Stock Market Definitions
What is stock Market?
Stock
Market is a public entity and place where securities of listed companies of
stock exchange are traded.
Importance of Stock Market
It
is most important to company to increase their capital by selling their shares.
Business organizations get a chance to trade them self publicly. Increasing in
per shares price helps to increase the investment.
How do shares trade?
Share
trade is, in which buyer of share offers a certain price at the same time
seller demands a certain price for the stock.
When their demand matches the trade occurs.
What is the purpose of Stock
Market?
The
purpose of stock market is to provide a marketplace for buyers and sellers in
order to exchange securities and real information.
Who are the market participants?
There
are many kinds of market participants those are mutual funds, banks, insurance
companies and hedge funds, and also publicly traded corporations who are
trading their own share.
What is preferred share?
Preferred
is such a share if one person buy this share, he has the right to get dividend.
Generally preferred stock holder get dividend before the common share holder,
and has a less risk to decrease the stock price than the common share.
What is broker house?
Broker
house is such a place where the share is sold and bought. For buying and
selling the share the broker house charges commission.
What is warrant?
Corporation
issues this warrant that means that share stock holder can purchase the common
share stock at a predefined price.
What are stock indexes?
This
is a cluster of stocks which shows the stock market as a full or a specific
part. In the stock indexes, the daily trading or performance is recorded so
that the investors can understand the market performance.
What is book?
It
is a record in electronic way that represent pending buy and sell of a specific
share.
Beta
It
is a way to measure relationship between the stock price and the movement of
stock market.
Security
Security
is usually a fungible, negotiable financial instrument representing financial value.
IPO
It
stands for Initial Public Offering. It refers to the first sale of the stock of
any company to the public. As the result of an Initial public Offering a
private company turns into a public company.
Paid –up capital
Paid-up capital is the total amount of shareholder capital
that has been paid in full by shareholders. The amount of money that company
has received from sell of its share and it is not borrowed. It sold all of it’s
available share. And the company cannot increase its capital unless through
debt or authorized to sell.
Paid – up capital
Paid up capital is the capital that company has received
from sell of its share. It is fully paid by the shareholders.
Annual Report
It
is the publication of financial statements and a report on operations, issued
by a company to its shareholders, at the end of the fiscal year.
Agent
Agent
is a securities firm that acts as buyer or seller of securities on behalf of
its clients. But agent is not the owner of the firm.
Broker
A person who buys or sells stocks,
bonds, commodities, this is called broker.
Dividend
Dividend
is the portion of a company’s profit which is given back to the investors. Such
payments are made on either an annual or quarterly basis.
Ask Size
The
total size in board lots of the most recent ask to sell a particular security.
Bid
Bid is the highest price that a
buyer is willing to pay for a stock.
Bid-Ask-Spread
The bid-ask spread or, "the spread" is the difference between a security's bid price and its ask price.
Bid-To-Cover Ratio
Is a ratio used to express the demand for a particular security during offerings and auctions. In general, it is
used for shares, bonds, and other securities.
Bear Market
When
the stock price is falling, it is called bear market.
Bull Market
When
stock price is rising, it is called bull market.
Option Series
It
is an individual option contract for a given security.
All-or-None Order
An
order that must be filled completely otherwise the trade will not take place.
Day Order
An order is entered & is valid only for
that day. If the order is still outstanding when the market closes, it will be
purged overnight.
Share
A
share is a single unit of
ownership of corporation or mutual fund or any type of organization.
Bond
A
bond is a flexible permit that
acknowledges the gratitude of the bond issuer to the holder.
Penny Stock
Low
priced speculative stock selling at less than $1.00 a share.
Portfolio
Portfolio
means the holdings of securities by an individual or institution.
Stock
Repurchase
It
happens when company its self purchases it’s share
Liquidity
This
term refers to the ability of organization to pay off its debt as early as
possible.
Rate
of return
(ROR)
Is
the ratio of money gained or lost on an investment comparing to the amount of
money invested.
Face Value
Face value is the fixed value of the
share. When shares are issued in the market in a certain vale, then it is
called face value. It does not change.
Book
value
Book
value is the value of the share which is shown in the balance at the end of the
year. Book value is the present value of the share. It generally changes.
Circuit breakers
Measures instituted to stop trading
temporarily when rises or fall too far.
Primary
market
It
is the part of the capital markets that deals with the issuance of new
securities.
Electronic
communication network
(ECN)
ECN
is a computer system that facilitates trading of financial products outside of
stock exchanges.
Daily Price Limit
The
maximum price that is increase or decrease & permitted for a future
contract in one trading session compared to the previous day's settlement
price.
Position Limit
The
position limit is the maximum number of futures or options contracts, which is
acted together by an individual or a group of people hold at one time.
Debt Value
The
total dollar value of volume traded on one side of the transaction for a
specified period. It equals price multiplied by volume divided by 100.
Debt Volume
The
number of debt instruments traded on one side of the transaction for a specified
period multiplied by the face value of the debt instrument.
Market Capital
By
multiplying number of outstanding shares and current price per share we get
market capital
Partial Fill
When
partial fill trades only one part of its total committed volume, that time an
order receives it.
Stock
broker
A
stock broker is a regulated
professional person who buys and sells shares and other securities through market makers or agency.
Market
maker
A
market maker is a company, or an
individual, that buy and sell price in a monetary tool or commodity held in
inventory, to make a profit.
Trader
A
trader is a person who buys and
sells financial instruments such as stocks, bonds,
commodities
and derivatives.
Dividends
Dividends are payments made by a
corporation to its shareholder.
Call Money
Money
loaned by a bank that must be repaid on demand. It is used as a short-term
source of funding to cover limit accounts or the purchase of securities.
Camel Rating
The
Capital, Asset, Management, Earning, Liquidity and Sensitivity (CAMELS) rating
of corporations
Off-exchange
Refers
to buy and sell financial instruments such as stocks, bonds etc directly
between two parties.
Stock valuation
Is
the way of counting intangible assets of companies and their stocks. It helps to predict future of the company, market price
etc.
Intrinsic
value
It
is the basic value of securities.
It was pretty helpful. If you can post more stock market related terms, please post them. I am in need of that kind of terms and their related info.....
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