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Stock Market Glossary

The fee charged by an investment adviser or broker for buying or selling securities as an agent on behalf of a client.

Product used for commerce that are traded on a separate, authorized commodities platform. Commodities include agricultural products and natural resources.

Securities that represent part ownership in a company and generally carry voting privileges. Common shareholders may be paid dividends, but only after preferred shareholders are paid. Common shareholders are last in line after creditors, debt holders and preferred shareholders to claim any of a company’s assets in the event of liquidation.

Contract Note is a confirmation of trades done on a particular day on behalf of the client by a trading member. It imposes a legally enforceable relationship between the client and the trading member with respect to purchase/sale and settlement of trades. It also helps to settle disputes/claims between the investor and the trading member

A security (bonds, debentures, preferred stocks) by an issuer that can be converted into other securities of that issuer are known as convertible securities. The conversion usually occurs at the option of the holder, but it may occur at the option of the issuer.

A form of business organization created under provincial or federal laws that has a legal identity separate from its owners. The shareholders are the corporation’s owners and are liable for the debts of the corporation only up to the amount of their investment. This is known as limited liability.

The maximum price advance or decline permitted for a futures contract in one trading session compared to the previous day’s settlement price

An order that is valid only for the day it is entered. If the order is still outstanding when the market closes, it will be purged overnight.

De-materialization is the process by which physical certificates of an investor are converted to an equivalent number of securities in electronic form and credited to the investor’s account with his Depository Participant (DP).

A long-term debt instrument issued by corporations or governments that is backed only by the integrity of the borrower, not by collateral. A debenture is unsecured and subordinate to secured debt. A debenture is unsecured in that there are no liens or pledges on specific assets.

A stock purchased from a company that has maintained a record of stable earnings and continuous dividend payments through periods of economic downturn.

The removal of a security’s listing on a stock exchange. This is done when the security no longer exists, the company is bankrupt, the public distribution of the security has dropped to an unacceptably low level, or the company has failed to comply with the terms of its listing agreement.