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Stock Market & Investing Glossary for Indian Investors
60+ terms covering options, risk, valuation, and portfolio management, explained in plain English with real investing examples from Indian markets.
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Beta
A measure of how much a stock moves relative to the overall market (like Nifty).
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Capital Allocation
Deciding how to divide your total investment money across different opportunities.
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Concentration Risk
The danger of having too much of your money in a single stock or sector.
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Diversification
Spreading your money across different stocks, sectors, or asset classes to reduce risk.
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Drawdown
The percentage drop in your investment from its highest point to its lowest point.
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EPS (Earnings Per Share)
A company's net profit divided by its total number of shares. How much each share earns.
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Equity
Ownership interest in a company, represented by shares of stock.
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Futures
A contract to buy or sell an asset at a fixed price on a specific future date.
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Hedging
Taking a trade specifically to reduce the risk of an existing investment.
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Leverage
Using borrowed money or derivatives to control a larger position than your cash allows.
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Limit Order
An order to buy or sell a stock only at a specific price or better.
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Margin
Borrowed money from your broker to trade larger positions than your cash allows.
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Market Capitalization
The total value of a company's shares in the stock market.
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Market Order
An order to buy or sell a stock immediately at the best available current price.
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Options
Contracts that give you the right, but not the obligation, to buy or sell an asset at a set price.
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P/E Ratio (Price-to-Earnings)
A valuation ratio that compares a company's current share price to its earnings per share.
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PEG Ratio
The P/E ratio divided by the earnings growth rate. A valuation metric that accounts for growth.
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Portfolio Protection
Strategies and tools used to guard your investments against large losses.
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Position Sizing
Deciding exactly how much money to put into a single trade or investment.
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Risk
The possibility that your investment loses value or does not perform as expected.
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Risk Management
The practice of identifying, measuring, and controlling potential losses in your portfolio.
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Shares
Units of ownership in a company that can be bought and sold on stock exchanges.
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Short Selling
Selling a stock you do not own, betting its price will fall so you can buy it back cheaper.
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Standard Deviation
A statistical measure of how much a stock's returns vary from its average return.
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Stop Loss
A preset price at which your broker automatically sells a stock to limit your loss.
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Stop Loss vs GTT
Orders used to exit a trade automatically at a specific price to limit losses.
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The Greeks (Delta, Gamma, Theta)
Variables that measure the sensitivity of an option's price to different factors.
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Time Decay (Theta)
The loss in value of an option as it gets closer to its expiry date.
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Valuation
The process of estimating what a company or stock is actually worth.
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Volatility
A measure of how much and how fast a stock's price moves up and down.
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