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Market Terms

Market timings​

Equity​

  • 9 am to 9.15 am -- Pre market
  • 9.15 am to 3.30 pm -- Normal trading
  • 3.40 pm to 4.00 pm -- Post market

Currency​

  • 9 am to 5 pm -- Normal trading

Commodity​

  • 9 am to 11.30 pm -- during day light savings time - March to November
  • 9 am to 11.55 pm -- November to March

Bulls make money, bears make money, but pigs get slaughtered.

Apps / Tools​

Trading tools​

Stock Market​

Investing ensures financial security, and the Stock market plays a pivotal role in this domain, it is a place where people buy/sell shares of publicly listed companies. In this module, you will learn about the fundamentals of the stock market, how to get started, how it functions and the various intermediaries that appertain it.

Stock Market Participants​

  1. Domestic Retail Participants - These are people like you and me transacting in markets
  2. NRI's and OCI - These are people of Indian origin but based outside India
  3. Domestic Institutions - These are large corporate entities based in India. A classic example would be the LIC of India.
  4. Domestic Asset Management Companies (AMC) - Typical participants in this category would be the mutual fund companies such as SBI Mutual Fund, DSP Black Rock, Fidelity Investments, HDFC AMC, etc.
  5. Foreign Institutional Investors - Non-Indian corporate entities. These could be foreign asset management companies, hedge funds, and other investors

SEBI (The Securities and Exchange Board of India)​

  1. The stock exchanges (BSE and NSE) conducts its business fairly
  2. Stockbrokers and sub-brokers conduct their business fairly
  3. Participants don't get involved in unfair practices
  4. Corporate's don't use the markets to unduly benefit themselves (Example -- Satyam Computers)
  5. Small retail investors interests are protected
  6. Large investors with huge cash pile should not manipulate the markets
  7. An overall development of markets
EntityExample of companiesWhat do they do?In simpler words
Credit Rating Agency (CRA)CRISIL, ICRA, CAREThey rate the credit worthiness of corporate and governmentsIf a corporate or Govt entity wants to avail loan, CRA checks if the entity is worthy of giving a loan
Debenture TrusteesAlmost all banks in IndiaAct as a trustee to corporate debentureWhen companies want to raise a loan they can issue debenture against which they promise to pay an interest. These debentures can be subscribed by public. A Debenture Trustee ensures that the debenture obligation is honored
DepositoriesNSDL and CDSLSafekeeping, reporting and settlement of clients securitiesActs like a vault for the shares that you buy. The depositories hold your shares and facilitate exchange of your securities. When you buy shares these shares sit in your Depositary account usually referred to as the DEMAT account. This is maintained electronically by only two companies in India
Depositary Participant (DP)Most of the banks and few stock brokersAct as an agent to the two depositoriesYou cannot directly interact with NSDL or CDSL. You need to liaison with a DP to open and maintain your DEMAT account
Foreign Institutional InvestorsForeign corporate, funds and individualsMake investments in IndiaThese are foreign entities with an interest to invest in India. They usually transact in large amounts of money, and hence their activity in the markets have an impact in terms of market sentiment
Merchant BankersKarvy, Axis Bank, Edelweiss CapitalHelp companies raise money in the primary marketsIf a company plans to raise money by floating an IPO, then merchant bankers are the ones who help companies with the IPO process
Asset Management Companies (AMC)HDFC AMC, Reliance Capital, SBI CapitalOffer Mutual Fund SchemesAn AMC collects money from the public, puts that money in a single account and then invests that money in markets with an objective of making the investments grow and thereby generate wealth to its investors.
Portfolio Managers / Portfolio Management System (PMS)Religare Wealth Management, Parag Parikh PMSOffer PMS schemesThey work similarly to a mutual fund except in a PMS you have to invest a minimum of Rs.25,00,000 however there is no such cap in a mutual fund
Stock Brokers and Sub BrokersZerodha, Sharekhan, ICICI DirectAct as a intermediary between an investor and the stock exchangeWhenever you want to buy or sell shares from the stock exchange you have to do so through registered stock brokers. A sub broker is like an agent to a stock broker

DEMAT - Dematerialization​

Before 1996 the share certificate was in paper format however post 1996, the share certificates were converted to digital form. The process of converting a paper format share certificate into a digital format share certificate is called "Dematerialization" often abbreviated as DEMAT.

At present, there are only two depositaries offering you DEMAT account services. They are The National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited. There is virtually no difference between the two and both of them operate under strict SEBI regulations.

Just like the way you cannot walk into National Stock Exchange's office to open a trading account, you cannot walk into a Depository to open a DEMAT account. To open a DEMAT account you need to liaison with a Depository Participant (DP). A DP helps you set up your DEMAT account with a Depository. A DP acts as an agent to the Depository. Needless to say, even the DP is governed by the regulations laid out by the SEBI.

NSCCL and ICCL​

NSCCL -- National Security Clearing Corporation Ltd and Indian Clearing Corporation are wholly owned subsidiaries of National Stock Exchange and Bombay Stock Exchange respectively.

The job of the clearing corporation is to ensure guaranteed settlement of your trades/transactions. For example, if you were to buy 1 share of Biocon at Rs.446 per share there must be someone who has sold that 1 share to you at Rs.446 . For this transaction, you will be debited Rs.446 from your trading account and someone must be credited that Rs.446 toward the sale of Biocon. In a typical transaction like this the clearing corporation's role is to ensure the following:

a) Identify the buyer and seller and match the debit and credit process

b) Ensure no defaults -- The clearing corporation also ensures there are no defaults by either party. For instance the seller after selling the shares should not be in a position to back out thereby defaulting in his transaction.

Party Fund Stocks​

Get in and out quickly and use the money to party

The National Association of Software & Services company (NASSCOM)

Absolute Return -[Ending Period Value / Starting Period Value -- 1]*100​

Trader​

A trader is a person who spots an opportunity and initiates the trade with an expectation of profitably exiting the trade at the earliest given opportunity. A trader usually has a short term view on markets. A trader is alert and on his toes during market hours constantly evaluating opportunities based on risk and reward. He is unbiased toward going long or going short. We will discuss what going long or short means at a later stage.

There are different types of traders​

  • Day Trader-- A day trader initiates and closes the position during the day. He does not carry forward his positions. He is risk averse and does not like taking overnight risk. For example -- He would buy 100 shares of TCS at 2212 at 9:15AM and sell it at 2220 at 3:20 PM making a profit of Rs.800/- in this trade. A day trader usually trades 5 to 6 stocks per day.

  • Scalper-- A type of a day trader. He usually trades very large quantities of shares and holds the stock for very less time with an intention to make a small but quick profit. For example -- He would buy 10,000 shares of TCS as 2212 at 9:15 and sell it 2212.1 at 9.16. He ends up making 1000/- profit in this trade. In a typical day, he would have placed many such trades. As you may have noticed a scalp trader is highly risk averse.

  • Swing Trader-- A swing trader holds on to his trade for slightly longer time duration, the duration can run into anywhere between few days to weeks. He is typically more open to taking risks. For example -- He would buy 100 shares of TCS at 2212 on 12thJune 2014 and sell it 2214 on 19thJune 2014.

Some of the really successful traders the world has seen are -- George Soros, Ed Seykota, Paul Tudor, Micheal Steinhardt, Van K Tharp, Stanley Druckenmiller etc

Scalper​

Scalpers are a specific type of short-term trader that may dart in and out of a stock or other asset class dozens, or in some cases even hundreds, of times a day.

  • Scalpers are often high-energy individuals who thrive during times of stress and have the means and temperament to handle the high trading volume.
  • Most often, because scalping requires considerable time, money, and skill, scalpers are professional traders.

https://www.investopedia.com/articles/trading/02/081902.asp

Investor​

An investor is a person who buys a stock expecting a significant appreciation in the stock. He is willing to wait for his investment to evolve. The typical holding period of investors usually runs into a few years. There are two popular types of investors..

  • Growth Investors-- The objective here is to identify companies which are expected to grow significantly because of emerging industry and macro trends. A classic example in the Indian context would be buying Hindustan Unilever, Infosys, Gillette India back in 1990s. These companies witnessed huge growth because of the change in the industry landscape thereby creating massive wealth for its shareholders.

  • Value Investors-- The objective here is to identify good companies irrespective of whether they are in growth phase or mature phase but beaten down significantly due to the short term market sentiment thereby making a great value buy. An example of this in recent times is L&T. Due to short term negative sentiment; L&T was beaten down significantly around August/September of 2013. The stock price collapsed to 690 all the way from 1200. At 690 (given its fundamentals around Aug 2013), a company like L&T is perceived as cheap, and therefore a great value pick. Eventually it did pay off, as the stock price scaled back to 1440 around May 2014.

20 - Market Depth​

https://zerodha.com/z-connect/featured/introducing-20-depth-or-level-3-data-beta-on-kite

https://zerodha.com/varsity/chapter/supplementary-note-the-20-market-depth

Types of Markets​

  • Bull market
  • Bear market
  • Recovering market
  • Market crashes
  • Side ways market

Bull Market (Bullish)​

If you believe that the stock prices are likely to go up then you are said to be bullish on the stock price. From a broader perspective, if the stock market index is going up during a particular time period, then it is referred to as the bull market

Bear Market (Bearish)​

If you believe that the stock prices are likely to go down then you are said to be bearish on the stock price. From a broader perspective, if the stock market index is going down during a particular time period, then it is referred to as the bear market

Trend​

The term 'trend' usually refers to the general market direction, and its associated strength. For example, if the market is declining fast, the trend is said to be bearish. If the market is trading flat with no movement then the trend is said to be sideways

Face value of a stock​

Face value (FV) or par value of a stock indicates the fixed denomination of a share. The face value is important with regard to a corporate action. Usually, when dividends and stock split are announced they are issued keeping the face value in perspective. For example, the FV of Infosys is 5, and if they announce an annual dividend of Rs.63/- then it means the dividend paid is 1260%s (63 divided by 5)

52 week high/low​

52 week high is the highest point at which a stock has traded during the last 52 weeks (which also marks a year) and likewise 52 week low marks the lowest point at which the stock has traded during the last 52 weeks. The 52 week high and low gives a sense of the range within which the stock has traded during the year. Many people believe that if a stock reaches 52 week high, then it indicates a bullish trend for the foreseeable future. Similarly, if a stock hits 52 week low, some traders believe that it indicates a bearish trend for a foreseeable future

All-time high/low​

This is similar to the 52 week high and low, with the only difference being the all-time high price is the highest price the stock has ever traded from the time it has been listed. Similarly, the all-time low price is the lowest price at which the stock has ever traded from the time it has been listed

Upper Circuit/Lower Circuit​

The exchange sets up a price band at which the stock can be traded in the market on a given trading day. The highest price the stock can reach on the day is the upper circuit limit and the lowest price is the lower circuit limit. The limit for a stock is set to 2%, 5%, 10% or 20% based on the exchange's selection criteria. The exchange places these restrictions to control excessive volatility when a stock reacts to certain news related to the company

Long Position​

Long position or going long is simply a reference to the direction of your trade. For example, if you have bought or intend to buy Biocon shares then you are said to be long on Biocon or planning to go long on Biocon respectively. If you have bought the Nifty Index with an expectation that the index will trade higher then essentially you have a long position on Nifty. If you are long on a stock or an index, you are said to be bullish

Short Position​

Going short or simply 'shorting' is a term used to describe a transaction carried out in a particular order. This is a slightly tricky concept

The concept of shorting is very counter-intuitive simply because we are not used to 'shorting' in our day to day activity unless you have a trader mentality 🙂

Going back to stock markets, think about this very simple transaction -- on day 1 you buy shares of Wipro at Rs.405, two days later (day 3) the stock moves and you sell your shares at Rs.425. You made a profit of Rs.20/- on this transaction.

In this transaction, your first leg of the trade was to buy Wipro at Rs.405, and the second leg was to sell Wipro at Rs.425, and you were bullish on the stock.

Going forward, on day 4, the stock is still trading at Rs.425, and you are now bearish on the stock. You are convinced that the stock will trade lower at Rs.405 in a few days' time. Now, is there a way you can profit out of your bearish expectation? Well, you could, and it can be done so by shorting the stock.

You sell the stock at Rs.425, and 2 days later assuming the stock trades at Rs.405, you buy it back.

If you realize the first leg of the trade was to sell at Rs.425, and the second leg was to buy the stock at Rs.405. This is always the case with shorting -- you first sell at a price you perceive as high with the intention of buying it back at a lower price at a later point in time.

You have actually executed the same trade as buying at Rs.405 and selling at Rs.425 but in reverse order.

An obvious question you may have -- How can one sell Wipro shares without owning it. Well, you can do so, just like the way I sold a phone that I did not own.

When you first sell, you are essentially borrowing it from someone else in the market, and when you buy it back, you actually return the shares back. All this happens in the backend, and the stock exchange facilitates the process of borrowing and returning it back.

In fact, when you short a stock, it works so seamlessly that you will not even realize that you are borrowing it from someone else. From your perspective, all you need to know is that when you are bearish on the stock, you can short the stock, and the exchange takes care of borrowing the stock on your behalf. When you buy the stocks back, the exchange will ensure the stocks are returned back.

When you short, you have a bearish view on the stock. You profit if the stock price goes down. After you short, if the stock price goes up, you will end up making a loss

When you short you essentially borrow from another market participant, and you will have to deliver these shares back. You need not worry about the mechanics of this. The system will ensure all this happens in the background

Shorting a stock is easy -- either you call your broker and ask him to short the stock or you do it yourself by selecting the stock you wish to short, and click on sell

For all practical purposes, if you want to short a stock, and hold the position for few days, it is best done on the derivatives markets

When you are short, you make money when the stock price goes down. You will make a loss if the stock price goes up after you have shorted the stock.

To summarize long and short positions...

Position1st Leg2nd LegExpectationMake money whenYou will lose money if

LongBuySellBullishStock goes upStock price drops

ShortSellBuyBearishStock goes downStock price goes up

Square off​

Square off is a term used to indicate that you intend to close an existing position. If you are long on a stock squaring off the position means to sell the stock. Please remember, when you are selling the stock to close an existing long position you are not shorting the stock

When you are short on the stock, squaring off a position means to buy the stock back. Remember when you buy it back, you are just closing an existing position and you are not going long!

When you areSquare off position is

LongSell the stock

ShortBuy the stock

Intraday position -- This is a trading position you initiate with an expectation to square off the position within the same day.

Short Covering​

Short covering refers to buying back borrowed securities in order to close out an open short position at a profit or loss. It requires purchasing the same security that was initially sold short, and handing back the shares initially borrowed for the short sale. This type of transaction is referred to as buy to cover.

  • Short covering can result in either a profit (if the asset is repurchased lower than where it was sold) or for a loss (if it is higher).
  • Short covering may be forced if there is a short squeeze and sellers become subject to margin calls. Measures of short interest can help predict the chances of a squeeze.

https://www.investopedia.com/terms/s/shortcovering.asp

Short Squeeze​

A short squeeze is an unusual condition that triggers rapidly rising prices in a stock or other tradable security. For a short squeeze to occur, the security must have an unusual degree of short sellers holding positions in it. The short squeeze begins when the price jumps higher unexpectedly. The condition plays out as a significant measure of the short sellers coincidentally decide to cut losses and exit their positions.

  • A short squeeze accelerates a stock's price rise as short sellers bail out to cut their losses.
  • Contrarian investors try to anticipate a short squeeze and buy stocks that demonstrate a strong short interest.
  • Both short sellers and contrarians make risky moves. A wise investor has additional reasons for shorting or buying that stock.

https://www.investopedia.com/terms/s/shortsqueeze.asp

https://www.investopedia.com/ask/answers/050715/what-difference-between-short-squeeze-and-short-covering.asp

"Short covering" and "short squeeze" are different terms to describe a situation involving short positions. A short squeeze is a situation in which a security's price increases significantly, causing short sellers to close their short positions. Conversely, short covering involves buying back a security to close out an open short position.

Volume​

Volumes and its impact on the stock prices is an important concept that we will explore in greater detail in the technical analysis module. Volumes represent the total transactions (both buy and sell put together) for a particular stock on a particular day. For example, on 17th June 2014, the volume on ACC was 5, 33,819 shares

Market Segment​

A market segment is a division within which a certain type of financial instrument is traded. Each financial instrument is characterized by its risk and reward parameters. The exchange operates in three main segments

  1. Capital Market -- Capital market segments offer a wide range of tradable securities such as equity, preference shares, warrants, and exchange-traded funds. Capital Market segment has sub-segments under which instruments are further classified. For example, common shares of companies are traded under the equity segment abbreviated as EQ. So if you were to buy or sell shares of a company you are essentially operating in the capital market segment

  2. Futures and Options (F&O) -- Futures and Option, generally referred to as the equity derivative segment is where one would trade leveraged products. We will explore the derivative markets in greater depth in the derivatives module

  3. Wholesale Debt Market -- The wholesale debt market deals with fixed income securities. Debt instruments include government securities, treasury bills, bonds issued by a public sector undertaking, corporate bonds, corporate debentures, etc.

https://zerodha.com/varsity/chapter/commonly-used-jargons

  • MIS - Margin Intraday Settlement
  • CNC - Cash and Carry

Select CNC for delivery trades. Meaning if your intention is to buy and hold the shares for multiple days/months/years then you need to ensure the shares reside in your Demat account. Selecting CNC is your way of communicating this to your broker.

Select NRML or MIS if you want to trade intraday. MIS is a margin product;

Buy Today, Sell Tomorrow" (BTST) or "Acquire Today, Sell Tomorrow" (ATST)

Complexity​

Simple Order

AMO - After Market Orders (after 3:30)

CO - Cover Order​

Stop loss is must (good for intraday traders, long term investors not so much)

OCO - One Cancels Other (Bracket Order)

Both target price and stop loss price

Order Type​

Market Order - No bargain, buy at market face value​

when you intend to buy at market available prices instead of a very specific price that you have in mind

Limit - Add your bid for the stock​

when you are very particular about the price you want to pay for a stock.

SL Limit​

stop loss order

SL Market​

Position​

  • Intraday - Don't send to demat account
  • Delivery - Send to demat account
  • TIF (Time in Force)
  • Day - Till the end of day if Limit get's triggered
  • IOC - Now or never at Limit order

OHLC - Open (O), high (H), low (L), and close (C)​

OHLC stands for open, high, low and close. We will understand more about this in the technical analysis module. For now, open is the price at which the stock opens for the day, high is the highest price at which the stock trade during the day, low is the lowest price at which the stock trades during the day and the close is the closing price of the stock. For example, the OHLC of ACC on 17th June 2014 was 1486, 1511, 1467 and 1499.

The Last traded price (LTP) usually differs from the closing price of the day. This because theclosing priceof the day on NSE is the weighted averagepriceof the last 30 mins of trading. Last tradedpriceof the day is the actual last tradedprice.

  • Gap up opening
  • Gap down opening

EPS (TTM) - Earnings per Share (Trailing Twelve Months)​

Trailing 12 months (TTM) is a term used to describe the past 12 consecutive months of a company's performance data, that's used for reporting financial figures.

Book value​

Book value reflects the total value of a company's assets that shareholders of that company would receive if the company were to be liquidated

The book value literally means the value of a business according to its books (accounts) that is reflected through its financial statements. Theoretically, book value represents the total amount a company is worth if all its assets are sold and all the liabilities are paid back. This is the amount that the company's creditors and investors can expect to receive if the company is liquidated.

GDR​

Aglobal depository receipt(GDRand sometimes spelleddepositary) is a general name for a depositary receipt where a certificate issued by a depository bank, which purchases shares of foreign companies, creates a security on a local exchange backed by those shares. They are the global equivalent of the original American depositary receipts(ADR) on which they are based. GDRs represent ownership of an underlying number of shares of a foreign company and are commonly used to invest in companies from developing or emerging markets by investors in developed markets.

Prices of global depositary receipt are based on the values of related shares, but they are traded and settled independently of the underlying share. Typically, 1 GDR is equal to 10 underlying shares, but any ratio can be used. It is a negotiable instrument which is denominated in some freely convertible currency.GDRs enable a company, the issuer, to access investors in capital markets outside of its home country.

Several international banks issue GDRs, such as JPMorgan Chase, Citigroup, Deutsche Bank, The Bank of New York Mellon. GDRs are often listed in the Frankfurt Stock Exchange, Luxembourg Stock Exchange, and the London Stock Exchange, where they are traded on the International Order Book (IOB).

https://en.wikipedia.org/wiki/Global_depository_receipt

Orders​

  • Product types
    • CNC (Cash n Carry)
    • MIS (Margin Intraday Squareoff)
    • NRML (Normal F&O trades)
  • Order types
    • Limit (LMT) order
    • Market (MKT) order
    • Stoploss or trigger orders (SL and SL-M)
    • Good till triggered (GTT)
      • Single trigger
      • OCO (One Cancels the Other) trigger
    • Basket orders
  • Advanced order types
    • Regular orders with time validity
    • Cover orders
    • Cover order with limit entry
    • AMO (After market orders)

https://kite.trade/docs/kite/orders

Demat Account​

Demat means dematerializing shares into digital format rather than on physical paper.

The demat account is used as a bank where shares bought are deposited in, and where shares sold are taken from.

Trading Account​

A trading account is used to place buy or sell orders in the stock market.

CFD (Contract for Difference)​

The contract for difference (CFD) offers European traders andinvestors an opportunity to profitfrom price movement without owning the underlying asset. It's a relatively simple securitycalculatedby the asset's movementbetween trade entry and exit, computing only the price changewithoutconsideration of the asset's underlying value.1 This is accomplished through a contract between client and broker, and does not utilize any stock, forex, commodityor futures exchange.Trading CFDsofferseveral major advantagesthat haveincreased the instruments' enormous popularityin the past decade.

Binary Option​

A binary option is a financial product where the buyer receives a payout or loses their investment, based on if the option expires in the money. Binary options depend on the outcome of a "yes or no" proposition, hence the name "binary." Binary options have an expiry date and/or time. At the time of expiry, the price of the underlying asset must be on the correct side of the strike price(based on the trade taken) for the trader to make a profit.

Carry Forex / Carry Trade​

A currency carry trade is a strategy whereby a high-yielding currency funds the trade with a low-yielding currency. A trader using this strategy attempts to capture the difference between the rates, which can often be substantial, depending on the amount of leverage used.

The carry trade is one of the most popular trading strategies in the forex market. The most popular carry trades have involved buying currency pairs like the Australian dollar/Japanese yen and New Zealand dollar/Japanese yen because the interest rate spreads of these currency pairs have been quite high. The first step in putting together a carry trade is to find out which currency offers a high yield and which one offers a low yield.

Currency Carry Trade: Definition as Trading Strategy and Example

Is it possible to take a loan from Japan (since they have very low interest rate) and invest in fixed deposit in india? - Quora

Others​

capital gains taxa tax on a positive return on an investment resulting from the sale price of a security being higher than the purchase price
capital lossa negative return on an investment resulting from the sale price of a security being lower than the purchase price
Employee Stock Purchase Plan (ESPP)a type of stock plan that allows employees to purchase shares of company stock via accumulated payroll deductions, sometimes at a discount
holding periodthis refers to the amount of time that stocks or options must be held before they can be sold or exercised; the holding period requirements are described in the plan documents
in the moneya stock option is "in the money" when the current market price of your company stock is above the grant price
out of the moneya stock option is "out of the money" or "under water" when its grant price is above the current market price
positionsrefers to the stock you hold in your account for a particular company; for example, if you hold stock in 2 different companies within your account, you have "2 positions"
restricted stock award (RSA)a grant of company stock in which your rights to the stocks are restricted until the award vests, also known as a lapse in restrictions; once the shares vest, they are deposited into your Fidelity Accountand are yours to hold, sell, or transfer
restricted stock unit (RSU)a grant valued in terms of company stock that is restricted until the award vests; after the vesting requirement is satisfied, your company distributes shares or the cash equivalent https://www.investopedia.com/terms/r/restricted-stock-unit.asp
stock appreciation right (SAR)an award that provides the holder with the ability to profit from the appreciation in value of a set number of shares of company stock over a set period of time
stock swapa form of stock option exercise in which you exercise your option to acquire shares of your company stock by exchanging shares of a stock you currently own instead of cash to pay the exercise cost
stop orderstop orders are generally used to protect a profit or to prevent further loss if the price of a security moves against you; they can also be used to establish a position in a security if it reaches a certain price threshold or to close a short position; not all securities or trading sessions (pre- and post-market) are eligible for stop orders
vestingthis refers to when the participant has earned the right of ownership and the options or restricted stock becomes available to sell; vesting occurs after your company-designated time frame is met (also known as a vesting schedule)
vesting schedulethe schedule of when, and to what extent, awards become available based on periods of time (options and restricted stock)

https://www.fidelity.com/glossary/stock-plan-services-glossary

  • Last traded price (LTP)

  • Pre opening market session: 9 to 9:15

  • 9 to 9:07am placing orders

  • 9:07am to 9:11am matching

  • 9:11am to 9:15am stabilization

  • 4:00pm to 9:15am After market order (AMO approved next 9:15am)

  • Green up triangle is Gap up Opening I.e opening higher than previous price. Red down triangle is Gap down opening. Opening lower than previous price.

  • Unch= unchanged I.e. Opening same as previous price.

  • Bid price= buy price eg. Number of people wanting to buy the share at this price.

  • Offer price= sell price. Numerous of people wanting to sell the share at this price.

  • Bonus: eg 1:2 I.e one share bonus for each 2 share held.

  • We must buy 1 day before the ex bonus date to be entitled of bonus.

  • Announcement date; bonus declared date.

  • Record date: date on which shared should be on your demat account.

  • Ex bonus date: date on which share start trading on the revised price.

Types of investor​

  • RII: Retail individuals investor. Eg who invest in IPO for below Rs 2 lacs
  • HNI: high net worth individuals. Eg. Above 2 lacs

HNI CATEGORY IN IPO | HOW IS GREY MARKET PREMIUM CALCULATED IN IPO? | LIVE EXAMPLE |

  • DII: domestic institutional investor. Eg. Bank, lic. Mutual funds etc
  • FII/FPI: Foreign institutional investors/ foreign portfolio investors. Eg. Foreign investment
  • T+2 day: trade date + two days. After to says money in account or share in account

Clearing house​

  • NSCCL : National Security clearing corporation ltd. For NSE
  • ICCL: Indian clearing corporation limited. For BSE
  • XMSEI: Metropolitan Clear.

Depositories and DPs​

  • Depositories: they convert the physical share to dematerialize share. Eg NSDL and CDSL
  • DP: depository participants: they are the broker.
  • Flow: my account link to broker account link to depository.

Stock Market Crash​

How should an investor deal with the possibility of a stock market crash?" - Three available options for a portfolio of high-quality companies

  1. Preemptive timing: Sit on cash in anticipation of a stock market crash, and deploy the cash at the bottom of the stock market crash.

  2. Ride the tide: Stay fully invested at all times since we can't time the markets, and do nothing during the stock market crash.

  3. Post-facto rebalancing: Stay fully invested at all times, and rebalance the portfolio for position sizing dislocations caused by the differential in drawdowns across our portfolio constituents during the stock market crash.

Stocks​

  • EQ: It stands for Equity. In this series intraday trading is possible in addition to delivery.
  • BE: It stands for Book Entry. Shares falling in the Trade-to-Trade or T-segment are traded in this series and no intraday is allowed. This means trades can only be settled by accepting or giving the delivery of shares.
  • BL: This series is for facilitating block deals.Block deal is a trade, with a minimum quantity of 5 lakh shares or minimum value of Rs. 5 crore, executed through a single transaction, on the special "Block Deal window". The window is opened for only 35 minutes in the morning from 9:15 to 9:50AM.
  • BT: This series provides an exit route to small investors having shares in the physical form with a cap of maximum 500 shares.
  • BZ: Stocks that are blacklisted for violation of exchange rules. This series stocks falls under Trade-to-Trade category and hence BTST (Buy Today Sell Tomorrow) and intraday is not allowed in such stocks.
  • GC: This series allows Government Securities and Treasury Bills to be traded under this category.
  • IL: This series allows only FIIs to trade among themselves. Permissible only in those securities where maximum permissible limit for FIIs is not breached.

New Fund Offer (NFO)​

A New Fund Offer (NFO) refers to the introductory offer of a scheme by an asset management company. A New fund offer is raised when a fund is launched, which helps the firm raise capital for purchasing securities. An investor can subscribe to an NFO only within a limited time period; hence, NFOs are functional on first-come-first serve basis.

Types of NFO​

  • Open-ended funds: This fund is officially launched after the NFO ends. Investors can enter and exit the fund at any time after the launch.
  • Close-ended funds: A close-ended fund does not allow the entry and/or exit of investors after the NFO period, until its maturity. This time period is typically 3-4 years from the launch date. However, the investors may buy and sell the units of such a fund on the stock market in theory, but the liquidity of such funds on the market tends to be low.

https://www.paisabazaar.com/mutual-funds/all-about-nfo

SAFE Note - Simple Aggrement for Future Equity​

SAFE (simple agreement for future equity) notes are a simpler alternative to convertible notes. They were created in 2013 by Y Combinator, a Silicon Valley accelerator, and allow startups to structure seed investments without interest rates or maturity dates. SAFEs are short five-page documents. The valuation caps are the only negotiable detail.

A SAFE note is a convertible security that, like an option or warrant, allows the investor to buy shares in a future priced round. It addresses many of the drawbacks and challenges posed by convertible notes and can be an equitable option for investors and founders. Startups may prefer SAFE notes because, unlike convertible notes, they are not debt and therefore do not accrue interest.

https://www.upcounsel.com/safe-notes

Term sheet​

  • A term sheet is a nonbinding agreement outlining the basic terms and conditions under which an investment will be made.
  • Term sheets are most often associated with startups. Entrepreneurs find that this document is crucial to attracting investors, such as venture capitalists (VC) with capital to fund enterprises.
  • The company valuation, investment amount, percentage stake, voting rights, liquidation preference, anti-dilutive provisions, and investor commitment are some items that should be spelled out in the term sheet.

https://www.investopedia.com/terms/t/termsheet.asp