The Quantitative Lexicon

The lowest price a seller is willing to accept for a security. Also called the offer price.

A prolonged period of falling stock prices, typically defined as a 20%+ fall from recent highs.

The highest price a buyer is willing to pay for a security.

The difference between ask and bid price. A measure of liquidity — tighter spread = more liquid.

Shares of large, well-established, sound companies with a long track record (e.g., Reliance, TCS, HDFC Bank).

A person or firm that executes buy/sell orders on behalf of investors in exchange for a commission.

Bombay Stock Exchange — Asia's oldest stock exchange, operator of the SENSEX index.

A prolonged period of rising stock prices, typically defined as a 20%+ rise from recent lows.

Compound Annual Growth Rate — the rate at which an investment grows, assuming compounding. Formula: (End/Start)^(1/years) − 1.

A contract giving the buyer the right (not obligation) to buy an asset at a set strike price before expiry.

A regulatory mechanism that temporarily halts trading when prices move beyond preset limits (±5%, ±10%, ±20%).

Buying shares and taking delivery into your demat account. Shares can be held for any duration.

Dematerialised account that holds shares in electronic form. Mandatory for trading on Indian exchanges.

Financial contracts whose value is derived from an underlying asset (stocks, indices, commodities). Examples: Futures, Options.

Domestic Institutional Investors — Indian entities like mutual funds, LIC, and pension funds that invest in the market.

A portion of company profits distributed to shareholders, usually as cash per share or bonus shares.

Earnings Per Share — net profit divided by the number of outstanding shares. Higher EPS = more profitable per share.

Futures & Options — derivative instruments traded on Indian exchanges. Used for speculation, hedging, and leverage.

The original value of a share as stated in the company's charter, typically ₹1 or ₹10. Different from market price.

Foreign Institutional Investors — overseas entities (funds, banks) investing in Indian markets. Their flows impact prices significantly.

A contract to buy/sell an asset at a predetermined price on a specific future date. Both parties are obligated.

The percentage reduction applied to an asset's market value to determine its collateral value for margin purposes.

Buying and selling shares within the same trading day. Positions must be closed before market close (3:30 PM IST).

Initial Public Offering — when a company sells its shares to the public for the first time on a stock exchange.

An order to buy or sell a security at a specific price or better. Executes only if the market reaches that price.

The minimum price a stock can fall to in a single trading day before trading is paused. Triggered by strong selling.

Last Traded Price — the price at which the most recent transaction for a security occurred.

Funds deposited with a broker as collateral to take leveraged positions. SEBI mandates SPAN + Exposure margin for F&O.

Market Capitalisation — total market value of a company's outstanding shares. Price × Total shares.

An order to buy or sell a security immediately at the best available current price.

A pool of money from many investors managed by a fund manager to invest in stocks, bonds, or other assets.

Net Asset Value — the per-unit value of a mutual fund. Calculated daily as (Total assets − Liabilities) / Total units.

The benchmark index of NSE comprising 50 large-cap Indian stocks across sectors.

National Stock Exchange — India's largest stock exchange by trading volume, operator of NIFTY indices.

Total number of outstanding derivative contracts not yet settled. Rising OI = increasing participation.

Price-to-Book ratio — share price divided by book value per share. Useful for valuing asset-heavy companies.

Price-to-Earnings ratio — share price divided by EPS. Indicates how much investors pay per rupee of earnings.

A collection of financial investments like stocks, bonds, mutual funds, and other assets held by an investor.

A contract giving the buyer the right (not obligation) to sell an asset at a set price before expiry.

A significant rise in the price of a security or the overall market within a short period.

A price level at which a stock repeatedly struggles to rise above. Sellers tend to outnumber buyers at resistance.

Securities and Exchange Board of India — the market regulator that oversees and governs Indian securities markets.

BSE Sensitive Index — benchmark index of the Bombay Stock Exchange comprising 30 major Indian stocks.

Selling shares you don't own (borrowed), hoping to buy them back cheaper later. Profits if price falls.

Systematic Investment Plan — investing a fixed amount in a mutual fund at regular intervals. Averages out purchase cost.

Stop Loss Order — triggers a sell (or buy) when the price reaches a specified level, to limit losses.

A price level at which a stock repeatedly finds buying interest and stops falling. Buyers step in at support.

The unique abbreviation used to identify a publicly traded company on an exchange. E.g., RELIANCE, INFY, TCS.

The maximum price a stock can reach in a single trading day before trading is paused. Triggered by strong buying.

A measure of how much a security's price fluctuates. High volatility = larger, faster price swings.

Total number of shares traded in a security during a given period. High volume = strong conviction in price moves.

Income generated by an investment as a percentage of its cost or current value. Dividend yield = Dividend / Price.