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Stock market glossary

Every trading and investing term you’ll meet — explained in plain English, with no jargon. 45 definitions and counting.

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Bear market: A sustained fall in prices, often defined as a 20%+ drop from recent highs, driven by pessimism.
Bid: The highest price a buyer is willing to pay right now.
Blue chip: A large, well-established, financially sound company considered relatively stable.
Bonus share: Extra shares given free to existing shareholders in proportion to their holding.
Breakout: When price moves decisively through a support or resistance level, often on higher volume.
Bull market: A sustained rise in prices and optimism across the market.

Candlestick: A chart element showing the open, high, low and close of a period in one shape.
Capital gain: The profit made when you sell an asset for more than you paid.
Circuit breaker: An exchange rule that halts or limits trading after a large price move to curb panic.

Demat account: An account that holds your shares electronically, like a bank account for stocks.
Diversification: Spreading investments across many assets or sectors to reduce risk.
Dividend: A share of a company’s profits paid to shareholders, usually in cash.
Dividend yield: Annual dividend divided by share price, expressed as a percentage.

EPS: Earnings per share — a company’s profit divided by its number of shares.
ETF: Exchange-traded fund — a basket of assets that trades like a single stock.
Ex-dividend date: Buy before this date to be eligible for the upcoming dividend.

Fundamental analysis: Valuing a company by studying its business, earnings, debt and growth.

Index: A basket of stocks used to measure a whole market in one number, e.g. NEPSE Index or NIFTY 50.
IPO: Initial Public Offering — a company’s first sale of shares to the public.

Leverage: Using borrowed money (margin) to control a larger position; it magnifies gains and losses.
Limit order: An order that executes only at your chosen price or better.
Liquidity: How easily an asset can be bought or sold without moving its price much.
Long position: Buying a stock expecting its price to rise.

MACD: Moving Average Convergence Divergence — an indicator of momentum and trend shifts.
Margin: The deposit required to open a leveraged position.
Margin call: A demand to add funds when losses erode your margin below a required level.
Market cap: A company’s total value: share price times number of shares outstanding.
Market order: An order that executes immediately at the best available price.
Moving average: A line that smooths price over a period to reveal the trend.

P/E ratio: Price-to-earnings — share price divided by earnings per share; a basic valuation measure.
Paper trading: Practising trades with virtual money and real prices — zero financial risk.
Portfolio: The full collection of investments a person or fund holds.

Resistance: A price ceiling where sellers repeatedly appear and cap a rise.
Risk/reward ratio: The reward you aim for versus the risk you take on a trade, e.g. 1:2.
RSI: Relative Strength Index — a 0–100 momentum gauge; above 70 overbought, below 30 oversold.

Short position: Selling a borrowed stock expecting its price to fall, to buy it back cheaper.
Slippage: The difference between the expected price of a trade and the price it actually fills at.
Stop-loss: An order that exits a trade automatically to cap your loss.
Support: A price floor where buyers repeatedly step in and stop a fall.
Swing trading: Holding trades for days to weeks to capture a larger price swing.

Technical analysis: Studying price, volume and patterns on charts to time entries and exits.
Trailing stop: A stop-loss that follows price as a trade moves in your favour to lock in profit.

Volatility: How much and how quickly a price moves; higher volatility means bigger swings.
Volume: The number of shares traded in a period; shows conviction behind a move.

The fastest way to remember these terms is to use them. Practise free on StockYatra with 10,000 virtual coins.