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Some basic stock market terms you must know!

            Investment terms One should know.

Before investing in stocks,every investor should know some basic terms so that he/she can trade efficiently and maximise his/her profits from his/her portfolio.Stock market terminology relates to industry-specific jargons which are used in the stock markets regularly. 

The terms are as follows:
i)Turnover:
Turnover is an accounting concept that calculates how quickly a business conducts its operations.Turnover in accounting is how much a business makes in sales during a period.
Formula:Cost of Goods Sold/Average Inventory.
Image Courtesy:Unknown
ii)Market Capitalisation:
Market capitalization, commonly called market cap, is the market value of a publicly traded company's outstanding shares. Market capitalization is equal to the share price multiplied by the number of shares outstanding. 
Formula:Price of stock ×No.of shares in market.
Image Courtesy:Investopedia
iii)P/E Ratio:
The ratio is used for valuing companies and to find out whether they are overvalued or undervalued.
Formula:Share Price/Earnings Per Share
Image Courtesy:Investing Caffeine
iv)EPS:
Earnings per share (EPS) can be defined as profits or losses per share.
Formula: Company's Profits or Losses/Total issued shares.
Image Courtesy: Economic Times
v)IPO:
Initial Public Offering refers to the first time a company offers its share for trading on a stock exchange.
Formula: Value of one share=Total paid-in capital/Total shares sold.
Image Courtesy:Crunchbase News
vi)Liquidity:
Liquidity means how quickly you can get your hands on your cash. In simpler terms, liquidity is to get your money whenever you need it
Image Courtesy:Kaufman Hall
vii) Portfolio:
Portfolio is simply the collection of all the investments an investor has made.
Image Courtesy:Investopedia
viii)Trading volume:
 The number of shares being traded on a given day is called trading volume.
Image Courtesy:IG
ix)Dividends: 
Dividend is a part of the profit distributed by a corporation among its shareholders by the means of its shares.
Image Courtesy:DNS Accountants
x)Volatility:
It refers to the degree of or the extent in fluctuation in the prices of the stock. Highly volatile stock witness abnormal highs and lows during the trading session, while low volatile stocks experience ups and downs to a lesser degree. 
Image Courtesy:Money
xi)Bull Market:
When stock prices in a market are generally rising, it is called a bull market.
Image Courtesy: International Adviser
xii)Bear Market:
The exact opposite of a bull market is a bear market – when the stock prices in the market are generally falling it is called a bear market.
Image Courtesy:Forbes

These are some basic terms an investor must know before entering the stock markets.

Disclaimer:We are not certified financial experts but the claims made in the blog are totally true.We will not be responsible for any kind of financial problems based on reading this blog.Investment in securities(stocks)market are subject to market risks, read all the related documents carefully before investing.

This is the third part of our Finance series.We intend to increase financial literacy through this series.

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  1. The PRIMITIVE INDIANMay 31, 2021 at 1:40 AM

    Good one ,

    ReplyDelete
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    1. EduRankersJune 29, 2021 at 11:30 AM

      Thank you for your feedback.We are happy you liked it.Loads of content coming your way!

      Delete

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