An option is a derivative that gives the owner the right to buy or sell securities at an agreed upon price within a certain period of time. Specifically, options are contracts that grant the right, but not the obligation to buy or sell an underlying asset at a set price on or before a certain date. [...]
Arbitrage is basically buying a security in one market and simultaneously selling it in another market at a higher price, profiting from the temporary difference in prices. This is considered riskless profit for the investor/trader. In the context of the stock market, traders often try to exploit arbitrage opportunities. For example, a trader may [...]
Intraday trading refers to day-based trading, where traders open and close their positions on the same day. This involves taking advantage of market volatility to make immediate money. It also helps traders prevent overnight losses caused by events that surface after the markets have closed. Wealth management Invest only what [...]
Stock prices change everyday by market forces. By this we mean that share prices change because of supply and demand. If more people want to buy a stock (demand) than sell it (supply), then the price moves up. Conversely, if more people wanted to sell a stock than buy it, [...]
Volume is simply the total amount of shares traded for the day, which includes both buy and sell orders. You can determine the daily trading volume on your own — all transactions are publicly available — by calculating the total amount of shares traded. Illiquid refers to the state of [...]
Common stock and preferred stock are the two main types of stocks that are sold by companies and traded among investors on the open market. Each type gives stockholders a partial ownership in the company represented by the stock. Despite some similarities, common stock and preferred stock have some significant [...]
Introduction Financial ratio analysis is the process of calculating financial ratios based on financial statements to gain meaningful information about a company. They are used to assess a company’s liquidity, growth, margins, profitability, rates of return, valuation, and more. Balance Sheet, Income statement, and cash flow statement are commonly used [...]
What is a ‘Dividend’? A dividend is a distribution of a portion of a company’s earnings, decided by the board of directors, to a class of its shareholders. Dividends can be issued as cash payments, as shares of stock, or other property. A company’s net profits can be allocated to shareholders via [...]
Key financial terms used in stock market Basic EPS: – This is nothing but Earnings per share. Diluted EPS: – If all the convertible securities such as convertible preferred shares, convertible debentures, stock options, bonds etc. are converted into outstanding shares then the Earnings per share is called Diluted earnings [...]
Two major stock exchanges in India are the ‘Bombay stock exchange’ and the ‘National stock exchange’. Bombay Stock Exchange (BSE) Bombay stock exchange is an Indian stock exchange located at Dalal street, Mumbai, Maharashtra. It was established in 1875 and is Asia’s oldest stock exchange. It is the world’s fastest [...]