![]() It refers to a period in which the prices of equity shares fall consistently. Under this scenario, the strike price of an option is equal to the market price of the underlying asset which it represents.Ī person who purchases or sells investments/stocks on behalf of the investor/trader in return for a commission. It refers to the lowest price at which the owner of the equity share is willing to sell the share in the stock market. Here is a glossary of basic terms that you need to know as an investor:Īn agent is a stock brokerage firm which does the buying/selling of shares on behalf of the investor in the stock market. You will end up becoming not only a better investor but also a successful trader as your vocabulary on the stock market grows. Whether you are a budding or seasoned stock investor, knowledge of the basic terms used in the stock market is necessary. It’s typically a condition where the prices of securities fall by 20% from the recent highs. If the stock market experiences prolonged periods of price declines, you have a bear market. When the stock market is on the rise and the economy is sound, you have a bull market. Some of the most common terms used in the stock market are the bull and the bear market. Moreover, it will also enhance your understanding of the relationship between stock markets and events happening in the economy. As an equity enthusiast, you must know these terms really well in order to make money in the stock markets. Even the experts and amateurs use these terms frequently to explain trading strategies, indices, stock market patterns and other components of the stock market. Stock market terminology relates to industry-specific jargon which are used in the stock markets regularly. Why should you know about stock market terminology? ![]() The final stage is the settlement which involves the pay in and pay out of funds and securities which takes place on the last day of the trade cycle. The clearing house of the stock exchange would then clear the trade. It is followed by the matching and execution of the placed order. The first step of the trade life cycle involves placing the order. In simple terms, you have two days for the trade cycle to be completed from initiation to final settlement. The settlement cycle follows the T+2 format. Here, the buyers and sellers place orders through brokers who offer online trading services. In India, the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) are the major platforms where most of the stock trading happens. Traders, however, look for quick profits by focusing on the small price changes in equity shares which mostly last for a few minutes or the whole trading session. The investors mainly have a long-term horizon and benefit from capital appreciation over time. The participants can be investors and traders who seek profits over the short time or the long run. Stock market is a place where equity shares of companies are bought and sold by the participants (buyers and sellers of stocks). ![]()
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