Top Gainers
Gainers are the stocks that tend to close with a higher price than what they opened with/their previous close price in an intraday market. If they are a part of any indices, the market indices shoot up. Conversely, when market indices are rising, the possibility of there being more gainers than losers is higher. NSE India publishes the top gainers and losers of the market categorically and updates it on a real-time basis. They are expressed in absolute terms and percentage terms. The gainers are arranged in the list in descending order.
Top Losers
A security that loses value during the course of a particular trading day is called a loser. This is arrived at by comparing the price at the start of the trading day vis a vis the price of the security at the end of the day. The losers may be expressed in absolute terms or in percentage terms. If it were to be calculated in percentage terms, it will be arrived at as follows – (Current stock price – Previous closing price) / Previous closing price = Percentage loss. NSE India publishes the top losers of the market categorically and updates it on a real-time basis. They are expressed in absolute terms and percentage terms.
Square Off
Squaring off is a trading style that day traders use to make profit from the market volatility. The trader buys a number of stocks of one company and sells them off on the same day at a higher price usually, which gives the trader an amount of profit. Or vice versa.
Square off is a settlement style from the investor’s perspective, where all the shares purchased by the investor are entirely sold off too, most usually to make a profit from the change in price. It is also a squared off position when the trader sells off the stocks at a price, only to buy the same number of shares back at a lesser price than before. Squaring off helps to cut down on losses or help make profits on the current position.
Stop Loss
Stop-loss order which is also known as a stop order or stop market order is an order which is placed in advance to buy or sell a security when it reaches a certain price point. Stop-loss orders help to reduce or limit the loss of an trader on a position in the security. Stop loss orders can be used for both short-term as well as long-term trading.
Once the stop loss drops below the stop price, the stop loss order becomes the market order and is executed at the next available price. When the stop-loss order is placed, it is an indication by the trader to the agent to sell the security at a pre-set price limit, once the security reaches this limit. In the trading world, knowing financial terms like the stop-loss order is very important.
Candlestick Chart
Candlestick charts are used to display information about an asset’s price changes. Candlestick chart method of representation was popularly used in Japan in the 1700s before other forms of charts like the bar and point and figure charts were developed.
Candle charts are often used by traders to determine the changes in the price of the asset based on past patterns. It is one of the popular components of technical analysis which makes it possible for traders to interpret price information quickly.
Swing Trading
Swing trading is a form of trading that tries to focus on making small gains in medium to short-term trends over a particular period of time. These gains despite being smaller can provide a significant amount of returns annually as they are made consistently over time.
Swing traders use technical and fundamental analysis to look for trading positions and opportunities. You should also analyse the price trends and patterns.
Scalper
Scalpers rapidly enter and leave the stock markets, usually within seconds, using higher leverage rates to position larger-sized trades in hopes of generating greater profits from relatively minor price shifts.
In the sense of market supply-demand theory, a scalper often refers to a person who buys large amounts of in-demand goods at regular price, such as new appliances or event tickets, hoping that the goods will sell out.
Open Position
An open position means any established or entered trade that is yet to be closed with an opposing trade. An open position can arise after a buy, long position, sale, or short position. Usually, buy-and-hold traders have one or more open positions at any given point in time.
Bear Position
The bear position is a term that represents a short position applied to a financial guarantee. The position of the bear is an inverse of the position of the bull. A bear or short place is a bet against the price of rising or staying flat in a trade. A bear position aims to benefit from anticipating a decline in market values for such securities.
Capital Risk
Capital risk reflects the ability to lose part or all of capital in trading. It refers to the entire asset gamut that is not subject to a complete return guarantee for original capital.
When trading in stocks, non-governmental bonds, real estate, commodities, and other alternative assets, traders face capital risk.
Position Sizing
Position sizing points to the total number of units held by a trader in certain security. A trader’s risk-taking abilities and account size have to be necessarily considered by a financial planner or advisor when deciding on the position sizing.
Position sizing is referred to as the size of the position held by a trader with respect to a particular security or portfolio. It is also referred to as the amount of money being traded in a given asset.
Short Selling
Short selling is a trading practice speculating on the fall in the price of a stock or other securities. It's an innovative technique that only seasoned traders can take on.
Traders may use short selling as leverage, and investors or fund managers can use it as a hedge against the downside risk of a long position in the same or similar protection.
Limit Order
A limit order is a kind of an order to buy or sell a security at, or better than, a given price. The order will only be executed at the maximum price or a lower price for buy limit orders, while the order will only be executed at the limit price or higher for sale limit orders. This stipulation allows traders to monitor the rates they deal in better.
Spot Price
A spot price is the current market rate at which a specific asset—such as a product, security or currency — can be purchased/sold for immediate delivery. While spot prices are time-and-place-specific, when adjusting for exchange rates in a global economy, the spot price of most securities or commodities appears to be fairly uniform globally. Unlike the spot price, a futures price is a negotiated price for the asset's future delivery.
Current Price
The current price refers to the latest selling price for an exchange-traded stock, currency, product, or precious metal. It is the most reliable indicator on the present value of that securities.
In the case of a stock, the current price is quoted as 10% of the purchase value or face value. The current price of a listing of an investment portfolio reflects the value at a given date.
Break-Even Price
A break-even price refers to the price point at which an trader is neither at a profit nor at a loss. Technically, at the break-even price, the trader has covered up all costs, including the cost of the investment.
In stock market transactions, a break-even price is that at which a trader is neutral to the price, and may choose to sell to recover their costs. A trader does not incur a loss by selling at the break-even price.
Delivery Price
It is the price at which a party agrees to supply the underlying goods and at which a counterparty agrees to approve the delivery. The delivery price is specified in a futures contract traded on a registered exchange or an over-the-counter forward agreement. The delivery price shall be fixed in advance in the contract.
It shall be agreed on the day on which the futures or forward contracts are entered, not on the day on which the goods are actually delivered. Delivery price can also refer to the selling price of a stock in an option contract.
Entry Point
The entry point in trading refers to the price point, which is suitable for entering a trade. A trader determines the entry point based on a well-researched trading strategy which minimises trading risk and also removes any emotional decisions. Analysis and research will help in taking objective trading decisions.
Exit Strategy
An exit strategy can be defined as a contingency plan to liquidate or dispose of a financial asset once the predetermined event/circumstance for the asset has been met by a trader.
Traders set the point for the performance of the assets at which they will have to sell the asset. Meaning, the trader will already have set a point at which they will sell the asset for gain and a point at which they will sell for a loss. This exit strategy can limit the risk involved and enhance the trading capabilities of the trader.
Volatility
Volatility measures the rate of change in the price of a security being traded on the stock market. This change is the major component of the risk talked about in trading that may define how much money could be gained in parallel to how much will be lost.
Consolidation
In technical analysis, consolidation is referred to the time period when a stock does not cross its support and resistance lines. Instead, the stock movement sticks to a well-defined pattern that doesn’t rise over its previous high price or doesn’t fall under its recent lowest price in the past. This range between support and resistance lines is induced by trader indecisiveness or some stagnation due to various factors.
Bull Market
A bull market is a situation of securities group's financial market in which prices rise or are expected to rise. The term "bull market’ is most commonly used to refer to the stock market, but it can be used with anything tradeable, such as real estate, bonds, currencies, and commodities.
Because securities prices rise and fall substantially continuously during trading, the term " bull market" is typically reserved for long periods of raising a large portion of security prices. Over months or even years, bull markets continue to last.
Liquidity
Liquidity explains how easily an asset or share can be bought or sold on the market at a price that represents its intrinsic value. In other words, liquidity means the ease with which you can convert a financial instrument to cash.
Cash is, globally, considered the most liquid asset, whereas tangible assets are all relatively illiquid, such as real estate, fine art, and collectibles. Many financial assets fall on the liquidity continuum at different places, ranging from equities to partnership units.
Futures
A futures contract is a predetermined contract on the present date made between two parties that don’t know each other, to transact a commodity or a financial instrument at a set price on a future date. This contract comes into force despite the present circumstances. The commodity’s delivery and payment is made on the futures date at the predetermined price. A buyer in such a contract is called ‘having a long position’ or in the ‘long,’ while the seller is said to be in the ‘short.’
Options
Options are derivative contracts that provide its owners the right to buy or sell securities at a predetermined price (i.e. the strike price) within a certain time period. This time period comes with a specific expiration rate. The trader pays for the option or the right to make the transaction, though they have no obligation to do so within the given period of time.
Put options are traded on various underlying assets, such as stocks, currencies, bonds, commodities, futures, and indexes.
Call Option
A call option is a contract that gives the buyer the rights but not an obligation to buy a commodity, asset, or security at a specified price and within a specified time. This commodity or stock is an underlying asset and the specified price is called the strike price.
The specified time within which a sale is to be made is its expiration date before which the buyer has to buy the commodity if he so desires. The commodity through this call option contract can be bought for speculation or sold for income.
Put-call Ratio
The put call ratio is a financial ratio that can be used as an indicator of the relative trading volume of put options to call options. A put is a derivative instrument that gives the holder of security the right but not an obligation to sell the bond or share known as an underlying asset or security. Similarly, a call is an instrument or financial contract that gives the holder the right but not an obligation to buy the underlying asset.
The put call ratio helps the traders to understand whether a recent rise or fall in the market is excessive and decide if the time has come to take a contrarian call. This is why the put-call ratio is also known as a contrarian indicator.
Open Interest
Open interest is the total number of outstanding contracts that are not settled for an asset and held by the market participants at the end of the day. Open interest measures the total level of activity in the futures market and provides a clearer picture of the options trading activities and if the money flow in the market is increasing or decreasing.
Open interest indicates the liquidity of the market and is very important for options traders, as it helps them to understand the liquidity of options in the market.
India VIX
In the year 2010, the India VIX was launched by the National Stock Exchange (NSE). It is expressed in the form of an annualized percentage, not as a number like market indices. The computation methodology of CBOE has been created as the base of the India VIX. The relation between the volatility of the market and India VIX is direct i.e. with the spike in the India VIX, there is an expectation of increased volatility in the markets in the near future.
Trading Psychology
Trading psychology refers to the emotions and state of mind, which help determine success or failure in securities trading. Trading psychology reflects different aspects of the character and behaviour of a person which influence their trading acts. Trading psychology may be as critical in assessing trading performance as other qualities such as awareness, experience, and ability.
Risk-taking and discipline are two of the most important aspects of trading psychology because the execution of those aspects by a trader is critical to the success of its trading strategy. Although fear and greed are the two most widely recognized emotions associated with the psychology of trading, hope and remorse are other emotions that influence trading actions.
