Large-Cap Stocks
Large-cap or big-cap stocks refer to the stock or shares of companies with a market capitalisation of beyond $10 billion.
Large-Cap Funds
Large-cap funds refer to investment funds that mainly invest in companies with large market capitalisation. These funds offer low-risk investment options with fixed returns over time.
Locked-in Retirement Account (LIRA)
LIRA refers to a special registered retirement savings plan for locked-in pension funds. The account is RRSP, but account holders do not have the fund’s access till retirement.
Long-Term Investment Strategy
A plan that examines regular changes in the stock and bond market and accordingly responds to changes in the financial markets or economy is known as a long-term investment strategy.
Lipper Ratings
Lipper ratings are a system investment that is used by professionals to rate the performance of MF. It offers a blueprint to investors regarding how the funds have performed in the previous year and what’s the probability of performance in the upcoming years.
Loads (back-end, front-end, and no-load)
A load can be defined as a sales or commission charged to an investor for retrieving or buying shares in MF.
Front-end Loads – is made at the time of purchasing.
Back-end Loads – is evaluated at the time of redemption.
No Load – funds with zero sales charges.
Letter of Intent (LOI)
A LOI shows interest in buying partial ownership in a company or real estate or pinpoints the T&C of a defined investment by individuals or a group of investors.
Lumpsum
When an investor chooses to make a single payment method for making the investment it is known as a lump sum investment.
Lock-in
The lock-in time prevents an investor from selling the company’s stake after it gets listed on the stock market.
Stock Market Glossary for M
Mutual Funds
Investment funds pool money from several investors and invest that capital in different ranges of investment options to produce higher returns for their stakeholders.
Mutual Fund Dealer
Mutual fund dealers are the ones who help investors in buying, selling, and managing the shares of MF investments.
Management Fee
The management fee is a fee paid by investors to those who are handling investments on behalf of the client.
Management Expense Ratio (MER)
The sum of management fees and operating expenses which represents the value percentage of the fund is referred to as the management expense ratio.
Money Market Funds
Money market funds mainly invest in debt instruments which consist of a maturity limit of 1 year.
Market Segment
A market segment is a sub-section where similar types of assets are being traded.
Mid-Cap Stocks
Company stocks that have capitalized on a market size that is greater than the small-cap companies and smaller than the large-cap companies.
Market Price
The market price is a term in which buyers and sellers agree to trade the security and the amount of money for which an asset can be sold.
Mortgage-Backed Security (MBS)
MBS refers to a debt security that is backed by a mortgage or a group of mortgages.
Maturity Date
The maturity date is a condition when bonds, debentures, GIC, term deposits, or other debt instruments need to be paid back to the investors.
Market Correction
A market correction in the context of an investment field is a fluctuation in the process of stock from its existing state.
Margin Account
A brokerage or trading account that permits you to borrow some money to buy securities is termed a margin account.
Material Change
A change where a prudent and cautious investor wants to get detailed information before making any decision regarding financial investment is called material change.
Multibagger Stocks
Multibagger Stocks are those stocks of companies that are always expected to rise in value.
Stock Market Glossary for N
Net Asset Value (NAV)
Net Asset value refers to the net value of fund assets investment, which is lower than the liability of the fund divided by the number of outstanding stocks or shares.
Number of Holdings
Number of holdings is defined as the sum of individual securities in a fund or portfolio.
Net Profit Margin
Net profit margin is a ratio exposing the profitability of a company by factoring in taxes and expenses to observe whether the company is managing efficiently or not.
Nominal Return
Nominal return is a rate of investment return, which is not adjusted for inflation and taxes. In the case of a bond, it will be similar to a coupon rate.
Nominal Interest Rate
The rate of interest mentioned on the loan or investment, which is used for comparison, doesn’t factor in inflationary impacts.
Nasdaq
Nasdaq is a global electronic marketplace or computerized system that provides buying and selling securities opportunities to dealers and brokers with price quotations.
New Client Account Form
You must fill out or complete a new client account form while opening a securities trading account, including basic information and the preferences related to investors’ investments.
NFS Cheque (non-sufficient funds)
When the account balance is not sufficient enough to cover the amount of the cheque.
Net Asset Value Per Unit (NAVPU)
The net asset fund is divided by the number of issued units, which is also known as net asset value per share (NAVPS).
Stock Market Glossary for O
One-sided Market
A marketplace where there are either buyers or sellers is known as a one-sided market.
Option
Option refers to the right to buy or sell underlying assets for a fixed period at a defined price.
OHLC
An Open-High-Low-Close is a representation of the price movement of a specific asset considering a particular duration.
Open-ended Funds
An open-ended fund imposes a scheme of MF that is open for investors to buy or sell whenever they want without considering the time limit.
Offer Document
An offer document is defined as a quoted document that is issued by a firm for the shareholders of another firm that tells why the firm is taking interest in buying shares in the company and then explains every single detail connected to its offers.
Stock Market Glossary for P
Portfolio
A portfolio refers to the collection of shares, stocks, bonds, or other investments you have.
Portfolio Manager
A person who indulges in non-compulsory trades for institutional investors and high-net-worth individuals is known as a portfolio manager. Moreover, it is a firm or an individual that controls MF and a group of securities.
Price-to-Book (P/B) Ratio
The current price of stock of a particular company divided by its book value per share or net worth is referred to as the price-to-book ratio. It is the market value of a company if you compare it with book value.
Price-to-Earnings Ratio (P/E)
The price-to-earnings ratio is also popular as the price-to-earnings multiple. It is the ratio of a share price stock to its EPS.
Pump and Dump
Pump & dump is defined as the illicit scheme to escalate the price of securities or stocks based on wrong quotations.
Ponzi / Pyramids
The condition of occurrence of any fraud and no real investment is referred to as pyramids. Here, money is used or taken from new investors to pay the current investors to make it appear like the penny is being made or given.
Preferred Share
Preferred shares are also known as preferred stocks. These are the shares of a company’s stocks having dividends that are paid to shareholders before the issue of common stock dividends.
Property and Casualty Insurers
Property and casualty issuers mean to invest in primary bonds and liquid securities. In addition, these issuers provide security against lost property to cars, homes, and businesses.
Principal
Principal is the lending earning interest real investment or other source of income.
Purchasing Managers Index (PMI)
The PMI refers to an economic indicator such as employment, supplier deliveries, inventory levels, production, and new orders. Furthermore, it comprises monthly reports and surveys from the manufacturing sector.
Stock Market Glossary for Q
Quality Distribution
The breakdown of portfolio assets on the quality rating of investment is the quality distribution.
Stock Market Glossary for R
Redemption
The repayment of fixed-income bonds or securities before or at the date of maturity assets.
Ratings
Ratings refer to the assessments of stocks or bonds performed by a rating agency or an analyst after studying them.
Registered Retirement Income Fund (RRIF)
A RRIF is an account that enables you to produce a fixed and safe source of income during retirement.
Registered Retirement Savings Plan (RRSP)
A retirement plan that permits you to save tax-deferred for your retirement. Growth and income accumulate tax-free plans in your account until you withdraw the amount.
Reinvestment Option
The reinvestment of distribution of an income from an investment despite receiving cash is the reinvestment option.
Required Rate of Return (RR)
The required rate of return is the low return or profit that an investor receives when taking an investment risk in securities or stocks.
Relative Risk and Potential Return
The amount of potential return that you receive from an investment linked with the relative risk which you’re ready to take on is called relative risk and potential return.
Risk Premium (RP)
Risk premium is the investment return that an asset is anticipated to yield over the no-risk rate of return. The risk premium of an asset is a kind of compensation for those who are investing.
R2
R2 measures the performance of an asset and whether it can be accredited to the defined benchmark index performance.
Stock Market Glossary for S
Securities
Security is another name for a huge variety of investments, like investment contracts, debentures, limited partnership interest, bonds, stocks, gas or oil interests.
Social Bonds
Social bonds refer to stable income securities issued to finance or refinance current and new projects with good social effects. Additionally, these projects usually target unemployed individuals from vulnerable or low-income populations.
Sales Charge
The sales charge is meant for a few fund share sales that sales professionals or brokers usually sell.
Sharpe Ratio
The Sharpe ratio is the risk-adjusted return gauge of a financial portfolio.
Small-Cap
Small-cap is defined as the market capitalization of a company’s stocks having a market value of lower than $3 billion.
Sector
A sector is a group of the same securities in a specific industry, such as equities.
Sector Funds
Sector Funds are mutual funds that invest only in a specific sector.
Sector Breakdown
The breakdown of securities by a group of industries in a portfolio is known as the sector breakdown.
Short-Term Investment
Short-term investment refers to an asset bought with an investment span of less than one year.
Share Class
The designation applied to a specific type of security, like an MF unit or common stock is called a share class.
Short Selling
When investors borrow securities and further sell them in the open market with the strategy to buy them back later for less money.
Systematic Withdrawal Plan
Systematic withdrawal plans enable you to withdraw a stable amount from an MF at regular intervals.
Systematic Investment Plan
A SIP is an investment plan where an investor invests a specific amount of money every month in a security.
Stock Market Glossary for T
Term Deposit
It is a deposit type or the total money kept for a maturity. Here, the payee cannot withdraw the amount till the maturity time is over.
Treasury Bill (T-bill)
A money or security market instrument that is issued by the government for the short term is known as a treasury bill.
Term to Maturity
Term to maturity signifies the time before the bond gets mature and redeemed.
Trading Range
The disparities between high and low prices within a specific frame of time is the trading range.
Trading Account
An account that benefits you to transact in multiple securities like MF units, bonds, stocks, etc. most of the trading accounts ask you to pay a maintenance fee annually.
Trade Deficit
Trade deficit is also popular as a negative trade balance when a country’s exports are less than its imports.
Tax-Free Savings Account (TFSA)
A registered type of investment savings account that benefits you by increasing your earnings tax-free amount.
Trailing Commission
A trailing commission refers to an ongoing fee that you annually pay to your financial advisor when you own an investment. The commission differs depending on the fund type and series of funds you buy.
Tightening Cycle
A tightening cycle is a cycle of rising interest rates. It is the time featured by lower interest rates, enhancement in the credit amount, and lower lending needs.
Time Horizon
The time horizon is when investors would have their interest accounted for in a scheme. It’s also the time horizon that allows investors to withdraw from their investments.
Ticker Symbol
A one-to-five-letter symbol that is used to search for a company to represent particular assets or securities or a stock exchange.
Stock Market Glossary for U
Units
A unit indicates the extent of your ownership in an MF or is a part of ownership in an MF.
Unitholder
A unitholder refers to an investor that owns more than one unit in an investment trust.
United Nations Supported Principles for Responsible Investment (PRI)
It is a network of official investors that aims to encourage sustainable investment by implementing social, governance, and environmental factors.
United Nations-convened Net-Zero Asset Owner Alliance
It is a group of institutional investors to achieve net-zero GHG emissions in their portfolio of investments by 2050.
United Nations Global Compact (UNGC)
It is an initiative and strategic policy that looks to mobilize a worldwide movement of companies and sustainable stakeholders in the fields of human rights, labour, environment, and anti-corruption.
Stock Market Glossary for V
Volatility
The regularity and amount with which investments differ in value.
Valuation
Valuation refers to the process of examining the estimated value of a company, asset, or investment rather than its existing cost or value.
Value Stock
Value stock is defined as a stock that is always underpriced in the stock market.
Value Investing
An investment plan comprised of choosing stocks that ensure trading for less value than intrinsic or book value is called value investing.
Value-Style Funds
An open-ended equity scheme that majorly invests in undervalued market stocks is known as a value-style fund.
VRM (Vendor Risk Management)
A VRM is a corporate-level benefit that checks vendor behaviour and access and makes sure that the vendor does not hamper a business in any way.
Stock Market Glossary for W
Weighted Average Maturity
A weighted average maturity can be defined as calculating the sensitivity of funds to feasible interest rate changes. Moreover, you can calculate WAM by weighting the maturity of every bond present in the fund by the net assets percentage of a fund.
Weighted Average Market Cap
Weighted average market cap is a market index that assigns weights to its component according to the capitalization of the total market.
Stock Market Glossary for Y
Yield
Yield refers to the annual return percentage earned on the capital. Additionally, the dividend or interest paid by any firm is shown as the percentage of the existing price.
Yield to Maturity
Yield to maturity is the sum of the rate of return you expect from investments in bonds or debt mutual funds if the similar is organized to its maturity date.
Yield to Maturity Distribution
The yield-to-maturity distribution refers to the sum of the rate of return an investor could get if a bond makes all feasible payments of interest and repays the real principal amount.
YTD
Year-to-date return is the profit earned on an investment that includes appreciation and dividends or interest.
YTD Return
YTD return is the profit that an investor earns via investment since the beginning of the trading day of the current year.
YTD Return (w load)
YTD return on investments includes appreciation and dividends or interest minus the expenses or other applicable charges.
Stock Market Glossary for Z
Zero-Coupon Bond
Zero-coupon bonds are bonds that are sold at a discount of face value, providing the principal amount at maturity but leaving the regular payment of interest.
Don’t forget to check out: Key Investment Terminology Explained: A to Z
Final Words
In all, the above-mentioned stock market glossary will be beneficial for all beginners who have a better financial understanding to implement in the business. Moreover, if you’re seeking to invest in stocks, bonds, or other market securities you must consider Moomoo, Vested, and eToro.
So, start trading today and earn huge!
