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Securities Lending & Borrowing (SLB)

Financial Glossary

Equity

Derivatives

Commodities

Initial Public Offering

Mutual Fund

Fixed Deposit

Bonds

Depository

NRI Services

Who is a NRI?

A Non Resident India (NRI) is a citizen of India who holds an Indian passport and has temporarily emigrated to another country for six months or more for employment, residence, education or any other purpose.

Who is a PIO?

A person of Indian origin (PIO) is a person of Indian origin or ancestry who was or whose ancestors were born in India or nations with Indian ancestry but is not a citizen of India and is the citizen of another country. A PIO might have been a citizen of India and subsequently taken the citizenship of another country.

Can NRI/PIO purchase Shares of Stock Market?

Yes, they can invest in shares of Indian Company through Stock Market under the Portfolio Investment Scheme.

Can NRI open multiple accounts in different banks?

Yes there is no restriction in opening accounts in different banks simultaneously.

What transactions can NRI make?

NRIs can only make delivery transactions, intraday trading and short selling is not allowed as per RBI norms.

What are the types of Bank Accounts available to NRIs?

The types of Bank Accounts available to NRIs are:

Non-Resident External (NRE)
Non-Resident Ordinary (NRO)
Foreign Currency Non-Resident (FCNR).

What is a NRE Account?

Non Resident External (NRE) account is a Rupee denominated account meant for NRIs which allows repatriation of funds. This means that the funds can be freely sent to any other country. NRE account can contain funds remitted from abroad, or obtained from another NRE / FCNR account maintained in India. The interest earned on deposits in an NRE account is exempt from tax in the hands of the NRI.

What is a NRO account?

Non Resident Ordinary (NRO) account is a Rupee denominated account which allows repatriation of upto 1 million USD. NRIs can repatriate up to USD 1 million, for bonafide purposes, per financial year from balances in NRO Accounts subject to payment of applicable taxes. The limit of USD 1 million per year includes sale proceeds of immovable properties held by NRIs/PIO (Person of Indian Origin) for a period of 10 years. In case a property is sold after being held for less than 10 years, remittance can be made if the sale proceeds have been held by the NRI/PIO for the balance period in eligible investments. The interest earned on deposits in an NRO account is taxable in the hands of the NRI as per the applicable income tax slab rates.

What is the difference between NRE & NRO account?

Particulars	NRE	NRO
People who can open this account?	NRIs	Any person residing outside India
Joint account permitted of 2 or more NRIs?	Yes	Yes
Joint account permitted with another person residing in India?	No	Yes
Joint account permitted with another person residing in India?	No	Yes
Currency in which the account is denominated	INR	INR
Is the principal repatriable?	Freely	Partly
Is the interest repatriable?	Freely	Freely
Risk- Foreign currency?	Account holder is exposed the fluctuations in the value of INR	Account holder is exposed the fluctuations in the value of INR to the extent of interest amount

Can money be transferred from NRE to NRO account?

Yes, money can be freely transferred from NRE account to NRO account.

Can money be transferred from NRO to NRE account?

No, money cannot be transferred from NRO to NRE account. Even if erroneously, money is transferred from NRE to NRO, it cannot be transferred back to NRE.

Does NRI need permission from RBI to open a demat account?

No permission is required from RBI to open a demat account. However, credits and debits from demat account may require general or specific permissions as the case may be, from designated banks.

Is capital gain tax applicable to NRIs?

For long term investment, i.e., shares that are held for more than 1 year from the date of purchase, there is no capital gain tax applicable if it’s sold after 1 year. However, if shares are sold within 1 year from the date of purchase, then the gains would be taxed.

Securities Lending & Borrowing (SLB)

Financial Glossary

Account disclosure(Depositor Account)	The closure of beneficiary and pool accounts by the investor and the clearing member or at the discretion of the participant, if the client has defaulted in its obligations towards the participant.
Accounts payable	A current liability showing the amounts due to others within a period of one year arising from purchase or manufacturing of inventories.
Accounts receivable	Any amount due to a business for merchandise or securities that it has sold or services it has rendered.
Accrued Interest	A measure of the return to a bondholder calculated as a ratio of the coupon to the market price.
Acid Test Ratio	The value of cash equivalents and accounts receivable (the quick assets) divided by current liabilities.
Active portfolio strategy	A strategy that uses available information and forecasting techniques to seek a better performance than a portfolio that is simply diversified broadly.
Adjusted Beta	The estimation of a security’s future beta, which is derived from historical date, but is modified assuming that the security’s real beta has tendency to move towards the market average of one.
Advance-Decline (A/D) Line	A technical analysis tool representing the total of differences between advances and declines of security prices.
Agency Orders	Orders that a broker dealer executes for the account of a customer with another professional or retail investor
Amortization	Amortization is an accounting term that refers to the process of allocating the cost of an intangible asset over a period of time.
American Option	An option that can be exercised any time prior to and including its maturity date.
Annual Report	A financial report issued by a company to its shareholders at the end of financial year.
Approved Intermediary	A person duly registered by the SEBI Board under the Securities Lending Scheme , 1997 through whom the lender of securities will deposit the securities and the borrower will borrow the securities.
Arbitrage	Arbitrage consists of purchasing a commodity or security in one market for immediate sale in another market.
Ask or Offer	Ask price is the lowest price a prospective seller is willing to accept.
Assets	It represents ?everything that the company owns and what owed to it. There are two major categories of assets: fixed assets and current assets
Asset Allocation	The process of determining the optimal division of an investor’s portfolio among different assets
Asset Allocation Fund	A mutual fund that splits its investment assets among stocks, bonds, and other vehicles in an attempt to provide a consistent return for the investor.
Asset-backed securities	Securities backed by assets that are not mortgage loans. It includes assets backed by automobiles loans, credit card receivables and others.
Assignment	The notification to the seller of an option by the clearing corporation that the buyer of the option is enforcing the terms of the option’s contract.
Asymmetric Information	A situation where access to information by one party (or parties) to a transaction is better than access by another party (or parties).
At Best	An instruction from the client to the broker authorizing him to use his discretion so as to execute an order at the best possible market price.
At-the-Money	Term used to describe an option or a warrant with an exercise price equal to the current market price.
Auditor	A person who is professionally qualified to examine and scrutinize accounts.
Auction	A mechanism used by the Stock Exchange to fulfill its obligation to the buyer of a security. It is done when the seller is unable to deliver the scrips sold by him. The security in question is offered by a member who has ready possession of the scrips.
Authorized Capital	The maximum equity capital a company can raise, which is mentioned in the Memorandum of Association and Articles of Association of the Company. However, share premium is excluded from the definition of authorized capital.
Average Annual Growth Rate – AAGR	The average increase in the value of a portfolio over the period of a year .
Averaging	The process of gradually buying more and more securities in a declining market (or selling in a rising market) in order to level out the purchase (or sale) price.

Back office	The part of a firm that is responsible for post-trade activities.
Bad debts	A debt that cannot be recovered.
Balance sheet	An accounting statement of a company’s assets and liabilities, provided for the benefit of shareholders and regulators.
Balanced fund	Funds which aim to provide both growth and regular income as such schemes invest both in equities and fixed income securities in the proportion indicated in their offer documents.
Bank reconciliation	A Bank reconciliation is a process that explains the difference between the amounts recorded in the cashbook and relevant bank statements.
Bankrupt	An individual is bankrupt when declared in law as unable to pay their debts.
Bankruptcy	Bankruptcy is a legal status of a person or other entity that cannot repay the debts it owes to creditors.
Basis	It is defined as the cash price (or spot price) of whatever is being traded minus its futures price for the contract in question.
BASIS RISK	The risk that the relationship between the prices of a security and the instrument used to hedge it will change, thereby reducing the effectiveness of the hedge.
Bear Hug	A variety of takeover strategy that seeks to hurry target company managements to recommend acceptance of a tender offer in a short period of time.
Bear market	A weak or falling market characterized by the dominance of sellers.
Bear spread	In options trading, a bear spread is a bearish, vertical spread options strategy that can be used when the options trader is moderately bearish on the underlying security.
Bear trap	A false signal indicating that the rising trend of a stock or index has reversed when in fact it has not.
Benchmark	Security used as the basis for interest rate calculations and for pricing other securities.
Beneficial Owner	The true owner of a security
Beta	A measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole.
Bid	An offer of a price to buy as in an auction
Bid and ask	The difference between the bid price and the ask price.
Block trading	Buying and selling a block of securities usually takes place when restructuring or liquidating a large portfolio.
Blue Chip Stocks	The best rated shares with the highest status as investment based on return, yield, safety, marketability and liquidity.
Bonds	These are debt securities issued by corporations and governments.
Bonus Share	A bonus share is a free share of stock given to current shareholders in a company, based upon the number of shares that the shareholder already owns
Bookkeeping	The process of keeping records of the financial affairs of a business.
Book Closure	The time period when a company will not handle adjustments to the register, or requests to transfer shares.
Book value	The net amount shown in the books or in the accounts for any asset, liability or owners’ equity item.
Boom	A condition of the market denoting increased activity with rising prices and higher volume of business resulting from greater demand of securities.
Box Spread	A dual option position involving a bull and bear spread with identical expiry dates. This investment strategy provides for minimal risk.
Breadth of Market	The number of securities listed on the market in which there is regular trading.
Break-even point	Break-even (or break even) is the point of balance between making either a profit or a loss.
Breakout	A situation where the price either goes above the resistance level or below the support level.
Broker or Brokerage Firm	A member of a Stock Exchange who acts as an agent for clients and buys and sells shares on their behalf in the market.
Brokerage	Commission payable to the stockbroker for arranging sale or purchase of securities.
Bubble	A speculative sharp rise in share prices which like the bubble is expected to suddenly burst.
Budget	An estimation of the revenue and expenses over a specified future period of time.
Bull Market	A market in which share prices are rising, encouraging buying.
Bull spread	In options trading, a bull spread is a bullish, vertical spread options strategy that is designed to profit from a moderate rise in the price of the underlying security.
Buoyancy	A rising trend in prices.
Butterfly spread	An option strategy involving the simultaneous sale of an at the money straddle and purchase of an out of the money strangle.
Buying on margin	To buy shares with money borrowed from the stockbroker, who maintains a margin account for the customer.

Calendar spread	The simultaneous sale and purchase of either calls or puts with the same strike price but different expiration months.
Call Option	An agreement that gives an investor the right, but not the obligation, to buy an instrument at a known price by a specified date.
Capital	A measure of the value of all of the assets of worth owned.
Capital cost	Capital costs are fixed, one-time expenses incurred on the purchase of land, buildings, construction, and equipment used in the production of goods or in the rendering of services.
Capital gain	A profit from the sale of property or an investment.
Capital growth	An increase in the market price of an asset. also called capital appreciation.
Carry Forward	Settlement where positions are carried forward from one settlement to another settlement.
Cash flow	The total amount of money being transferred into and out of a business, especially as affecting liquidity.
Cash settlement	The settlement provision on some options and futures contracts that do not require delivery of the underlying.
Certificate of deposit	A negotiable certificate issued by a bank, usually for a period of one month to a year, as evidence of an interest bearing time deposit.
Circuit Breaker	A system to curb excessive speculation in the stock market, applied by the Stock Exchange authorities, when the index spurts or plunges by more than a specified per cent.
Clearing House	A department of an exchange or a separate legal entity that provides a range of services related to the clearance and settlement of trades and the management of risks associated with the resulting contracts.
Close ended Fund	A type of investment company that has a fixed number of shares which are publicly traded.
Closing price	The rate at which the last transaction in a security is struck before the close of the trading hours
Common Stock	Units of ownership of a public corporation. Holders of common stock typically have voting rights and receive dividends, but there is no guarantee of dividend payment.
Condor	A condor is an options strategy that also has a bear and a bull spread, except that the strike prices on the short call and short put are different.
Contract Note	A note issued by a broker to his constituent setting out the number of securities bought or sold in the market along with the rate, time and date of contract.
Convertible Bond	A bond giving the investor the option to convert the bond into equity at a fixed conversion price or as per a pre-determined pricing formula.
Coupon Rate	The interest rate stated on the face of coupon.
Credit	A contractual agreement in which a borrower receives something of value now and agrees to repay the lender at some date in the future
Creditor	An entity (person or institution) that extends credit by giving another entity permission to borrow money if it is paid back at a later date
Credit limit	Credit limit also refers to the maximum amount a credit card company will allow someone to borrow on a single card.
Credit rating	Credit ratings measure a borrower’s creditworthiness and provide an international framework for comparing the credit quality of issuers and rated debt securities.
Credit history	A record of a consumer’s ability to repay debts and demonstrated responsibility in repaying debts.
Cross-Hedging	Practice of altering the risk characteristic of a predetermined position in one cash good by taking out a position in a future or forward contract which is based on a good which differs significantly from that of the initial cash position.
Current asset	Cash or an item of value expected to be converted into cash within one year or one operating cycle, whichever is longer.
Current liability	Accounting term for money payable within the current accounting year, on account of trade creditors, taxation, dividends, etc.
Current Yield	A measure of the return to a bondholder calculated as a ratio of the coupon to the market price.

Daily margin	The amount that has to be deposited at the Stock Exchange on a daily basis for the purchase or sale of a security.
Daily Price Range	The maximum price movement (upward and downward) allowed for a stock in one trading session compared to the previous day’s settlement price.
Day Order	An order that is placed for execution if possible, during only one trading session. If the order cannot be executed that day it is automatically cancelled.
Debenture	Bonds issued by a company bearing a fixed rate of interest usually payable half yearly on specific dates and principal amount repayable on a particular date on redemption of the debentures.
Debtor	A company or individual who owes money.
Default	A failure to fulfill an obligation to repay a loan.
Delta	The ratio of the change in price of an option to the change in price of the underlying asset.
Depository participant	An agent of the depository through which it interfaces with the investor
Depreciation	A fall in value of a security or security index or a currency in terms of others or its purchasing power.
Derivative	A contract which derives its value from the prices, or index or prices, of underlying securities
Discount	When a security is quoted at a price below its nominal or face value, it is said to be at a discount.
Diversification	Spreading the risk by constructing a portfolio that contains many different investments whose returns are relatively uncorrelated.
Dividend	Payment made to shareholders, usually once or twice a year out of a company’s profit after tax.
Dividend Reinvestment	Investing dividend in the scheme itself. Hence instead of receiving dividend, the unit holders receive units.
Dividend Yield	Dividend expressed as a percentage of a current share price.
Downside risk	An estimate of the amount of loss the holder of a security might suffer if there is a fall in its value.

Electronic fund transfer (EFT)	System which utilizes computer and electronic components in order to transfer money or financial assets.
Earnings per Share (EPS)	The portion of a company’s profit allocated to each outstanding share of common stock.
EBIT	EBIT or operating income is the earnings before interest and taxes
EBITDA	EBITDA is the earnings before interest, taxes, depreciation and amortization.
Encumbered asset	Asset owned by one party but subject to the legal claims of another party.
Equity	The ownership interest in a company of holders of its common and preferred stock.
European option	A put or call that can be exercised only on its expiration date.
Exchange-Traded Fund (ETF)	A security that tracks an index but has the flexibility of trading like a stock.
Ex-Dividend date	The date on or after which the buyer of a security is not entitled to the dividend already declared.
Exercise	To put into effect the right (i.e. buy or sell) specified in a contract.
Expected return	The return an investor might expect on an investment if the same investment were made many times
Expiration Date	The last date on which the holder of the option may exercise it according to its terms

Face Value	The value that appears on the face of the scrip, same as nominal or par value of share/debentures.
Financial statement	A formal record of the financial activities of a business, person, or other entity.
Fixed asset	An item of value used in current operation that would normally be of use for more than one year.
Fixed cost	Fixed costs are expenses that have to be paid by a company, independent of any business activity.
Fixed Income Security	A fixed income security is an investment that pays regular income in the form of a coupon payment, interest payment or preferred dividend.
Fixed interest rate	Interest rate of a loan remains the same for the term of the loan.
Float	The number of shares available for trading of a particular stock
Floor price	The minimum offer price below which bids cannot be entered.
Foreign Institutional Investor (FII)	An institution established or incorporated outside India which proposes to make investment in India in securities.
Free cash flow	Calculated by adding depreciation to net income, and subtracting capital expenditures.
Fringe benefits	An extra benefit supplementing an employee’s money wage or salary, for example a company car, private health care, etc.
Funds of funds	Fund of funds scheme means a mutual fund scheme that invests primarily in other schemes of the same mutual fund or other mutual funds.
Futures Contract	An exchange traded contract generally calling for delivery of a specified amount of a particular financial instrument at a fixed date in the future.

Golden share	A share with special voting rights that give it peculiar power vis-a-vis other share
Government securities	Securities that are sold to the public by the government.
Gross	When used in connection with dividend or interest implies amount without any deduction of tax etc.
Gross spread	The difference (spread) between a security’s public offering price and the price paid to the issuer by an underwriter.
Growth funds	Unit trusts or Mutual Funds which invest with the objective of achieving mostly capital growth rather than income.
Growth investing	A strategy whereby an investor seeks out stocks with what they deem good growth potential.
Guaranteed Coupon (GTD)	Bonds issued by a subsidiary corporation and guaranteed as to principal and /or interest by the parent corporation.

Hedge	An asset, liability or financial commitment that protects against adverse changes in the value of or cash flows from another investment or liability.
Hedge fund	Private investment pools that invest aggressively in all types of markets, with managers of the fund receiving a percentage of the investment profits.
High-Yield Bond	A bond which pays a high yield because of higher risk of default.
Holding Company	A company that holds enough shares of another company to secure voting control.
Hot issue	A security that is expected to trade in the after market at a premium over the public offering price.
Hypothecation	Pledging assets against a loan.

Implied Volatility	The value of the price or rate volatility variable that would equate current option price and fair value.
IOC	An order to buy or sell a security that if not immediately filled, will be cancelled.
Indexed asset	An indexed asset has coupon and principal payments that are adjusted upward in response to increase in price level.
Inflation	A general increase in prices and fall in the purchasing value of money.
Initial public offering (IPO)	The first public issue by a public limited company.
Interest rate	The proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the loan outstanding.
In the money	A call option is said be in the money when it has a strike price below the current price.
Intrinsic Value	Intrinsic value refers to the value of a stock determined through fundamental analysis, by summing the discounted future income generated by the asset to obtain the present value.
Investment	Money committed or property acquired for future income.
ISIN	A unique identification number allotted for each security in the depository system by SEBI.
Issuer	An entity which is in the process of issuing its securities. Also known as the “Originator”.

Junk Bonds	High yield bond issued by low rated companies.
Jurisdiction	The official authority to make legal decisions and judgements.

Lagging indicators	Market indicators showing the general direction of the economy and confirming or denying the trend implied by the leading indicators or concurrent indicators.
Last Trading Day	The final day when trading may occur in a given futures or option contract month.
Leading indicators	Market indicators that signal the state of the economy for the coming months.
LEAP	A long-term put or call option (as long as three years).
Leveraged Buy Out	The purchase of shares usually by the management of a company using its own assets as collateral for loans provided by banks or insurance company.
Limit Order	An order to buy or sell a specified number of shares of a security when a specified price is reached.
Liquidation	The process of converting stocks into cash. Also means the dissolution of a company.
Lock-In trade	A securities transactions in which all the terms and conditions to the transactions are irrevocably accepted by the buyer and seller.
Long Position	A position showing a purchase or a greater number of purchases than sales in anticipation of a rise in prices.
LP (Liquidity premium)	Additional return required to compensate investors for purchasing illiquid assets.

Maintenance margin	The minimum margin that must be maintained on a futures contract.
Margin	An advance payment of a portion of the value of a stock transaction. The amount of credit a broker or lender extends to a customer for stock purchase.
Margin Call	A margin call is a brokerage firm’s demand that a margin-account client deposit securities or cash into their account in order to bring the account balance up to the minimum maintenance margin requirement.
Mark to Market	The process whereby the book value or collateral value of a security is adjusted to reflect current market value.
Market Capitalization	Market capitalization is the aggregate valuation of the company based on its current share price and the total number of outstanding stocks.
Maturity	The date on which a loan, bond, or debenture becomes due for payment.
Maturity Risk Premium (MRP)	Risk associated with interest rate uncertainty. The longer the time to maturity, the higher the premium.
Mid-Cap	Company with market capitalization between USD 2 billion and USD 7 billion.
Minimum Price Fluctuation	The minimum price change or tick on a futures contract.
Money Market	The market encompassing the trading and issuance of short-term non-equity debt instruments, including treasury bills, commercial paper, bankers’ acceptance, certificates of deposits etc.
Moving Average	The average of security or commodity prices over a period of few days or up to several years showing the trends up to the last interval.
Mutual Fund	Mutual Fund is a mechanism for pooling the resources by issuing units to the investors and investing funds in securities in accordance with objectives as disclosed in offer document.

Naked option	An option that is written without corresponding security or option position as protection in seller’s account.
National Securities Depository Limited (NSDL)	This is an organization, which is an intermediary between the Registrar and the company for dematerialisation of shares.
Net Asset Value (NAV)	The current market worth of a mutual fund’s share.
Net income	Net income is gross income less deductible income-related expenses.
Net profit margin	Ratio of operating profits to gross income (or revenue).
Net Worth	The difference between a company’s or individuals total assets and its total liabilities.
Netting	A system whereby outstanding financial contracts can be settled at a net figure, i.e. receivables are offset against payables to reduce the credit exposure to a counterparty and to minimize settlement risk.
Nominee	A person or firm into whose name securities or other properties are transferred in order to facilitate transactions, while leaving the customer as the actual owner.

Odd Lot	Anything less than the standard unit of trading.
Offer document	As per SEBI DIP guidelines, offer document means Prospectus in case of a public issue or offer for sale and Letter of Offer in case of a rights issue.
Offer price	Price at which units in trust can be bought. It often includes an entry fee.
Offset	Take a reverse position in option or forward with respect to the one taken in the initiation.
Open Interest	The number of contracts outstanding for a given option or futures contract.
Open Market Operation	Purchase or sale of government securities by the monetary authorities (RBI in India) to increase or decrease the domestic money supply.
Open Order	An order to buy and sell a security that remains in effect until it is either cancelled by the customer or executed.
Open-Ended Fund	Open-ended fund is a collective investment scheme which can issue and redeem shares at any time.
Operating Cash Flow	Operating cash flow is the cash that a company generates as a result of normal business operations.
Option	The contractual right, but not obligation, to buy (call option) or sell (put option) a specified amount of underlying security at a fixed price (strike price) before or at a designated future date.
Option Spread	A spread is a type of option position where you buy an option and sell an option and both of them are from the same option class.
Order book	It is an ‘electronic book’ that shows the demand for the shares of the company at various prices.
Out of the money	An option is described as being out of the money when the current price is below the strike price for call, and above strike price for put.
Over-the-Counter Market	A financial transaction that is not made on an organised exchange. Generally the parties must negotiate all the details of each transaction or agree to use simplifying market conventions.

P/E	The ratio of the market price of the share to earnings per share.
Paid Up capital	The amount of capital, both equity and preference, paid up by the shareholders against the capital subscribed to by them.
Paid-in capital	The difference between par or book-keeping, value of a security and the amount realized from the sale or distribution of those shares by the company.
Par Value	Means the face value of securities.
Partial Fill	An order that trades only part of its total committed volume.
Pay In/Pay out	The days on which the members of a Stock Exchange pay or receive the amounts due to them are called pay in or pay out days respectively.
Penny Stock	A common stock priced at less than Re. 1 a share.
Portfolio	A collection of securities owned by an individual or an institution (such as a mutual fund) that may include stocks, bonds and money market securities.
Portfolio Manager	Any person who pursuant to a contract or agreement with a client ,advises or directs or undertakes on behalf of the client (whether as discretionary portfolio manager or otherwise) the management or administration of a portfolio of securities or the funds of the client as the case may be.
Position limit	The maximum number of listed option contracts on a single security which can be held by an investor or group of investors acting jointly.
Preferred Stock	Owners of this kind of stock are entitled to a fixed dividend to be paid regularly before dividend can be paid on common stock .
Premium	If an investor buys a security for a price above its eventual value at maturity he has paid a premium for it.
Price Band	The range within which the price of a security or the index of a currency is permitted to move within a given period.
Price Rigging	An illegal action performed by a group of conspiring businesses that occurs when the firms agree to artificially inflate prices in an attempt to recognize higher profits at the expense of the consumer.
Primary Market	Market of new issues of securities.
Profit Margin	After tax earnings divided by sales.
Promissory note	A signed document containing a written promise to pay a stated sum to a specified person or the bearer at a specified date or on demand.
Put option	An option that gives its holder the right, but not obligation to sell a fixed number of securities at a specified price (the strike price) within a specified period of time.
Put call parity	The relationship between the price of a put and price of a call on the same underlying with the same expiration date, which prevents arbitrage opportunities.
Put/Call Ratio	The ratio represents a proportion between all the put options and all the call options purchased on any given day.

Rally	A rally is a period of sustained increases in the prices of stocks, bonds or indexes
Rate Of Return	The annual income from an investment expressed as a proportion (usually a percentage) of the original investment.
Real-Time Quotes	Real-time quote refers to a quote that is current as of when the quote was displayed.
Record Date	A date on which the records of a company are closed for the purpose of determining the stockholders to whom dividends, proxies rights etc., are to be sent.
Rematerialisation	The process of converting electronic holdings into physical securities through a Depository Participant.
Repo Rate	Repo rate is the rate at which the central bank of a country (RBI in case of India) lends money to commercial banks in the event of any shortfall of funds.
Resistance	A chart point or range that caps an increase in the level of a stock or index over a period of time
Return	Return is a profit on an investment. It comprises any change in value, and interest or dividends or other such cash flows which the investor receives from the investment.
Revenue	The amount of money a company earns through the sale of goods or services
Reverse repo	The purchase of securities with an agreement to resell them at a higher price at a specific future date
Revolving credit	A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed
Rights	A security that lets shareholders purchase additional shares directly from the issuer at a predetermined price.
Rights Issue	The issue of new securities to existing shareholders in a fixed ratio to those already held.
Risk management	The forecasting and evaluation of financial risks together with the identification of procedures to avoid or minimize their impact.
Rolling Agreement	The practice on many stock markets of settling a transaction a fixed number of days after the trade is AGREED.
Roll Over	The extension or transfer of a debt or other financial arrangement.
Ruling price	The current market price of a security.

Savings bank account	Saving accounts are accounts maintained by retail financial institutions that pay interest but cannot be used directly as money in the narrow sense of a medium of exchange (for example, by writing a cheque). These accounts let customers set aside a portion of their liquid assets while earning a monetary return.
Secondary market	The market for previously issued securities or financial instruments.
Settlement date	The date specified for delivery of securities between securities firms.
Short Selling	The sale of a security that is not owned by the seller, or that the seller has borrowed.
Special Trading Session	A session during which trading in a listed security is limited to the execution of transactions at a single price.
Speculator	Speculators are typically sophisticated, risk-taking investors with expertise in the market(s) in which they are trading and will usually use highly leveraged investments such as futures and options.
Spoofing	Placing a limit order at a better price than the current market price for purchase or sale of thinly traded scrips and then endeavouring to cancel the initial limit order in order to induce buy or sell.
Spot market	The spot market or cash market is a public financial market in which financial instruments or commodities are traded for immediate delivery.
Spread	The spread is the difference between bid and ask prices of a stock.
Stop Loss	An order to sell a security when it declines to a specified price.
Support Level	An area or price level where a price decline may be expected to be halted (or to slow) by an increase in demand.
Swaps	The sale of one security to purchase another with similar features.
Swaption	Options on interest rate swaps.

Tender Offer	An offer by a company to buy back its specified securities through a letter of offer from the holders of the specified securities of the company.
Tick	The minimum upward or downward movement in the price of a security. The term “tick” also refers to the change in the price of a security from trade to trade.
Time Value	The portion of an option’s premium that is attributable to the amount of time remaining until the expiration of the option contract.
Trade date	The trade date is when an order to purchase, sell or otherwise acquire a security is performed.
Treasury bills	A short term bearer discount security issued by governments as a means of financing their cash requirement.
Trustee	Legal custodian who looks after all the monies invested in a unit trust or mutual fund.
Trend	Either upward or downward movement in price, characterized by a series of higher lows and higher highs (uptrend) or lower highs and lower lows (downtrend).
Turnover	The total volume of all transactions executed in a given time period.

Under pricing	The pricing of an initial public offering (IPO) below its market value. of securities below their market value.
Underlying	The designated financial instrument which must be delivered in completion of an option or futures contract.
Underwriter	A financial organization that handles sales of new securities which a company or municipality wishes to sell in order to raise money.
Unlisted	A security that is not listed on a stock exchange.
Unsystematic risk	A risk that is unique to a company such as a strike, the outcome of unfavourable litigation, or a natural catastrophe.
Upside Volume	Upside Volume is the total volume of all advancing stocks over a given time period.
Uptick	A transaction in a stock market security above the price of the previous transaction.

Valuation	Valuation is the process of estimating what something is worth
Value added tax (vat)	A type of consumption tax that is placed on a product whenever value is added at a stage of production and at final sale.
Value Investing	The strategy of selecting stocks that trade for less than their intrinsic values.
Value Stocks	A stock that tends to trade at a lower price relative to it’s fundamentals (i.e. dividends, earnings, sales, etc.) and thus considered undervalued by avalue investor.
Venture capital	It is financial capital provided to early-stage, high-potential, growth startup companies.
Vertical equity	A method of collecting income tax in which the taxes paid increase with the amount of earned income.
Vertical Spread	In options trading, a vertical spread is an options strategy involving buying and selling of multiple options of the same underlying security, same expiration date, but at different strike prices.
Volatility	Volatility is a measure for variation of price of a financial instrument over time.
Volume	The number of shares or contracts traded in a security or an entire market during a given period of time.
Voting right	The entitlement of a shareholder to exercise vote in the general meeting of a company.

Warrant	An options contract often sold with another security.
Wolf	Speculators who make a kill in the market.
Working Capital	Working capital is obtained by subtracting current laibility from current asset.
Worst case scenario loss	The worst case loss of a portfolio would be calculated by valuing the portfolio under several scenarios of changes in the underlying prices and volatility.
Writer	Option writer has an obligation to buy or sell the asset (depending upon the type of option), in return of option premium.

Yield	The income return on an investment. This refers to the interest or dividends received from a security and is usually expressed annually as a percentage based on the investment’s cost, its current market value or its face value.
Yield Curve	It is a curve showing several yields or interest rates across different contract lengths (2 month, 2 year, 20 year, etc…) for a similar debt contract.
Yield to Maturity	The rate of return anticipated on a bond if it is held until the maturity date.

Zero Coupon Bond	A bond that pays no interest while the investor holds it. It is sold originally at a substantial discount, paying the investor its full face value when it comes due.
Zero rate	It refers to goods which are taxable but at a zero rate. The significance of this rating is that businesses selling such goods may claim back their input tax. A term relating to value added tax (VAT).

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Learning Center

Know Everything About the Market Before you Invest.

Know Everything About the Market Before you Invest.

What is Share?

What are the various types of shares available?

What are primary and secondary markets?

What are the popular stock exchanges in India?

Where can investors buy shares from?

What is the process of taxation charged on equity investing?

What is Bid and Ask Rate?

What is Market Order and Limit Order?

What is Stop Loss Order and Stop Buy Order?

What causes stock prices to change?

What is the right time to invest in Equity?

What is the Market timing for Equity?

What is a Derivative?

What are Futures and Options?

What is option premium?

What are Currency Derivatives?

How do exchange-traded currency futures enable hedging against currency risk?

What is Volatility Index?

What is the Expiration Day?

What is Margin?

How are the Contracts settled?

What are Commodities?

What are Commodity Futures?

Who Regulates Commodity Market?

What are the Major Commodity Exchanges?

What are the costs involved in trading in commodities?

Is physical delivery of commodities available?

Is Commodity Option available?

What is the Market timing for Commodity Futures?

What is an IPO?

What is FPO?

What are the types of IPO?

How do an Investor find out about new issues available?

What is IPO Grading?

How is the allotment of shares done?

What happens to those who don’t get any allotment?

Is it compulsory for investor to have a Demat Account?

What are the different types of Investor Categories?

How many days it usually takes to get an allotment of an IPO?

What is the role of SEBI in IPO process?

What is a Mutual Fund?

What are the types of Mutual Funds?

What are Open Ended and Close Ended Scheme?

What are the benefits of investing in a Mutual Fund?

What is the role of SEBI in Mutual Fund?

What is Net Asset Value (NAV)?

What is Systematic Investment Plan?

Does an Investor need a demat account to invest in MF?

Who are Fund Managers?

What is Fund of Funds Scheme?

Can a mutual fund change the nature of the scheme from the one specified in the offer document?

How will an investor come to know about the changes, if any, which may occur in the mutual fund?

How can an investor evaluate the performance of a mutual fund?

What are Tax-Saving Schemes?

What is a Company Fixed Deposit?

What are the types of Fixed Deposits Available?

Which companies can accept Deposit?

What is the limit up to which a company can accept deposit?

How is interest payment made in case of Company FDs?

When is TDS deducted on the interest from Company Fixed Deposits?

Who can buy a Fixed Deposit?

What are the FDs distributed by Eureka?

What are Bonds?

What are the types of Bonds available?

What are the benefits of investing in Bonds?

What are the risks involved in investing in Bonds?

What is the relationship between interest rate and maturity?

What are the bonds distributed by Eureka?

What is a Depository?

What is dematerialisation (demat)?

How many Depositories are registered with SEBI?

Who is a Depository Participant?

Who is a Beneficial Owner (BO)?

How an investor can avail the services of a Depository?

What are the benefits of availing depository services?

Whether it is compulsory for me to dematerialise my physical certificates?