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Many stocks also include voting. Bear terms as the bear market that is the market condition which shows and makes the investors to know that the economy is showing a downward trend.
American stock exchange amex stock exchange for certain us stocks not listed on the new york stock exchange nyse. A country might have several stock exchanges, and all of these exchanges put together form what we call the stock market. Pin On Quick Saves. View all posts by archivepdf. Your email address will not be published.
Save my name, email, and website in this browser for the next time I comment. Skip to content. Ownership of a company is determined by the number of shares a person owns divided by the number of outstanding shares; By yearning to educate yourself about how to invest and build wealth, Start today and improve your skills.
Published by archivepdf. Leave a Reply Cancel reply Your email address will not be published. Stock Market Index typically tracks the aggregated movement in the prices of all the shares listed in the stock market as compared to the previous day prices to determine the market performance.
It may also track the cumulative movement in the prices compared to the past prices of a hypothetical portfolio of a basket of securities belonging to a particular industry or collated and grouped based on market capitalisation. It serves as an indicator of changes in the stock market. The index serves as a benchmark for evaluating the active returns of a portfolio.
It serves as a reference against which to assess the performance of a portfolio. Initial Public offering is the initial offering or sale of securities to the public. Here the owners or private investors sell their ownership in the company and offer it for sale to the public. IPO is the route for the companies to raise capital for future growth and development. Initial Public Offering is one of the main reasons for the existence of the stock market.
Recommended reading: Detailed guide on IPO. Leverage in the stock market means borrowing capital to invest in more shares than one is financially capable of buying with the singular motive to boost profits.
Leverage means amplification of comparatively smaller investment force into a correspondingly greater profit. Leverage can result in exponential gains; however, it can also result in massive losses. Explore leverage products provided by Samco by clicking here. A margin account allows the investor to borrow money from the broker to buy additional securities. Trading on margin is leveraging funds to its utmost use by purchasing additional securities than one can afford.
Hence for a relatively smaller amount, you can buy a correspondingly greater amount of securities. However, like any leverage, it can result in massive profits but also can result in significant losses. Initial Margin is the amount that the buyer must transfer before he can borrow money from the broker or before the broker can lend him the money to buy additional securities. This is the mandatory amount that the buyer is obliged to transfer before he can buy more securities on margin.
Rs 1, Maintenance Margin is the minimum amount the buyer must maintain in order to keep the position open. Rs Rs , the balance left is Rs Hence there is a deficit of Rs 50, for the required maintenance margin. In such a case, the buyer must deposit additional funds to restore the account to the maintenance margin or liquidate certain positions in order to meet the maintenance margin requirements. If you do not meet the margin call, then the broker will sell off some open positions to bring the account to maintenance margin requirement.
Moving Average is the average price per share for a specific period of time. Some standard time frames are days, days and 50 days moving averages. Recommended reading: What is moving average in technical analysis? But the investor must cover his position before the close of the day. So if the price of the stock that the investor has shorted falls, the investor can buy the shares at a lower price than the price he had sold them and make a profit.
However, if the price of the stock that the investor has shorted rises, the trader must honour the obligation of buying back the shares before the clearing period irrespective of a higher price point and suffer a loss. Short-selling is based on the speculation that the market is bearish, and the prices of the shares will fall. The investor profits from declining prices of stock. Recommended reading: Beginners guide to short selling. It refers to rare occurrences wherein a market contains only potential buyers and potential sellers without both being present simultaneously.
It is a situation where the market is heading in only one direction. In such a case, the market makers quote only the bid price or only the ask price. Pyramiding is a method of leveraging the hiked up margin to increase the position size with the appraisal in the margin obtained by utilising the unrealised profits from the increment in the value of current holdings of the same security.
The investor who uses pyramiding uses the increased unrealised value of the current holdings to buy more of the same security. Growth stocks are considered to have the potential and the ability to outperform the market in the future. Growth companies have generated considerable, sustainable, and better-than-average returns in the market and are expected to continue providing substantial returns.
In simple words, growth stocks are backed by healthy and consistent earnings and robust performance in the past and are touted to continue their growth pattern in the future as well.
A value stock is a stock that the investor feels is trading at a market price below their intrinsic value. Value stocks are considered undervalued but are expected to reach its real inherent value. Value investing means uncovering the actual intrinsic value of the stocks through evaluation of financial statements, often ignored intangible assets, of the concerned company then develop the patience to wait for the prices to fall below their intrinsic value.
Investors purchase value stocks when they are trading below their intrinsic value and sell them when the prices reach their true worth. Intrinsic value is the net present value of all future cash flows expected to be generated through the lifespan of the business. Warren Buffet, the legendary investor, is the most successful practitioner of value investing.
Large-cap stocks are stocks of well-established companies with a market capitalisation above Rs 20, crores. Large-cap stocks are generally considered to be low-risk as they have a strong presence in the market, and have a history of providing potent and stable returns. Information about large companies is easily accessible. Most of the companies disclose timely information about the operations, products, expansion plans through media such as newspapers. Recommended reading: What are large cap stocks and top 7 large cap stocks to buy in India now.
Mid-cap stocks are stocks of companies with a market capitalisation between Rs 5, crores and 20, crores. Mid-cap stocks attract investors as they provide the possibility of earning exponential returns in the long-term. However, mid-cap companies are discrete about the internal operations of the company and expansion plans, as they endeavour to trump over the competition, and hence are furtive about the information of the company.
This makes it cumbersome for the investors to judge the potential of the stocks. Therefore, conservative investors stay away from such stocks. Recommended reading: What are mid cap stocks and top mid cap stocks to buy in India now. Most small-cap companies are early start-ups and entrepreneurial ventures that present the opportunity to earn astronomical returns.
Understandably they are companies with inconsistent returns and low revenues. Many of these companies can go bust. But at the same time, many such companies are unicorns that are trading abysmally below their intrinsic value.
The information about these companies is not readily available. Hence these small-cap stocks are a winner for investors with a long investment horizon and an appetite for high risks. Recommended reading: What are small cap stocks and best small cap stocks to buy in India.
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