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Stock market glossary
Short, plain-English definitions of the terms you will meet while learning about Indian markets. Definitions are general and educational; they are not advice. For official definitions see SEBI, NSE and BSE.
# A B C D E F G I L M N O P R S T V
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52-week high and low
The highest and lowest prices a stock traded at over the past 52 weeks (about one year). They show the range a price has covered, not where it will go next.
Related: Market capitalisation · Volatility
A
ASBA
Application Supported by Blocked Amount. When you apply for an IPO, the money stays in your own bank account but is blocked until shares are allotted; only then is the amount for allotted shares debited.
Learn more: How to apply for an IPO (UPI and ASBA)
Related: IPO · Basis of allotment
B
Basis of allotment
The finalised decision on how shares in an oversubscribed IPO are distributed among applicants. Allotment status is usually checked on the registrar's website after it is published.
Related: IPO · Subscription
Broker
A SEBI-registered intermediary that places orders on your behalf and charges brokerage and other fees. Compare charges on the broker's own website, as they change.
Learn more: Compare brokers
Related: Demat account · Trading account
BSE
Bombay Stock Exchange, one of India's two main stock exchanges. Its benchmark index is the Sensex.
C
CAGR
Compound annual growth rate: the steady yearly rate that would take a starting value to an ending value over a period. It smooths out ups and downs, so it can hide how bumpy the journey was.
Call option
A contract that gives the buyer the right, but not the obligation, to buy an underlying asset at a fixed strike price on or before expiry. The buyer pays a premium for this right.
Learn more: Learn: F&O risks
Related: Put option · Strike price · Premium · Expiry
Candlestick
A chart symbol summarising one period of trading with four prices: open, high, low and close. The thick body spans open to close; thin lines (wicks) show the high and low.
Learn more: How to read candlestick charts
D
Demat account
An account that holds your shares and other securities in electronic form. It is separate from the trading account you use to place orders.
Learn more: How to start trading in India
Related: Trading account · Broker
Direct plan and regular plan
Two versions of the same mutual fund scheme. A direct plan is bought straight from the fund house and has a lower expense ratio because no distributor commission is paid; a regular plan is bought through an intermediary.
Related: Expense ratio · Mutual fund
Diversification
Spreading money across different investments so that one holding doing badly has a smaller effect on the whole. It reduces concentration risk but does not remove market risk.
Related: Mutual fund · Risk-reward ratio
Dividend
A share of a company's profit paid to shareholders. Companies are not obliged to pay one, and the amount can change or stop.
Related: Market capitalisation
E
ETF
Exchange-traded fund: a fund that trades on a stock exchange like a share, often tracking an index such as the Nifty 50. Its price moves during market hours.
Related: Mutual fund · Nifty 50
Exit load
A fee some mutual funds charge if you redeem units within a stated period. The period and percentage are in the scheme's documents.
Related: Mutual fund · Expense ratio
Expense ratio
The yearly percentage of a mutual fund's assets charged to run it. It is deducted inside the fund's NAV, so you do not see a separate bill.
Related: Mutual fund · Direct plan and regular plan · NAV
Expiry
The date on which a futures or options contract ends. After expiry the contract no longer exists.
Related: Call option · Put option · Futures
F
Futures
A contract to buy or sell an underlying asset at a fixed price on a set future date. Because they are leveraged, losses can exceed the margin deposited.
Learn more: Futures and options basics
G
I
IPO
Initial public offering: the first time a company offers its shares to the public so they can be listed on an exchange.
Learn more: Learn: how IPOs work
Related: Price band · Subscription · ASBA · GMP (grey market premium)
L
Leverage
Using borrowed money or margin to control a larger position than your own capital would allow. It magnifies gains and losses alike.
Limit order
An order to buy or sell at your chosen price or better. It may not execute if the market never reaches that price.
Related: Market order · Stop-loss order
Listing gain
The difference between an IPO's issue price and its first-day listing price. It can be positive or negative.
Related: IPO · GMP (grey market premium)
Lot size
The fixed number of shares or contract units that must be bought together. In an IPO it is the minimum number of shares you can bid for; in futures and options it is the contract size set by the exchange.
Related: IPO · Price band · Futures
M
Margin
Money you must deposit with a broker to open certain positions, such as futures. It is a deposit against possible losses, not a fee.
Market capitalisation
A company's total market value: share price multiplied by the number of its shares. Companies are often grouped as large-cap, mid-cap or small-cap by this size.
Related: Nifty 50
Market order
An order to buy or sell immediately at the best available price. You get speed, but not control over the exact price.
Related: Limit order · Stop-loss order
Mutual fund
A pooled investment where many investors' money is managed by a fund house and invested in securities according to the scheme's stated objective. Returns are not guaranteed.
Learn more: Mutual fund screener
Related: NAV · Expense ratio · SIP
N
Nifty 50
NSE's benchmark index of 50 large companies listed on the National Stock Exchange. It is a weighted summary, so individual stocks can move differently from the index.
Learn more: Nifty vs Sensex
Related: Sensex · NSE · Market capitalisation
NSE
National Stock Exchange of India, one of the country's two main stock exchanges. Its benchmark index is the Nifty 50.
O
OHLC
Open, high, low and close: the four prices that summarise a trading period such as a day.
Related: Candlestick
Open interest
The total number of outstanding futures or options contracts that have not been closed or expired. It describes how many positions are open, not which way prices will move.
Learn more: How to read an option chain
Related: Futures · Call option · Put option
Option chain
A table listing the available call and put options for an underlying asset across strike prices and expiries, with their premiums, volumes and open interest.
Learn more: How to read an option chain
Related: Call option · Put option · Strike price · Open interest
P
Paper trading
Practising trades with virtual money so you can learn how orders, risk and emotions work without risking capital. Results do not predict real-money results.
Learn more: Paper-trading simulator
Related: Position sizing · Stop-loss order
Position sizing
Deciding how much to buy so that a loss, if your exit level is hit, stays within an amount you chose beforehand.
Learn more: Stop-loss and risk basics
Related: Stop-loss order · Risk-reward ratio
Price band
The range within which bids can be placed in a book-built IPO. The final issue price is set within it.
Put option
A contract that gives the buyer the right, but not the obligation, to sell an underlying asset at a fixed strike price on or before expiry.
Related: Call option · Strike price · Premium
R
Risk-reward ratio
The amount you stand to lose if a trade goes wrong compared with the amount you aim to gain if it works. A favourable ratio does not by itself make a trade likely to work.
Related: Stop-loss order · Position sizing
Riskometer
A mutual fund label that shows a scheme's risk level on a scale from low to very high, as defined by the regulator. It describes the scheme's risk, not your personal suitability.
Related: Mutual fund · Volatility
S
SEBI
Securities and Exchange Board of India, the regulator of India's securities markets.
Sensex
BSE's benchmark index of 30 large companies listed on the Bombay Stock Exchange.
SIP
Systematic investment plan: investing a fixed amount in a mutual fund at regular intervals, such as monthly. It spreads purchases over time; it does not guarantee returns.
Learn more: SIP calculator
Related: Mutual fund · NAV · SWP
Stop-loss order
An instruction to exit a position if the price reaches a level you set in advance, meant to limit a loss. In fast or gapping markets it can execute at a worse price than the trigger.
Learn more: What is a stop-loss?
Related: Limit order · Market order · Position sizing
Strike price
The fixed price at which the holder of an option can buy (call) or sell (put) the underlying asset.
Related: Call option · Put option · Option chain
Subscription
How many times an IPO has been applied for compared with the number of shares offered. A figure above 1x means demand exceeded supply and allotment is by lottery or proportion.
Related: IPO · Basis of allotment
SWP
Systematic withdrawal plan: withdrawing a fixed amount from a mutual fund at regular intervals.
Learn more: SWP calculator
Related: SIP · Mutual fund
T
Trading account
The account you use to place buy and sell orders on an exchange through a broker. It works together with your demat account, which holds the shares.
Related: Demat account · Broker
V
Volatility
How much and how quickly a price moves up and down. Higher volatility means larger swings in either direction.
Related: 52-week high and low · Riskometer
Volume
The number of shares or contracts traded in a period. It shows how actively something traded, not the direction of the price.
Related: Candlestick
Learn these terms in order
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Start learning free →Page last updated 9 October 2026. Spotted a mistake or a missing term? Email marketdekho01@gmail.com. Educational content, not investment advice.