Words most used in the stock market.
In this article we will be explained the meaning of those words which are used continuously by the people of the stock market. If you are new to the share market, then you will hear these few words mostly. Top Stock Trading Terms Every Trader Needs to Know (Stock Market Terminology). Therefore those words and their description are given below.
Top 10 Stock Trading Terms Every Trader Must Know.
CNC(cash and Carry)
You can hold the shares you buy for a long time in a cash and carry order. You can sell them after 1 year and even after a few years. Or you can sell them whenever you want. This is called CNC or Cash and Carry. In CNC order you are not obliged to sell the shares on the same day
Intraday Trading (Same Day Trading)
Intraday trading means buying and selling of shares bought and sold for 1 day only. If you have to sell and if you have sold then you have to buy in intraday trading, that is, you have to buy and sell shares on the same day. You cannot put those shares on hold. If you haven't squared before the market close, the computer will automatically order a square. In intraday trading, your broker also provides leverage so that you can buy shares up to several times (5-10) of your capital. Let us also tell you that in intraday trading you have to pay more brokerage.
Trend
The direction of the market and therefore the strength of that direction is named the trend or market trend. for instance , if the market goes down fast, it's said that there's a declining trend within the market or if the market isn't rising or down, then it's called "sideways" or directionless trend.
Upper Circuit / Lower circuit
Stock exchanges fix a price limit for each stock. In a trading day, the value of the stock is not allowed to trade above that limit, neither up nor down. The upper price limit is named the upper circuit and the lower cost limit is named the lower circuit. Circuits' stock limits are often anything from 5%, 15%, 20% and conform to their own rules and judgment. Exchange circuits are used to control extreme volatility within the stock so that no news is subject to a sharp drop or rise within the stock. By upper circuit and lower circuit, excessive volatility in any stock is avoided. It is necessary that before buying or selling any stock, you should check the upper circuit and lower circuit of that stock.
Stock Market Index
A stock index is an indicator of a stock market designed as a statistical measure of the performance of the entire market or a segment of the market based on a sample of securities taken from the market. An index is a means of evaluating the overall performance of a market or a single segment of the market (eg: IT, Auto sector, Finance sector). An index is a measure to understand the ups and downs or trends of the overall market. It is only by looking at the index that you know whether the market trend is positive or negative.
There are mainly two stock exchanges in India(BSE & NSE):
(1). Bombay Stock Exchange (BSE)
(2). National Stock Exchange (NSE)
Learn About Stock Market Index
52 week high / 52 week Low
52 Week High means what is the highest price of a particular stock in the last 52 weeks. Similarly, 52 week low means what is the lowest price of a particular stock in last 52 weeks. The 52 week high or low indicates the stock price range. When a stock is near its 52 week high, many people believe that there is going to be a big jump in the stock, similarly when the stock is near its 52 week low, it is believed that That stock could be in recession.
All time high / low
The all-time high and all-time low also represent a stock's price similar to its 52-week high or low, with the only difference being that the stock's all-time high or low is the market's highest price or lowest since it was listed on the list. Shows price. Knowing the all time high and all time low price of any stock, you can take a better decision to buy that stock.
Face value of a share
The fixed price of a share is called face value or "cross value". This is decided by the company and it is important for their corporate decisions, such as when the dividend is given or when the stock is split, the company bases the face value of the shares.
Market Cap
Market capitalization is simply called market cap. Market capitalization is actually the total value of any company. From the market cap we can understand how big or how small that company is in terms of share capital.
Many times people start linking the price of the share with the price. In fact both are completely different from each other. The share price is actually of little consequence. Even if the share price of any company is low, it can be a company of high market capitalization, similarly a company with high share price can have a low market cap.
Long Position & Short Position
Long Position : Having a long position tells the direction of your trade. For example, if you have bought or are about to buy shares of XYZ Company, then you are long on XYZ Company. If you have bought stock of a company with the expectation that it will go up, then your position is a long position. If you have taken a long position on a stock or index, then you will be considered a bullish trader or bullish, similarly we understand short positions.
Short Position : "Shorting" or "short position" refers to a trade or deal in which you sell before buying. In a short position, you are in a way borrowing shares of a company and later, when you buy, repay that loan. The exchange allows you to sell shares on credit and later repay the shares by buying shares.
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