Glossary

1) Backwardation - Backwardation is when the current price of an underlying asset is

higher than prices trading in the futures market. Futures contracts are financial
contracts that obligate a buyer to purchase an underlying and a seller to sell an asset at
a preset date in the future. Backwardation can occur as a result of a higher demand for
an asset today than the contracts maturing in the future through the futures market.

2) Badla - In common parlance the carry-forward system is known as 'Badla', which

means something in return. Badla is the charge, which the investor pays for carrying
forward his position. It is a hedge tool where an investor can take a position in a scrip
without actually taking delivery of the stock.

3) Bear–A bear is an investor who believes that a particular security or market is headed
downward and attempts to profit from a decline in stock prices. Bears are
typically pessimistic about the state of a given market.

4) Bear market - A bear market is a period marked with falling stock prices. In a bear
market, investor confidence is extremely low. Many investors opt to sell off their
stocks during a bear market for fear of further losses, thus fueling a vicious cycle of
negativity.

5) Beneficial owner -A beneficial owner is a person who enjoys the benefits of

ownership even though title to some form of property is in another name. It also
means any individual or group of individuals who, either directly or indirectly, has the
power to vote or influence the transaction decisions regarding a specific security, such
as shares in a company.

6) Bid-price- The bid price represents the maximum price that the buyer/buyers are
willing to give to buy a share.

7) Blue chip shares - These are the stocks of those reputed companies who are in the
market for a very long time, financially strong and have a good track record of
consistent growth and returns in the past many years. Their stocks have low risk
compared to mid cap and small cap stocks.

8) Bombay stock exchange-The Bombay Stock Exchange (BSE) is the first and largest
securities market in India and was established in 1875 as the Native Share and Stock
Brokers' Association. Based in Mumbai, India, the BSE lists close to 6,000 companies
and is one of the largest exchanges in the world, along with the New York Stock
Exchange (NYSE), NASDAQ, London Stock Exchange Group, Japan Exchange
Group, and Shanghai Stock Exchange.
9) Bourses - A bourse is a market organized for the purpose of buying and selling
securities, commodities, options and other investments. A bourse is more commonly
known as a stock exchange. The word "bourse" is based on the house, belonging to
Van der Burse, where merchants would gather and trade with one another.

10) Broker- A stockbroker is an individual/organization who is a registered member of

the stock exchange and are given license to participate in the securities market in
place of its clients. Stockbrokers can directly buy & sell stocks in the share market on
behalf of their clients and charge a commission for this service.

11) Bull - A bull market is the condition of a financial market of a group of securities in
which prices are rising or are expected to rise. The term "bull market" is most often
used to refer to the stock market but can be applied to anything that is traded, such as
bonds, real estate, currencies and commodities. Because prices of securities rise and
fall essentially continuously during trading, the term "bull market" is typically
reserved for extended periods in which a large portion of security prices are rising.
Bull markets tend to last for months or even years.

12) Call option - Call options are agreements that give the option buyer the right, but not
the obligation, to buy a stock, bond, commodity or other instrument at a specified
price within a specific time period. The stock, bond, or commodity is called the
underlying asset.A call buyer profits when the underlying asset increases in price.

13) Contango - Contango is a situation where the futures price of a commodity is above
the expected spot price. Contango refers to a situation where the future spot price is
below the current price, and people are willing to pay more for a commodity at some
point in the future than the actual expected price of the commodity. This may be due
to people's desire to pay a premium to have the commodity in the future rather than
paying the costs of storage and the carry costs of buying the commodity today.

14) Capital formation- Expansion of capital or capital goods through savings, which
leads to economic growth.

15) CenralDepositoryServicesLimited(CDSL)- Its primary function is to hold securities

either in certificated or un-certificated (dematerialized)form. It works for BSE.

16) Clearing corporation - A clearing corporation is an organization associated with an

exchange to handle the confirmation, settlement and delivery of transactions. Clearing
corporations fulfill the main obligation of ensuring transactions are made in a prompt
and efficient manner. Clearing corporations are also referred to as "clearing firms" or
"clearing houses."
17) Collective investment scheme - A Collective Investment Scheme (CIS) is an
investment scheme wherein several individuals come together to pool their money for
investing in a particular asset(s) and for sharing the returns arising from that
investment as per the agreement reached between them prior to pooling in the money.

18) Contract note -Contract note is the legal record of any transaction carried out on a
stock exchange through a stockbroker. It serves as the confirmation of trade done on a
particular day on behalf of a client on a stock exchange.

19) Cornering - In finance, cornering the market consists of obtaining sufficient

control of a particular stock, commodity, or other asset in an attempt to manipulate
the marketprice. One definition of cornering a market is "having the
greatest market share in a particular industry without having a monopoly."

20) Correction - Reverse movement, usually downward, in the price of an individual

stock, bond, commodity, or index. If prices have been rising on the market as a
whole, and then fall dramatically, this is known as a correction within an upward
trend.

21) Counter party- A counterparty is the other party that participates in a financial
transaction, and every transaction must have a counterparty in order for the
transaction to go through. More specifically, every buyer of an asset must be paired
up with a seller who is willing to sell and vice versa.

22) Credit worthiness- Creditworthiness is how a lender determines that you

will default on your debt obligations, or how worthy you are to receive new credit.
Your creditworthiness is what creditors look at before they approve any new credit to
you.

23) Demat account- It is the short form for ‘Dematerialised account’. The demat account
is similar to a bank account. Just as money is kept in your saving account, similarly
bought stocks are kept in your demat account.

24) Dematerialisation - Dematerialisation is the process by which a client can get

physical certificates converted into electronic balances. An investor intending to
dematerialise its securities needs to have an account with a DP. ... Holdings in only
those securities that are admitted for dematerialisation by NSDL can be
dematerialised.

25) Depository – Depository is a place where financial securities are held in

dematerialised form. It is responsible for maintenance of ownership records and
facilitation of trading in dematerialised securities.
26) Depository participant- Depository Participant (DP) is described as an Agent (law)
of the depository. They are the intermediaries between the depository and the
investors. The relationship between the DPs and the depository is governed by an
agreement made between the two under the Depositories Act.

27) Disinvestment - Disinvestment is the action of an organization or government selling

or liquidating an asset or subsidiary.

28) Economic Growth - Economic growth is the increase in the inflation-adjusted market
value of the goods and services produced by an economy over time. It is
conventionally measured as the percent rate of increase in real gross domestic
product, or real GDP.

29) Equity Cult - Equity Cult refers to behaviour when one stock create a heavy interest
among investor who want to invest in the equity markets even though the company's
current fundamentals are insignificant.

30) Euro Bond - A eurobond is an international bond issued that is denominated in a

currency not native to the country where it is issued. Also called external bond;
"external bonds which, strictly, are neither eurobonds nor foreign bonds would also
include: foreign currency denominated domestic bonds…"

31) FinancialInstitutions – A financial institution is an intermediary between consumers

and the capital or the debt markets providing banking and investment services.

32) ForgedTransfers - An instrument on which the signature of the transferor is forged is

called forged transfer. It is a null transfer and does not confer any title. It is so
because in case of forgery there is not merely an absence of free consent but there is
no consent at all.

33) HighestBidder - someone who offers to pay a particular amount of money for
something: In an auction, goods or property are sold to the highest bidder (= the
person who offers the most money).

34) Hypothecated – It occurs when an asset is pledged as collateral to secure a loan,

without giving up title, possession or ownership rights, such as income generated by
the asset. However, the lender can seize the asset if the terms of the agreement are not
met.

35) Initial Public Offer (IPO) - Initial public offering (IPO) or stock market launch is a
type of public offering in which shares of a company are sold to institutional
investors[1] and usually also retail (individual) investors.

36) Insider Trading - Insider trading is the buying or selling of a publicly traded
company's stock by someone who has non-public, material information about that
stock. Insider trading can be illegal or legal depending on when the insider makes the
trade. It is illegal when the material information is still non-public.
37) InstitutionalInvestor - An institutional investor is an entity which pools money to
purchase securities, real property, and other investment assets or originate
loans.Institutional investors include banks, insurance companies, pensions, hedge
funds, REITs, investment advisors, endowments, and mutual funds.

38) Investors -An investor is any person or other entity (such as a firm or mutual fund)
who commits capital with the expectation of receiving financial returns. Investors
utilize investments in order to grow their money and/or provide an income during
retirement, such as with an annuity.

39) KerbTrading - Curb trading occurs outside of general market operations, commonly
through computers or telephones after the official exchanges have closed. As opposed
to trading on official exchanges such as the New York Stock Exchange (NYSE) or
the NASDAQ Stock Market. The practice is also known as "kerb trading."

40) Lame Duck - Lame duck is an out-of-use term used with reference to a trader who
has defaulted on a debt or gone bankrupt due to an inability to cover trading losses.
The phrase can be traced to the early years of commodity trading and development of
the London Stock Exchange during the mid-1700s.

41) Liquidity - Liquidity describes the degree to which an asset or security can be
quickly bought or sold in the market at a price reflecting its intrinsic value. In other
words: the ease of converting it to cash.

42) Merchant banker - Merchant banker offers numerous services to public sector
undertakings and units and their public utilities. They assist in raising capital (long-
term), in the marketing of securities, in foreign collaborations as well as in arranging
for long-term finances from lending institutions.

43) Mutual fund - A mutual fund is a type of financial vehicle made up of a pool of
money collected from many investors to invest in securities such as stocks, bonds,
money market instruments, and other assets.

44) National Securities Depositories Limited (NSDL) - National Securities Depository

Limited (NSDL) is an Indian depository based in Mumbai. It was established on 8
November 1996 as the first electronic securities depository in India with national
coverage.

45) Odd lots - An odd lot is an order amount for a security that is less than the normal
unit of trading for that particular asset. Odd lots are considered to be anything less
than the standard 100 shares for stocks. Trading commissions for odd lots are
generally higher on a percentage basis than those for standard lots, since most
brokerage firms have a fixed minimum commission level for undertaking such
transactions.

46) Offer price- It refers to the lowest price at which the owner of the equity shares is
ready to sell the shares in the stock market.
47) Online trading system- Online trading is the execution of buying and selling orders
over the internet using your PC or your laptop. You can also execute these orders by
downloading a trading app on to your smart phones.

48) Order Confirmation Slip- This is a document that is a proof that the said order as
placed by a buyer to a broker has been transmitted to and confirmed by the computer
system at stock exchange.

49) Pay-in-day- Pay-in day is the day when the broker shall make payment or delivery of
securities to the exchange.

50) Pay-out-day- Pay-out day is the day when the exchange makes payment or delivery
of securities to the broker.

51) Physical certificate- A stock certificate is the physical piece of paper representing
ownership in a company. Stock certificates will include information such as the
number of shares owned, the date, an identification number, usually a corporate seal
and signatures.

52) Pledged- Cash deposit or placing of owned property by a debtor (the pledger) to a
creditor (the pledgee) as a security for a loan or obligation. The pledgee has an
implied right to confiscate and/or sell the pledged property to satisfy his or her claim
in case of a default.

53) Price Rigging -Price rigging is an illegal action that occurs when parties conspire to
fix or inflate prices to achieve higher profits at the expense of the consumer.

54) Productive Investment - An investment is considered productive when the money is

in the acquisition, renovation and improvement of the assets so that it makes new
goods and services, which will benefit our society in case of governmental
investments, will satisfy clients' needs in case of companies, or will bring personal
growth and welfare.
55) Put Option - A put option is an option contract in which the holder (buyer) has the
right (but not the obligation) to sell a specified quantity of a security at a specified
price (strike price) within a fixed period of time (until its expiration).
56) Reinvestment - Reinvestment is using dividends, interest and any other form of
distribution earned in an investment to purchase additional shares or units, rather than
receiving the distributions in cash.

57) Rolling Settlement Basis– A rolling settlement is the process of settling security
trades on successive dates based upon the specific date when the original trade was
 made so that trades executed today will have a settlement date one business day later
than trades executed yesterday.

58) Safe Custody - Safe Custody is the safe keeping of important documents and
valuables. Items commonly requested by customers to be held in safe custody by the
bank include property deeds, a Will as well as other valuables and documents.

59) Screen-based electronic trading system- An electronic stock exchange refers to a

stock bourse where the majority, if not all, trades take place through electronic trading
platforms or portals. Electronic trading is considered more efficient, superfast and
accurate and carries out multi-billion dollar worth of trades in equity markets the
world over every day.

60) SEBI - The Securities and Exchange Board of India (SEBI) is the leading regulator of
the securities market in the Republic of India.SEBI drafts regulations and statutes in
its legislative capacity, passes rulings and orders in its judicial capacity, and conducts
investigations and enforcement actions.

61) Secondary Market - The secondary market, also called the aftermarket and follow
on public offering is the financial market in which previously issued financial
instruments such as stock, bonds, options, and futures are bought and sold.

62) Sensex-is an index that represents the direction of the companies that are traded on
the Bombay Stock Exchange, BSE. The word Sensex comes from sensitive index.
The Sensex captures the increase or decrease in prices of stocks of companies that it
comprises. A number represents this movement.
63) Short Selling - Short selling is an investment or trading strategy that speculates on
the decline in a stock or other securities price.

64) Single Trading Platform - A trading platform is software used for opening, closing,
and managing market positions through a financial intermediary.

65) Speculations - Speculation refers to the act of conducting a financial transaction that
has substantial risk of losing value but also holds the expectation of a significant gain
or other major value. With speculation, the risk of loss is more than offset by the
possibility of a substantial gain or other recompense.

66) Speculative Activity - In finance, speculation is also the practice of engaging in risky
financial transactions in an attempt to profit from short term fluctuations in the market
value of a tradable financial instrumentrather than attempting to profit from the
underlying financial attributes embodied in the instrument such as capital gains.
67) Speculator - A speculator utilizes strategies and typically a shorter time frame in an
attempt to outperform traditional longer-term investors. Speculators take on risk,
especially with respect to anticipating future price movements, in the hope of making
gains that are large enough to offset the risk.

68) Stag - An investor or speculator who subscribes to a new issue, expecting the price of
the stock to rise immediately upon the start of trading is known as a stag. The sole
aim of a stag is to sell the shares soon after allotment to realise a quick profit.

69) Stock Broker- A stockbroker is a professional who executes buy and sell orders for
stocks and other securities on behalf of clients. A stockbroker may also be known as a
registered representative, investment adviser or simply, broker. Stockbrokers are
usually associated with a brokerage firm and handle transactions for retail and
institutional customers alike. Stockbrokers often receive commissions for their
services, but individual compensation can vary greatly depending on where they are
employed.
70) Stock Exchange- Organized and regulated financial market where securities (bonds,
notes, shares) are bought and sold at prices governed by the forces of demand and
supply.Stock exchanges impose stringent rules, listing requirements, and statutory
requirements that are binding on all listed and trading parties.

71) Trading- Trading is an active style of participating in the financial markets that seeks
to outperform traditional buy-and-hold investing. Rather than trying to profit from
long-term uptrends in the markets, traders look for short-term price moves to profit in
both rising and falling markets.
72) Trading Malpractices: Insider trading is defined as malpractice wherein trade of a
company's securities is undertaken by people who by virtue of their work have access
to the otherwise non-public information which can be crucial for making investment
decisions.
73) Transparency- Transparency is the extent to which investors have ready access to
required financial information about a company such as price levels, market depth
and audited financial reports. Transparency helps reduce price volatility because all
market participants can base decisions of value on the same data. Companies also
have a strong motivation to provide disclosure because transparency is rewarded by
the stock's performance.

74) Underwriters-An underwriter is any party that evaluates and assumes another party's
risk for a fee. The fee is often a commission, premium, spread, or interest.
 Underwriters are critical to the financial world including the mortgage industry,
insurance industry, equity markets, and common types of debt security trading.

75) Unique Order Code Number - The International Securities Identification Number
(ISIN) is a code that uniquely identifies a specific securities issue. The organization
that allocates ISINs in any particular country is the country's respective National
Numbering Agency (NNA).International Organization for Standardization (ISO)
6166 currently defines an ISIN’s structure. Currently, an ISIN can be attributed to
most forms of securities, including (but not limited to) equity shares, units, and/or
depositary receipts; debt instruments, including bonds, stripped coupons and principal
amounts, and T-bills; rights and warrants; derivatives; commodities and currencies.