Trading Terms — Ghanshyam Tech

A

Additional Surveillance Measure (ASM)

A SEBI framework that applies tighter margin and monitoring to high-risk stocks.

After-Market Order (AMO)

An order placed outside market hours that executes when the exchange opens next.

Application Supported by Blocked Amount (ASBA)

An IPO application mechanism where your money stays in your bank until allotment.

Simultaneously buying and selling the same asset in different markets to lock in a riskless profit.

Ask Price (Offer Price)

The lowest price a seller is currently willing to accept for a stock.

Asset Allocation

How you divide your investable money across different asset classes.

Average True Range (ATR)

A volatility measure showing the average daily price range of a security over a set period.

B

Buying shares today and selling them the next trading day before delivery settles.

Financial statement showing what a company owns, owes, and the shareholders' stake at a point in time.

NSE's sectoral index tracking the 12 most liquid banking stocks listed in India.

A prolonged period of falling stock prices, generally a decline of 20% or more from recent highs.

The highest price a buyer is currently willing to pay for a stock.

The gap between the best buy price and the best sell price in the market.

Blue-chip Stock

A share of a large, financially sound, and well-established company with a long record of stable performance.

Bollinger Bands

Volatility bands placed two standard deviations above and below a moving average.

Bombay Stock Exchange (BSE)

Asia's oldest stock exchange, established in 1875 and home to the Sensex.

A company's net assets — total assets minus total liabilities.

Bracket Order (BO)

An intraday order that simultaneously places a target and a stop-loss around your entry.

When price moves decisively below a support level or chart pattern boundary.

When price moves decisively above a resistance level or chart pattern boundary.

Fee charged by your stockbroker for executing buy or sell orders on your behalf.

A prolonged period of rising stock prices, typically accompanied by strong investor confidence and economic growth.

C

An option that gives the buyer the right to purchase an asset at the strike price.

A bar on a price chart showing open, high, low, and close for a time period.

Profit earned from selling a capital asset such as shares or mutual funds.

Cash Flow Statement

Financial statement tracking actual cash inflows and outflows across three business activities.

A recognisable formation on a price chart that suggests a likely future price direction.

SEBI-mandated price bands beyond which a stock cannot trade on a given day.

A legally binding document from your broker confirming all trades executed on a given day.

Cover Order (CO)

An intraday market or limit order that mandates an accompanying stop-loss order.

Selling a call option against shares you already own to earn premium income.

A company's short-term assets versus short-term liabilities — a liquidity gauge.

D

Fee levied by your depository participant when shares are debited from your demat account on a sell.

A bearish signal when a shorter-term moving average crosses below a longer-term one.

Debt-to-Equity Ratio (D/E)

Total debt a company carries relative to shareholders' equity.

Delivery vs Intraday (CNC vs MIS)

CNC holds shares in your demat account; MIS squares off the position within the same trading day.

How much an option's price changes for every ₹1 move in the underlying.

An electronic account that holds your shares and securities in dematerialised form.

An organisation that holds securities in electronic form on behalf of investors.

Depository Participant (DP)

An intermediary — usually a broker or bank — that opens and manages your demat account.

A financial contract whose value is derived from an underlying asset.

When price and a momentum indicator move in opposite directions, signalling a potential reversal.

Diversification

Spreading investments across assets so one bad bet doesn't sink the whole portfolio.

Cash payment a company distributes to shareholders from its profits.

Dividend Payout Ratio

Percentage of net profit a company distributes as dividends.

Annual dividend as a percentage of the current share price.

Domestic Institutional Investor (DII)

Indian institutions — mutual funds, insurance companies, and banks — investing in domestic markets.

The percentage drop from a portfolio's peak value to a subsequent trough.

E

Earnings before interest, taxes, depreciation, and amortisation — a core profitability measure.

Enterprise value compared with operating earnings — a debt-neutral valuation multiple.

Earnings Per Share (EPS)

Net profit a company earns for each outstanding share.

Enterprise Value (EV)

Total takeover cost of a company — market cap plus debt, minus cash.

A unit of ownership in a company that entitles you to a share of its profits and assets.

Exchange Transaction Charges

Fee levied by NSE or BSE on the total turnover transacted through a broker.

The average rupee amount you can expect to gain or lose per trade over many trades.

The date on which a futures or options contract ceases to exist and is settled.

Exponential Moving Average (EMA)

A weighted moving average that gives more importance to recent price data.

F

The upfront deposit required to take a futures or short-options position.

The nominal value printed on a share certificate, used as the base for dividends and stock splits.

Fibonacci Retracement

Horizontal price levels based on Fibonacci ratios that mark potential support or resistance.

Follow-on Public Offer (FPO)

A fresh share sale by a company that is already listed on a stock exchange.

Foreign Institutional Investor / FPI (FII)

Overseas funds and institutions registered to invest in Indian securities markets.

Free Cash Flow (FCF)

Cash a company generates after spending on capital expenditure to maintain or grow the business.

Free-float Market Capitalisation

The market value of only those shares available for public trading, excluding locked-in promoter and strategic holdings.

Fundamental Analysis

Evaluating a company's financial health and business quality to estimate fair value.

Futures Contract

An agreement to buy or sell an asset at a fixed price on a future date.

G

GST on Brokerage

Goods and Services Tax applied on the brokerage and certain other charges you pay your broker.

The rate at which an option's delta changes as the underlying price moves.

An empty space on a chart where no trading occurred between one session's close and the next open.

A bullish signal when a shorter-term moving average crosses above a longer-term one.

Good Till Triggered Order (GTT)

A standing conditional order on brokers like Zerodha that stays active until a price trigger is hit.

Graded Surveillance Measure (GSM)

An exchange surveillance framework for fundamentally weak or illiquid stocks with escalating restrictions.

Growth Investing

Targeting companies whose earnings and revenues are expanding faster than the market average.

H

Taking an offsetting position to reduce the risk of an existing investment.

I

A 12-character international code that uniquely identifies a specific security worldwide.

Implied Volatility (IV)

The market's forward-looking estimate of how much an asset's price will swing.

Initial Public Offering (IPO)

The first time a private company sells its shares to the public on a stock exchange.

Intraday Trading (Day Trading)

Opening and closing all trades within the same market session so no position is held overnight.

Intrinsic & Time Value

The two components of an option's premium: real payoff value plus remaining time value.

Intrinsic Value

Estimated fair value of a stock based on the company's fundamentals and future cash flows.

L

Last Traded Price (LTP)

The price at which the most recent transaction in a stock actually occurred.

Using borrowed money or derivatives exposure to amplify both gains and losses.

An order to buy or sell only at a specified price or better.

How easily a security can be bought or sold at a fair price without significantly moving the market.

Long-Term Capital Gains Tax (LTCG)

Tax on profit from selling listed equity held for more than 12 months.

The minimum number of units in one F&O contract, set by the exchange.

M

A trend-following momentum indicator derived from the difference between two EMAs.

A broker's demand to deposit more funds when your account falls below the required margin.

Mark to Market (MTM)

Daily revaluation of F&O positions and cash settlement of gains and losses.

Market Capitalisation

The total market value of all outstanding shares of a company.

The live order book showing pending buy and sell orders at each price level.

An order to buy or sell immediately at the best available price.

Market-cap Categories

SEBI's classification of listed companies into large-cap, mid-cap, and small-cap based on market capitalisation rank.

Maximum Drawdown (MDD)

The largest peak-to-trough drop ever recorded in a portfolio or strategy.

The rate at which a security's price is rising or falling over a given period.

Whether an option's strike is above, at, or below the current market price.

A SEBI-regulated pool of money managed by professionals and invested across securities.

N

National Stock Exchange (NSE)

India's largest stock exchange by trading volume, based in Mumbai.

Net Profit (PAT)

Profit remaining after all expenses, interest, depreciation, and taxes are deducted.

Net Profit Margin

Percentage of revenue left as net profit after all expenses, interest, and taxes.

New Fund Offer (NFO)

The launch period during which a new mutual fund scheme first collects money from investors.

NSE's benchmark index tracking the 50 largest, most liquid Indian companies.

O

Open, High, Low, Close — the four prices that define a candle or bar in any time frame.

Offer for Sale (OFS)

A mechanism for existing large shareholders to sell their stake in a listed company through the stock exchange.

On-Balance Volume (OBV)

A cumulative volume indicator that adds or subtracts volume based on the day's price direction.

Open Interest (OI)

The total number of outstanding F&O contracts not yet settled or closed.

Operating Margin

Operating profit as a percentage of revenue — how efficiently a business is run.

A table showing all available strike prices, premiums, and OI for a given expiry.

The price paid by the option buyer to the seller for the rights the contract conveys.

Options Contract

A contract giving the buyer the right, but not the obligation, to buy or sell an asset.

Overbought & Oversold

Conditions where a security has risen or fallen so sharply that a reversal or pause is likely.

P

P/E ratio adjusted for the company's expected earnings growth rate.

A very low-priced share of a small, often thinly traded company, typically carrying high risk.

Physical Settlement

Settling an expiring stock F&O contract by delivering or receiving the actual shares.

Price levels calculated from the prior period's high, low, and close used as intraday support and resistance.

Promoter shares offered as collateral against loans — a key governance risk indicator.

The complete collection of all financial assets held by an investor.

Position Sizing

Deciding how many shares or lots to trade based on your risk tolerance.

Positional Trading

Holding a trade for weeks to months to profit from a sustained directional trend.

Price-to-Book Ratio (P/B)

Market price of a stock compared with the company's net asset value per share.

Price-to-Earnings Ratio (P/E)

How many rupees you pay for each ₹1 of a company's yearly earnings.

The market where new securities are issued and sold directly by the company to investors for the first time.

Promoter Holding

Percentage of a company's shares held by its founding or controlling shareholders.

An option that gives the buyer the right to sell an asset at the strike price.

Q

Stricter liquidity test that excludes inventory from short-term assets.

R

Relative Strength Index (RSI)

A momentum oscillator measuring the speed and magnitude of recent price changes, scaled 0–100.

A price level where selling pressure has historically stalled or reversed an advance.

Return on Assets (ROA)

Net profit generated per rupee of total assets held by the company.

Return on Capital Employed (ROCE)

Operating profit earned per rupee of total capital — debt plus equity.

Return on Equity (ROE)

Net profit generated per rupee of shareholders' equity.

Total money a company earns from its business operations before any deductions.

Risk Management

The practice of limiting losses to protect your trading capital over time.

Risk-Reward Ratio (RRR)

Potential profit on a trade compared with the amount risked.

Closing a near-expiry F&O position and reopening an equivalent one in the next expiry.

Rupee Cost Averaging (RCA)

Investing a fixed rupee amount at regular intervals regardless of the current market price.

S

SEBI Turnover Fees

Regulatory levy charged by SEBI on the total value of trades, paid by brokers and passed to clients.

Selling shares (or futures) today and buying them back the next trading day.

An ultra-short trading style that captures tiny price moves multiple times a day.

Secondary Market

The market where previously issued securities are bought and sold between investors on a stock exchange.

Securities Transaction Tax (STT)

A government tax levied on every buy or sell of listed securities on Indian exchanges.

Securities and Exchange Board of India (SEBI)

India's statutory market regulator, protecting investors and developing capital markets.

BSE's benchmark index of 30 large, financially sound listed companies.

Short-Term Capital Gains Tax (STCG)

Tax on profit from selling listed equity held for 12 months or less.

Simple Moving Average (SMA)

The arithmetic mean of a stock's closing prices over a chosen number of periods.

Closing an open position by placing the opposite trade to exit completely.

State government levy on the transfer of securities, collected at the time of buying.

Stochastic Oscillator

A momentum indicator comparing a closing price to its recent high-low range, scaled 0–100.

A SEBI-registered intermediary that executes buy and sell orders on exchanges on your behalf.

Stop-Limit Order

A stop-loss that triggers a limit order rather than a market order once the stop price is hit.

Stop-Loss Order (SL)

An order that triggers a sale (or buy) once the price crosses a specified threshold, to cap losses.

The fixed price at which an option buyer can buy or sell the underlying asset.

A price level where buying interest has historically halted or reversed a decline.

Holding trades for a few days to a few weeks to capture a medium-term price swing.

Systematic Investment Plan (SIP)

A method of investing a fixed amount in a mutual fund at regular intervals.

T

An optional same-day settlement cycle available on select large-cap stocks.

India's standard settlement cycle where equity trades settle the next business day.

Technical Analysis

Forecasting price moves by studying charts, patterns, and market data.

The daily erosion in an option's premium purely due to the passage of time.

The unique alphabetic code used to identify a stock on a stock exchange.

Trading Account

The account you use to place buy and sell orders on stock exchanges.

The total number of shares (or contracts) traded in a stock during a given period.

The prevailing direction of price movement over a given period.

A straight line drawn on a chart connecting successive highs or lows to define a trend.

V

Value Investing

Buying stocks trading below their estimated intrinsic value and waiting for the gap to close.

How much an option's premium changes for a 1% change in implied volatility.

The degree to which a security's price fluctuates over time, used as a measure of risk.

Volume Weighted Average Price (VWAP)

The average price of a stock weighted by volume traded throughout the session.

W

The percentage of your trades that end in a profit.