Finance

A basic glossary of share market 

It is better to understand the meaning and significance of the following terms in the stock market. 

Margin trading – Some investors will buy stocks that are far away from their budget. It is because of the margin trading methodology wherein the brokerages will help them by lending the extra amount needed to buy the stocks. However, they would have to repay the borrowed money soon after the trading session ends.

Odd lot – If you are about to buy stocks, mostly you will not buy one or two at once. You will go for a bunch of shares. When you are buying shares in an IPO, there will be a restriction to buy stocks only in lots of a predefined number of shares. However, this will not be there if you buy in live markets. But there is a system of buying shares in lots consisting of two categories of shares. One will consist of a round 100 shares and the other will have any number of shares other than the multiples of 100. If you buy shares in lots with a number less than or more than a multiple of 100, you are buying an 碎股. Immature investors are considered to be buying shares in odd lots. However, there are no big impacts of these lot counts on your stock market success.

Stock Quote – If you look for stock prices of any companies on Google, you will get a decimal value with some more information about the condition of the stock. The whole indication is known as a stock quote. A stock quote will consist of the current value of the stock, the value at the end of the previous day, the value at the beginning of the current trading day, the difference between the previous closing price and current price, and much more. You could also get to know the performance of the stock for the past year.

Moving Average – There will be deviations in the stock price with time for all companies listed in the exchange. However, if you look closely, you could assess an average amount of deviation happening in a particular stock over a period. This deviation is the moving average of the stock that could predict the future changes in its value.

Round lot – As the name suggests, the number of shares contained in these lots will be a round value which is a multiple of hundred. Long-term and intellectual investors would consider buying stocks in round lots.

Rights issue – At certain times, public companies will need some quick money. If they decide to go with a second IPO, it will take a long processing time. So, they can choose to do a rights issue. In this case, they will provide some new shares open to all the existing shareholders. However, the price of these new shares will not be the same as that of the current value. It will be lower than the original value to tempt the shareholders to buy them.

Related Articles

Back to top button
Close
Close