Every term is defined twice: once the way a filing would put it, and once the way somebody would explain it to you across a table. The second one is usually the one that sticks.
Showing 50 terms
A single number summarising a basket of stocks, in India generally weighted by free-float market capitalisation.
A weighted average is not the typical stock. The NIFTY can close green on a day when most of its constituents fell, because a handful of heavyweights outvote everything else.
The statistical properties an index has by virtue of being a weighted average of many stocks rather than a single one.
Lower volatility, milder gaps, stronger mean reversion, almost no company-specific risk. Different enough to justify genuinely different rules.
The body that applies an index’s rules and decides inclusions and exclusions.
Index membership follows a written rulebook plus judgement, not simply company size.
A maintained bookkeeping number by which the aggregate weighted capitalisation of an index’s constituents is divided, adjusted whenever the basket or the share counts change so that the level stays continuous.
It is why an index does not jump when a constituent is replaced. The continuity of the line is manufactured on purpose, which is worth knowing before treating a long index chart as one measurement.
A fund that mechanically holds every constituent of an index in its weightings.
You will never beat the index. You will also never underperform it by much, and you pay almost nothing.
Periodic revision of index constituents and weights, forcing index funds to trade.
Mechanical buying and selling on a known date by participants who have no choice.
The scheduled replacement of index constituents that no longer meet the provider’s published eligibility rules, with the divisor adjusted so the level does not jump.
A long index chart is therefore a chart of a slowly changing basket drawn as one unbroken line — and the transition itself is a mechanical flow in the affected names, not an opinion about them.
Commodity Channel Index — how far price has deviated from its own average, expressed in units of mean deviation.
Unbounded, so ±100 are conventions rather than limits. Its better use is spotting the start of a strong move as it crosses +100 from below.
A security interest created over a company’s assets in favour of a lender, recorded against that company in the public register of charges.
A dated, public record of who lent to which entity and what was pledged. Unsecured borrowing creates no charge, so the register is one side of the picture rather than all of it.
The same index basket computed with dividends reinvested, as against the price index, which excludes them.
Over weeks the difference is invisible; over a decade it is two different-looking charts. Any statement that “the index went nowhere” is being made on the series that throws the dividends away.
A momentum oscillator that weights price changes by the rupee value traded, bounded 0 to 100.
RSI with the money attached. Where RSI asks whether it went up, this asks whether anyone paid for it to.
Average Directional Index — a measure of trend strength, not direction, on a 0–100 scale.
The indicator that tells you whether to trust your other indicators.
The index or standard against which portfolio performance is measured.
Only meaningful if it reflects what you would otherwise have done. Use total return versions.
How much a stock moves for a given move in the index.
Beta 1.6 means a 10% index fall usually takes it down 16%. That is leverage, not skill.
A regulatory cap on how far a stock or index may move in a single session.
A stock stuck at its lower circuit has no buyers at all — your sell order simply queues.
Holding most of a portfolio in broad index funds with a smaller actively chosen portion.
Lets you find out whether you can pick stocks without your outcome depending on it.
A contract whose value is derived from an underlying asset such as a stock or index.
A bet on something else’s price. Leverage makes it fast in both directions.
The tendency for company-specific surprises to partly cancel out within an index, leaving it less volatile than its constituents.
It is why mean reversion has a genuine basis on an index and a shaky one on a single stock.
Exchange-Traded Fund — an index fund that trades on the exchange like a share.
Needs a demat account and buys at a live price rather than end-of-day NAV.
A common nickname for a volatility index.
Misleading, because it implies direction. It measures how much movement is priced, and rises just as readily on a violent rally.
The scheme categories SEBI mandates, each specifying what a fund must hold — largecap, midcap, smallcap, flexicap, multicap, ELSS, hybrid and index among them.
The label is a legal constraint on holdings, not marketing, which is what makes thousands of schemes comparable. It also fixes the only valid comparison: same category, against the fund's own declared benchmark.
An index of expected 30-day NIFTY volatility, derived from options prices.
The fear gauge. Normally in the low teens; it tripled during the March 2020 crash.
An exchange-traded fund listed on an Indian exchange that tracks an overseas index, bought through an ordinary demat account.
The simplest of the three routes abroad. Liquidity can be thin, and the price sometimes trades at a noticeable premium to what it holds.
The proportion of a company’s shares an index treats as publicly available, used to scale its contribution to a free-float weighted index.
In a market with large promoter holdings this can be a small fraction, so a company’s index weight is often far below what its market capitalisation suggests. The company is big; the part the index counts is not.
Measures of how many individual stocks are participating in a move, as distinct from what the index level is doing.
India in 2018 is the clean domestic example: the NIFTY at new highs while most listed stocks were in their own bear market. It tells you what kind of market you are in, not what to do on Tuesday.
Weighting index constituents by their free-float market capitalisation.
An unlabelled momentum strategy — it automatically holds more of whatever has risen.
An index of 50 large NSE-listed companies, weighted by free-float market capitalisation.
The default measure of "the Indian market". A weighted average, so the biggest names dominate it.
Daily exchange data showing how each category of participant is positioned across index and stock derivatives.
Cash selling alongside a growing long futures position is a different story from cash selling alongside growing shorts. Published free, read by almost nobody.
A periodic check of whether your approach is actually working, measured against a broad index over a sample long enough to mean something.
The failure is not underperforming; it is continuing for years without ever measuring. Ten hours a week for 1% of outperformance on a small portfolio is a poor hourly rate.
A stock’s performance measured against a benchmark index rather than in absolute terms.
Keeps working in a falling market, where the winner is simply whatever falls least.
A plot of a stock's price divided by an index's price, rebased to 100 at the start of the measurement period.
The direction is the entire signal; the level is arbitrary because it depends on when you started.
Relative Strength Index — an oscillator measuring the ratio of average gains to average losses over N periods.
Measures how one-sided recent moves have been. Overbought means strong, not doomed.
The administrative grouping of listed companies into industries by an index provider or exchange.
A label, not an economic statement. Two companies in one sector can share nothing but the word.
The BSE’s index of 30 established companies, with continuous data back to 1979.
India’s oldest index and the one on the evening news.
An index built on a rule other than market capitalisation.
A factor tilt in index-fund clothing. The name is marketing; the method is a published, mechanical rule you can read.
A corporate event — demerger, buyback tender, delisting offer, rights issue or index change — that creates a mechanical mispricing independent of business quality.
The terms are published, the timeline is fixed and the outcome is largely arithmetic. They persist because they are boring, small and time-limited, which keeps large funds away.
A breadth measure counting how many stocks rose against how many fell in a session.
An index up while decliners outnumber advancers is a rally carried by a handful of heavyweights. Sustained, that is the classic warning that the typical stock has already turned.
Return above what a stock’s market sensitivity alone would explain.
The genuinely valuable part. Everything else is just amplification of the index.
The difference between the futures price and the spot price of the same underlying.
The reason a headline of “GIFT Nifty up 110 points” can describe a flat open. Before treating the gap between two prices as information, check they are the same instrument — the carry alone can be a hundred index points.
The maximum price at which a scheduled formulation may be sold, computed by the National Pharmaceutical Pricing Authority as the simple average of the prices to retailer of brands above a 1% share of that formulation, plus a notified 16% retailer margin.
It is revised annually against the wholesale price index — an index with no connection to what the company paid for its active ingredient. That asymmetry is the whole structural feature of price control.
The exposure created when an asset is priced in a currency other than the one you spend in; your rupee return is roughly the asset return plus the currency move.
A US index up 10% with the rupee strengthening 6% leaves you about 4%. The asset did the same thing either way — which is why currency is a second exposure, not a technicality.
The portion of shares actually available for public trading, excluding promoter and locked-in holdings.
The shares that genuinely trade. It determines liquidity and index weight.
The move of an SME-platform company to the main exchange board, once it meets size, profitability and shareholder-count criteria.
The genuine bull case for an SME holding — better liquidity, wider coverage, index eligibility. It is also uncommon and slow, so it is not something to rely on when you buy.
A breadth measure counting stocks making fresh 52-week highs against those making fresh 52-week lows.
In a healthy advance new highs vastly outnumber new lows. Expanding new lows while the index still rises means damage is spreading beneath the surface.
NSE’s exchange at GIFT City in Gandhinagar, operating inside an International Financial Services Centre and regulated by the IFSCA rather than by SEBI.
Offshore for regulatory purposes while sitting in Gujarat, which is how a dollar-denominated contract on India’s benchmark index can trade around the clock when the domestic market cannot. It keeps its own holiday calendar, so it sometimes trades when the Nifty does not.
Settlement of a derivative contract by delivery of the underlying shares against cash, rather than by paying the cash difference.
It takes every single-stock future open at expiry and every single-stock option that finishes in the money, while index contracts stay cash-settled — which is why the two behave so differently in the final week. A cheap option finishing marginally in the money becomes an obligation for the full strike price times lot size.
Portfolio Management Service — discretionary management of a portfolio held in your own name.
A full fee structure needs roughly three to four points of annual outperformance just to match an index fund.
How much it costs, in money and in time, to undo a commitment — transaction costs, price impact, any load or penalty, the tax event crystallised, and whatever a lock-in prevents you doing.
Deliberation should be proportionate to this, not to the amount involved. A ₹15 lakh index fund purchase can be undone on Tuesday; ₹3 lakh of booking money on an under-construction flat cannot be undone at any price you would accept.
Risk arising from one company rather than from the market — one promoter, one auditor, one large customer.
The asymmetry that justifies different rules for stocks and indices: an index cannot go to zero and an individual stock can.
The annualised return on cash flows that went in at different times.
The only honest measure of a SIP. Your app’s absolute return is not comparable to an index’s annual return.