Know about some of the most common Share Market Jargons or Stock Market Jargons used in India.
Learn & become a pro in share market.
Share Market Jargons used in India
Share Market Jargons are some specific terms used in share market and related activities. They are best means of understanding among the investors or the shareholders in the stock market.
They use these terms to discuss strategies, stock trading, charts, patterns, shares, and everything related to share market.
One needs to be acquainted with all these terminologies to be able to make profits in the share market.
Jargons aid in understanding and improving the relationship between the share market and the developments happening in the economy.
The most commonly used jargons are bull market, bear market, trend, face value, upper/lower circuit, long/short position, turnover, server buzz, open interest, and so on.
Any trader should understand the basic share market jargon in order to excel in the industry. If you want to sustain share market investment and trading, then here are some important terms to learn.
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Bull Market (Bullish) and Bear Market
If you are in the share market then you must have heard about the Bull market or bullish. In a market, if the stocks are going up during a particular time then it is a bull market.
And when you believe that the value of your stock is going up then it is bullish on the stock pricing. A bear market is nothing but the opposite of a bull market.
Stock Market Trend
Trend is a very famous term which we commonly use in the share market. When something is trending in the share market, this term shows the status of the stock or security.
There are several trends which are there in the market, as in, if the market is going down then the trend is bearish. Likewise, when the market is trading flat then that trend is sideways.
Face value of a stock and Volume
The face value of a stock is the real cost of the stock in the market, i.e. what we see in the certificate. This face value is important concerning corporate action. This face value is also known as per value.
Volume simply refers to the value of the stock that changed hands during the given day. This term is what we use for the stocks which are currently available in the company.
52 week high, 52 week low, All time high & All time Low
The 52 week high and low state the highest and lowest pricing in which the user can trade a security within 1 year time period. It is a technical indicator.
According to the share market if the stocks in the market reach 52 weeks high then that indicates the bullish trend.
If the stocks in the market reach 52 weeks low then that trend is a bearish trend in the market. Both of these trends are time and market dependent. Sometimes the stock value may go up and sometimes down.
While it is similar to the 52 weeks high/low concept, it brings out the highest value of the stock with which the trader works on it from the time he sees it on the certificate.
On a similar note, these will help the trader in finding out the lowest value of the stock.
Upper Circuit, Lower Circuit & Square Off
The upper circuit simply tells the highest pricing of a stock at which it can reach on the day and the lower circuit simply tells the lowest pricing of the stock which it has reached on a particular day. Most of the time there is a pricing band which has been set up already.
Shorting simply tells if you intend to close an existing position of the stock. When you are short on the stock and you are squaring off the position of stock this simply means you are buying it back.
“Short” is a position indicating the sale of stock that you do not have any ownership on. If the investor is selling short, then they believe the stock price will decrease in value.
Now, if there is a price drop, then you can buy the stock at a low price and make what minimal profit it may give.
OHLC (open, high, low, closing)
OHLC means open, high, low, and closing and it is a visualization technique used in the stock market. This simply tells the highest value of the stock at which it is traded.
Also, it openly tells the opening value of the stock. Now, low tells the lowest value at which the stock is traded and closing tells the closing value of the stock after trading.
This term is very popular in the market. The market decides the value of a stock during trading. It can be high, open, low, and closing according to the conditions in the market.
The trader will be initiating with an expectation to square off the position within a 24 hour period.
It is the divisions of the markets in which the financial instrument of the market has been traded. There are mainly three segments of the market – Capital market, futures and options, and wholesales debt.
This market basically helps in the growth of the country and decides the economic growth of the country.
If you are planning to have a short term investment, then choose money market and for long-term investors, capital market will suffice.
Capital market deals with the financial instruments and commodities that are long term securities and this is the only thing which you need to keep in your mind.
In the capital market, buyers and sellers engage in the trading of any given financial securities. The players in the capital market are sellers and institutions. The capital market simply provides a link between investors and wealth creators.
The capital market simply provides a link between two persons, one person has the money and the other person is in need of the money.
So, the person who needs the money borrows the money from the person who has the money and the person who has the money lends the money on a certain rate of interest.
This money is used for productive purposes and creates a wealth economy in the long term and any long-term work gives long-term productivity.
Support System, Future and Options
The capital market provides support to the system of capitalism of the country. One of the most important of the capital markets is to provide the ease of transaction for both the investor and companies.
Both parties should be able to find each other with ease and the legal aspect of things should go smoothly.
Functions of the capital market include facilitating the trading of securities apart from minimizing the transaction and data cost.
It helps by mobilizing the savings to help the trader finance long term investments. Also, it encourages better ownership of productive assets and office insurance against the risk. Anything could happen with market and pricing when it comes to derivative trading.
Future and options simply mean that if one would invest in the market and show interest in the market, the person will get to know about the future risks and more options in the market.
Wholesale debt market
This division of the market simply deals with the income of securities. People who need money lend their securities like bonds, stocks, and many other things to borrow the money from the market.
This market simply deals with the economy of the country and helps in the growth of the country. The government borrows money from the whole debt market to build the economy of the country.
This market helps in the development of the country by giving money to the government in exchange for something like bonds, stocks, and many other things.
Conclusion on Share Market Jargons
Trading and its analysis majorly rely on data and trading summary from the previous day.
The market movements could be in cash and derivatives and these jargons serve as an indicator to help traders in understanding the market status.
The data will be available in any stock market related websites if they have daily statistics.
Even if you do not have the knowledge to operate analytical tools, understanding the jargons will help you simplify the existing charts.
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