GLOSSARY
Trading Terms, Explained
The most common Indian stock market terms in plain language.
Bull Market
A market where prices are rising or expected to rise.
Bear Market
A market where prices are falling or expected to fall.
Candlestick
A chart format showing open, high, low, close prices in a single bar.
Demat Account
An account that holds shares in dematerialised (electronic) form.
IPO
Initial Public Offering — when a company first offers shares to the public.
Nifty 50
The NSE benchmark index of India's 50 largest listed companies.
Sensex
The BSE benchmark index of 30 major Indian companies.
Stop Loss
A pre-set price to exit a losing trade and limit risk.
Support
A price level where buying interest historically appears.
Resistance
A price level where selling interest historically appears.
Swing Trading
Holding trades for several days to capture short-term moves.
Intraday Trading
Buying and selling within the same trading day.
Options
Derivatives giving the right (not obligation) to buy/sell at a fixed price.
Call Option
An option giving the right to buy the underlying.
Put Option
An option giving the right to sell the underlying.
Premium
The price paid to buy an options contract.
IV
Implied Volatility — market expectation of future price swings.
Theta
Time decay of an option's value as expiry approaches.
Lot Size
The minimum quantity for trading a derivative contract.
Position Sizing
Calculating how many shares/contracts to trade based on risk.
Risk-to-Reward
Ratio comparing potential loss vs potential gain on a trade.
Trailing Stop
A stop-loss that moves with price to lock in profits.