stock market terminologies

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Stock Market
Terminologies

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SUBMITTED TO:
DR. KANWAL
SUBMITTED BY:
TEHMINA KOUSAR MC15205
MEMOONA MAQSOOD MC15218
| M.COM 3.5 YEARS | JUNE 30TH , 2017

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Acknowledgement
In the name of ALLAH the most kind and merciful
First of all I’m grateful to ALLAH ALMIGHTY, who bestowed me with health,
abilities and guidance to complete the assignment in a successful manner, and
without HIS help I was unable to perform this task
We are highly thankful to Dr. Kanwal Khan for making us able to furnish their
knowledge on such a remarkable topic of assignment.

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Stock Market
It is a place where shares of pubic listed c ompanies are traded. The primary market is
where companies float shares to the general public in an initial public offering (IPO) to
raise capital.

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Stags
A stage is an investor or speculator who subscribe to a new issue with the intention of
selling them soon after allotment to realize a quick profit they are called as premium
hunter
Agent
A brokerage firm is said to be an agent when it acts on behalf of the client in buying and
purchasing of shares

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Index
A statistical measure of the state of the stock market, based on the performance of stocks.
Examples are the S&P/TSX Composite Index and the S&P/TSX Venture Composite Index.
Short Sale
When a trader borrows shares from a brokerage, sells them, then buys them back when
the stock is cheaper, returning them to the broker and pocketing the difference (the
profit); used when you think a stock’s price is going to decrease

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Cross
A trade that occurs when two accounts within the same Participating
Organization/Member wish to buy and sell the same security at an agreed price and
volume. With some approved exceptions, crosses can only occur within the current bid
and ask for the stock.
Odd Lot
A number of shares which are less than or greater than but not equal to the board lot size.
For example, if the board lot size is 100 shares, an odd lot would be 95 or 102 shares.
Usually odd lots are difficult for trading and it is not accepted easily in the market.
Board lot
A standard trading unit as defined by the particular exchange board. Board lot size usually
depends on the per share price. Common board lot sizes are 50, 100, 500, 1000 units.

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Ask/ Offer
The lowest price an owner is willing to sell the stock
Beta
It is measurement of relationship between stock price of any particular stock and the
movement of whole market.

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Blue Chip Company
Stocks of large, well established, and financially sound companies which hold a record of
consistently increasing rates of paying the dividends over decades to its stockholders.
Cornering
Corner the market to have the greatest market share in a particular industry without
having Monopoly

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Diversification
Reducing the investment risk by purchasing shares of different companies operating in
different sectors
Liquidity
Liquidity is how easily you can get into and out of stock

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Limit order
An order to buy or sell stock at a specified price. The order can be executed only at
the specified price or better. A limit order sets the maximum price the client is willing to
pay as a buyer, and the minimum price they are willing to accept as a seller.
Call Option
An option which gives the holder the right, but not the obligation, to buy a fixed amount

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of a certain stock at a specified price within a specified time. Calls are purchased by
investors who expect a price increase.
Market Capitalization
It is the measure of corporate size of a country. It shows the current stock price multiplied
by the number of outstanding shares. It is commonly referred to as “Market Cap”
Quote
The bid, ask, and last price for a stock at a given point during the trading day

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Trading volume
Trading volume is the number of shares being traded in each day- a factor that has
huge implications for a stock’s liquidity
Going long
You are betting that the company stock will increase in price so that you can buy
low and sell high

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Bid Ask Spread
The bid ask spread is the difference between what people have to spend
Bid
The highest price a buyer is willing to pay for a stock. When combined with the ask price
information, it forms the basis of a stock quote.

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Defensive Stock
A stock purchased from a company that has maintained a record of stable earnings and
continuous dividend payments through periods of economic downturn.
Bull
An investor, who tries to make profit by speculating a rise in prices in future, the Bull buys
at present when prices are low and sells in future when prices rises.

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Buy-In
If a broker fails to deliver securities sold to another broker on the settlement date, the
receiving broker may buy the securities at the current market price of the stock and
charge the delivering broker the cost difference of such a purchase.
Falling Knife
A falling knife is a slang phrase for a security or industry in which the current price or
value has dropped significantly in a short period of time. A falling knife security can
rebound, or it can lose all of its value, such as in the case of company bankruptcy where
equity shares become worthless.

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Street price
When the stock exchange is closed selling of securities and shares is done outside the
exchange at a private price.
Capital structure
Capital structure means the proportion of debt and equity used for financing the
operations of a business or enterprise.

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Stock Split
An attempt to increase the number of outstanding shares of a company by splitting the
existing shares. It is usually done to increase the availability of shares in the market. The
usual split ratio is 2:1 or 3:1, i.e. one share is split into two or three.
Bull Market:
A market in which the stock price are increasing consistently.

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Convertible securities
A security (bonds, debentures, preferred stocks) by an issuer that can be converted into
other securities of that issuer are known as convertible securities. The conversion usually
occurs at the option of the holder, but it may occur at the option of the issuer.
Bear Market
A market in which stock prices are falling consistently.

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Fill Or Kill (FOK)
When you want all of your order filled immediately or none at all; for example, if you want
to buy 100 shares at $10, a FOK order means you want all 100 shares at that price or none
at all
Lame Duck of the Market
An investor who suffer more due to fall in prices

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Over the counter market
A decentralized market (as opposed to an exchange market) where geographically
dispersed dealers are linked by telephones and computers. The market is for securities not
listed on a stock or derivatives exchange.
Buy-and-hold
An investment strategy where there is no trading on a portfolio between the initial
selection of the securities and the end of a certain time period. When there is bearish
trend to earn profit but it can be very risky during recessions.

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Fund of funds
A managed investment fund where the pool of holdings are funds,usually managed by
another investor rather than Over-the- Counter (OTC) or exchange-traded instruments.
Fund of funds can reduce the impact of poor decisions by one fund manager
Arbitrage
The term arbitrage means dealing in same commodities to earn profit from different prices
in different markets, at a specific moment. The condition for this operation is that different
prices should exist in different markets for the same commodity at the same time.

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Dumping
In market report "Dumping" indicates the process of capturing foreign markets to get a
monopolostic controlover them. A countrymay even export goodsat price much below the
cost pf production just to increase the sale of goods abroad and to get a monoplistic control
over foriegn market.
Rigging
Rigging means "To hold up" or "To support the price level by artificial means". Sometime,
a large number of bulls organize themselves to control the market operations through
bogus (artificial) transaction to manipulate the prices of commodities in their favour.

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Demurrage
This term refers to the daily charges made for the detention of a ship beyond the agreed
number of days is called demurrage
Strading
A situation in which the market operators take advantage of abnormal difference in the
rates of different bills in the same market and carry on arbitrage operation by selling one
kind of bill to buy another kind of bill, This operation is known as Strading.

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Clogging
Clogging is derived from a word "Clog" which means "to block or to stop”. In business
clogging stands for a particular situation when market is saturated with surplus funds. This
situation blocks or stop the normal operation of a business in a market.
Arbitrage
The term arbitrage means dealing in same commodities to earn profit from different prices
in different markets, at a specific moment. The condition for this operation is that different
prices should exist in different markets for the same commodity at the same time.
Quote
The bid, ask, and last price for a stock at a given point during the trading day.

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Bagel land
When the stock price of a financial security is approaching 0 dollars, i.e, it has fallen
from stock market favor due to unresolvable internal issues, the stock is said to have
reached Bagel land
Bear Hug
If there exists a doubt that a target company's management will not agree to sell its
shares, bear hugs are used to make the sales lucrative. Bear hugs are when an offer is
made to buy the shares of a company at a rate much higher than the market valuation.

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Green Investing
When investment activities focus on green objectives, like natural energy conservation,
alternative energy source discoveries, clean water and air technologies and other
environmentally oriented businesses, the investment process is termed as green investing
Sheep
An investor who is prone to rash, emotional decisions as he lacks a proper trading
strategy, is known as a sheep in financial lingo.

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Short Squeeze
This is a situations where stock prices are pushed upwards due to lack of supply and very
high demand.
P/E Ratio
A price earnings ratio is a company valuation ratio that is calculated by dividing a
company's market value per share by the company's earnings per share. P/E 10 signifies
that a company's stock is trading at 10 times the value of the company's earnings per
share.

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Dirty Stock
Dirty stock means a stock that is not given a good delivery status due to missing or wrong
endorsements or documentation transfer. Dirty stock will mostly intrude the transaction
procedure.