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Glossary - M
An upfront payment made by the customer to take a position in the market. His exposure limit is fixed based on the margin money brought in by him. The difference in the value of shares pledged and the loan amount sanctioned. The margin for physical shares is 50 percent (that is you can borrow only up to 50 percent of the values of your pledged shares. If one wants to borrow Rs.100, then it will have to pledge shares worth Rs.200. The margin for demat shares is35 percent. Margins are at the sole discretion of the bank and may even vary from scrip to scrip.
A notional profit or loss of a long or short position as compared to the current market price.
Total market value of the company on the stock exchange. Total number of shares multiplied by the official price quoted on the stock exchange.
Use to track money flow into and out of the markets. Positive cash flow can serve as an indicator that fund managers have cash to put into the markets at the next buying opportunity. Conversely, negative case flow may indicate that fund managers may need to liquidate some holdings to meet redemption requirements. Additionally, IPO's reduce market liquidity; however mergers increase market liquidity.
The minimum trading lot on a stock exchange.On compulsorily dematerialized shares for all classes of investors, the market lot is just one share.
It is the last sale price of a particular stock on the previous day.
An order where no price specification is mentioned at the time of placement and market prices apply. Authorization for a broker to buy or sell securities at the best price that can be negotiated at the moment.
It is the price a particular stock is currently selling for during the operating hours of the stock market.
A measure of the bullish or bearish attitude of the crowd.
The minimum number of companies, whose shares have to be offered as security for obtaining loans. For example, in case of IDBI Bank the shares to be offered as security should be of at least of two companies. It is in your interest to pledge the shares of an number of companies when you take a loan; if the value of some shares drop in the market they may be offset by the other shares which have risen in price. Banks also profitability of a number of companies.
Usually involves looking for stocks in a strong uptrend (high relative strength), strong earnings growth, and increasing earnings forecasts. In today's market, may include relative strength only.
The amount of money in circulation. The Reserve Bank of India attempts to control the growth of the economy by regulating the increase or decrease in money supply.
Mutual funds that invest in short -term securities.
A rolling set of averages calculated over a time series of values. A moving average represents data in a manner that smoothens fluctuations and highlights possible trends. Not for amateur investors. Moving averages are one way to view historical price levels. Moving averages take into account some number of price periods (a new period is added and the oldest is dropped from the calculation) to show average price over time. It is possible to weight more recent prices by linearly or exponentially smoothing the average lines. The linger the averaging period, the more lag you will see between the average and the most recent prices. The 10-day Moving Average (MA) is the average closing price for the past 10 days. Stocks are said to be in an uptrend when above their MA and in a downtrend when below. The most widely followed MAs are 50 days and 200 days. Long -term investors tend to look at the 200-day MA while active traders are more likely to pay attention to the 50-day MA. Many investors look at both. As a general rule, it's best to avoid stocks trading below both their 50 -and 200-day MAs.
Debt instrument issued by a state or local agency.
A portfolio of stocks, bonds or other securities administered by a team of one or more managers from an investment company who make buy and sell decisions on component securities. Capital is contributed by smaller investors who buy shares in the mutual fund rather than the individual stocks and bonds in its portfolio. The return on the funds holdings is distributed back to its contributors, or shareholders, minus various fees and commissions. This system allows small investors to participate in the reduced risk of large and diverse portfolio that they could not otherwise afford to build themselves. They also have the benefit of professional managers overseeing their money who have the time and expertise to analyze and pick securities. There are two types of mutual funds, open and closed ended. Units in closed -end funds, some of which are listed on stock Exchanges, are readily transferable in the open market and are bought and sold, like other stock. These funds do not accept new contributions from investors, but only reinvest the return on the existing portfolio. Open -end funds sells their own shares to investors, stand ready to buy back their old shares and are not normally listed in exchanges. Open-end funds are so called because their capitalization is not fixed; they issue more units as people want them. Many open-ended funds allow contributors extra perks, such as the ability to write cheques against their units. also there are several open ended mutual funds which are insurance linked. The mutual funds which are insurance linked. Its basically marketing with for an investor with limited funds and/or limited knowledge of the market.