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25 May 2018

SHARE MARKET--What are the most useful tms in the stock market?/Read and study

Many young enthusiasts who want to enter stock market but do not possess the basic knowledge of the markets and the common terminologies used in the market . before entering the market it is very essential that we should know the basic terms used in the stock market which would make our trading much more easier .
Source google:

What is Stock Exchange: An organisation constituted for the purpose of assisting and carrying out buying, selling or otherwise dealing in securities . it is also known as Secondary Market.
What are securitiesFinancial instruments , including instruments such as shares, bonds, debentures of a company or body corporate or a government Thus, a stock exchange provides a trading platform ,where buyers and sellers can meet to transact in securities.
In India the regulatory body for stock exchange is SEBI i.e, Securities and Exchange Board of India.
NSENational Stock Exchange is the index of the top 50 stocks from 23 different industries listed in NSE ,it can be used to understand the movement of NSE
BSE: Bombay Stock Exchange sensex is an index of BSE, sensex is the average of the movement of the top 30 companies listed in the BSE. The word sensex is derived from two words , Sensitive Index . To know the performance of BSE sensex is used.

Bullish Market: When the market is uptrend and the prices are expected to rally, then it is called as “Bullish Market”.
Bearish Market: When the market is in downtrend and the prices are expected to fall, then it is called as “Bearish Market”.
IndexThe stock index or stock market index is the measurement of the value of the section of the market. Generally it is commuted with the help of a definite sample size,for nifty it is the average of 50 stocks and for sensex it is the average of 30 stocks.. This index is used by many traders to buy and sell stocks and also predict the direction of the market.
·         IPOAn Initial Public Offering or Stock market launch is a type of public offering where shares of stock in a company sold to the general public, on a securities exchange (like NSE,BSE) for the first time.
·         Primary MarketThe new shares (IPO) are issued in primary market . once issued they are listed in secondary market . it is not possible to trade in primary market . After listing in secondary market the trading takes place on those shares
·         Secondary Market: Secondary market is nothing but share market ,buying and selling of shares in secondary market means buying and selling of shares in stock market.
·         Day Trading or IntradayIntraday trading means the buying and selling of stocks happens in one single day.
·         Delivery TradingDelivery trading is a type of trading where the trader or investor holds the share beyond one day.
·         Demat AccountIn India, shares and securities are held electronically in a dematerialized account, instead of the investor taking physical possession of certificates . A demat account is opened by the investor while registering with an investment broker ,share holder will have a demat account for the purpose of transacting shares.
·         Dematerializing a security means converting it from physical form to electronic form
·         NSDL(National securities depository limited) CSDL (Central depository services limited ) in India there are two depositories which take care of securities dematerialization.
·         Equity Stocks: It generally refers to buying and holding of shares of a company on a stock market by individuals /firms in anticipation of income from dividends and capital gains ,as the value of the stock rises
·         Face valueIt is also known as par value of the stock . face value of share is generally Rs 10
·         Dividend: is payment made by a corporation to its shareholders, usually as a distribution of profits . when a corporation earns a profit or surplus, it can either re invest it in the business (called retained earnings) or it can distribute it to share holders.
·         EPS ( Earning Per Share) : It is the rupee value of earnings per outstanding share of a company’s equity stock
·         EPS (Net income formula )= profits -dividends /No.of outstanding shares
·         P/E Ratio: or price to earnings ratio,is an equity valuation multiple . it is defined as market price per share dividend by annual earnings per share
·         Share holdersIndividuals who buy (in other words invest in) shares of a company are the owners of the company and are referred to as share holders . shares holders usually having voting rights and can participate in management of the company.
·         BondIt is debt security, under which the issuer owes the holders a debt and , depending on the terms of the bond, is obliged to pay them interest . bonds are issued by public authorities , credit institutions , companies and supranational institutions in the primary markets
·         DebentureA debenture is a document that either creates a debt or acknowledge it , and it is debt without collateral .
·         VolumeVolume is nothing but quantity of shares
·         Bid: The buying price is called as Bid Price
·         OfferThe selling price is called as offer price
·         Bid quantityThe total number of shares available for buying is called as Bid quantity
·         Offer quantityThe total number of share available for selling is called as Offer quantity
·         Short sellingFirst selling and then buying (this only happens in day trading) is called as short sell or shorting of sell
·         Transactionone complete cycle of buying and selling of shares is considered as one transaction
·         Squaring offThis term is used to complete one transaction , means if you buy then have to sell (means square off) and if you short sell then you have to buy(means square off)
·         Limit order: In limit order, the buying and selling price has to be mentioned and when the share price comes to that price then the order will get executed with the price mentioned by the trader
·         Market orderwhen you put buy or sell price at market rate then the price get executes at the current rate of market. The market order get immediately executed at the current available price.
·         Stop Loss orderAs the name indicates the stop loss are used to stop or limit the losses in the share market
·         Margin tradingMargin amount is the amount given by the broker for day trading, the transaction done using margin amount is called as margin trading
·         Technical Analysis : The stock price prediction based on charts and indicators is called as technical analysis . technical analysis is irrespective of company’s fundamentals . Technical analysis is used for short term, mid term and also for long term
·         Fundamental AnalysisThe stock price prediction based on company’s growth /fundamentals. The long term investment is done based on fundamental analysis
·         Mini Nifty The NSE introduced mini nifty comprising of 20 companies , small traders basically make use of mini nifty in future derivative trading
·         Bank NiftyBank nifty is the barometer used to measure the banking index, bank nifty consist of 12 top banks
·         Option Option is a financial product whose price is based on its underlying instrument ,can be index, (Nifty, Jr.Nifty ,Bank Nifty etc)stock , currency etc.,
·         Call Option: Call Option is bought when the underlying (Nifty, Jr, Nifty and bank Nifty, or stock) is expected to go up. it is also possible to sell the call option
·         Put Option:Put Option is bought when the underlying (Nifty, Jr, Nifty , Bank Nifty etc or stock) is expected to go down. it is also possible to sell the put option

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