What is the STOCK MARKET
The stock market is a market where shares of companies can be bought and sold. Like any other market, in the stock market too, buyers and sellers meet each other and negotiate the price to finalise the deal. Earlier, shares were bought and sold through verbal bids and the buyers and sellers used to make deals verbally. But now all these transactions are done through computers connected to the stock exchange network. This facility is also available on the Internet. Today the situation is such that the buyers and sellers do not even know each other.
Basic Stock Market Terms
Annual Report
An annual report is a yearly report that every company prepares to impress the shareholders of their company. The annual report consists of lots of information about a company, from cash flow to management strategy.
Several people read the annual report to look at the company’s solvency and judge their financial position.
Arbitrage
Arbitrage means purchasing something like foreign money from one place and selling it to another place where the price of the foreign money is higher than buying place.
Averaging Down
Averaging down means the investor buys more stock when the price of a particular stock goes down. This decreases the average purchase price of your specific stock.
Several investors use this strategy if they feel that consensus about a specific company is wrong, so they expect the stock price to jump back and earn profit.
Bear Market
It is a market where investors talk about the stock market performing in a downward trend, or it is a certain period where the prices of multiple stocks are falling.
Bull Market
It is a market where investors talk about the stock market performing in an upward trend, or it is a certain period where the prices of multiple stocks are increasing.
Broker
A broker is a person who buys and sells investment on your behalf and, in exchange, takes a certain amount of money called commission or fee.
Dividend
A dividend means when the company earns profit, a particular portion of their earnings is distributed to shareholders or the people who own the company stock on a quarterly or annual basis. Not every company pays dividends, and if you’re after penny stocks, you’ll likely not get any dividends.
Share Market
A share market is a market in which shares of a particular company are purchased and sold. The stock market is a definite example of a share market.
Sensex
Sensex is a figure that indicates all the relative share prices that are listed on the Bombay Stock Exchange.
Nifty
The Nifty 50 Index, called the National Stock Exchange of India, is the primary and brad based stock market index for the equity market of India.
The Nifty 50 consists of 50 Indian company stocks in 12 different sectors, and it is one out of two stock indices that are mainly used in the stock market.