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Share market terminology

  1. Basics of Stock Market
    1. Invest:3 benefits of investing for your future
    2. Types of Investment Diversification asset classes
    3. What is the share market? What Does It Do and How Does It Work with examples
    4. SEBI What is Securities and Exchange Board of India
    5. Stock Broker Financial Intermediaries or Market Intermediaries role in share market
    6. Depository and types of Depository Participants in India
    7. ICCL, NSE Clearing Limited and Bank’s role as Financial intermediary
    8. Angel Investors What are their roles with examples
    9. Venture Capitalist Who Are They and What Do They Do
    10. CAPEX Understanding Capital Expenditure with examples
    11. Private Equity Explained Understanding PE With Examples
    12. Initial Public Offering (IPO): What It Is and How It Works
    13. Launch IPO Why Do Companies Go Public
    14. IPO process how Initial Public Offering works in India
    15. What is IPO Key Terms Related to Initial Public Offering
    16. What is the share market?
    17. Share price understanding how does prices increase or decrease with examples
    18. Share trading: How Does It Work? with examples
    19. Types of traders in share market
    20. Market Index How Indexing Works, Types, and Examples in share market
    21. Share market indices importance and key terms
    22. Index construction methodology
    23. Share market terminology
    24. Share market terminology for beginners
    25. How to Trade Shares for Beginners
    26. Clearing and settlement process in the Indian Share market
    27. Stock selling learn What happens when you sell a stock
    28. Corporate actions in share market and impact on prices
    29. Bonus Issue of Shares Explained and How They Work
    30. Stock Split and Buyback of Shares What you need to know
    31. Monetary Policy by RBI Repo Rate, reverse repo rate, Cash reserve
    32. Inflation and IIP explained with examples
    33. Purchasing Managers Index, Budget, Corporate Earnings Announcement and Non-Financial events
    34. Stock market basics for beginners
    35. Offer for Sale and Follow-on Public Offer explained with examples
    36. Rights Issue and its relevance to shareholders explained with examples
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Marketopedia / Basics of Stock Market / Share market terminology

This chapter is designed to give you an introduction to some of the more frequently used market terms and their meanings.

Let’s begin!

  1. Bull Market (Bullish)

If you anticipate that stock prices will rise, you are expressing a bullish sentiment on the market. Generally speaking, if the share market index increases during any given period, it is known as a bull market. For instance, the market saw positive growth from mid-2020 to early 2022.

  1. Bear Market (Bearish)

A bear market implies that stock prices are downward trending. From a bigger picture, if the share market index diminishes over a period of time, it is known as a bear market. For example, we saw this between 2008 and 2009.

  1. Trend

A trend typically refers to the market’s general direction and momentum. A bearish market indicates that it is falling rapidly, while flat trading implies a sideways trend.

  1. Face value of a stock or (FV) 

The face value of a stock is a nominal amount which is essential when it comes to corporate action. This topic will be explored in another chapter. When dividend, stock splits or bonuses are declared, they usually take into consideration the FV. 

  1. 52-week high/low 

The 52-week high and low provide a valuable metric for investors, illustrating the range in which the stock has traded during the past year. If a share price reaches its yearly peak, this may be perceived as a bullish prediction for what lies ahead, while hitting the yearly low could be construed as bearish. Both indicate to some extent whether an upswing or downtick may be expected in the foreseeable future.

  1. All-time high/low

All-time high and low is a concept similar to 52 weeks high and low. Rather than considering only the last year of trading, the all-time highs are the highest prices the stock has ever reached since its listing, while the all-time lows are the lowest it has ever traded in the same period.

  1. Upper and Lower Circuit 

The exchange implements price bands to control volatility within a single trading day. The upper circuit limit signifies the highest stock value, while the lower circuit denotes the lowest. These restrictions are based on criteria set forth by the exchange, adapting per derivatives and index. Such an approach enables them to regulate potential market reactions stemming from corporate news.

  1. Long Position 

Taking a long position refers to the direction of your trade. For instance, if you have bought or intend to buy Biocon shares, you are betting on an increase in their value. Similarly, when you have purchased the Nifty Index with expectations that it will go up, this indicates a bullish outlook on the index.

  1. Short position

Going short, or ‘shorting’, is a term used to describe an order of transaction. To help demystify this concept, I’d like to recount a situation that occurred at the office in approximately mid-2014.

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