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Finance & Trading Glossary

Plain-language definitions of the stock-market, mutual-fund and trading terms you'll meet as an investor. General educational information, not advice.

Browse terms A–Z

A

AMC (Annual Maintenance Charge)

A yearly fee a depository participant charges to maintain your demat account.

AIF (Alternative Investment Fund)

A privately pooled investment vehicle (Category I, II or III) for sophisticated investors, regulated by SEBI.

ASBA

Application Supported by Blocked Amount — the IPO application method where money stays blocked in your bank until allotment.

B

Bear Market

A prolonged period of falling prices and pessimism in the market.

Beta

A measure of how much a stock moves relative to the overall market; above 1 means more volatile than the market.

Bonus Issue

Free additional shares given to existing shareholders in a set ratio, from company reserves.

Brokerage

The fee a broker charges for executing a buy or sell order.

Bull Market

A prolonged period of rising prices and optimism in the market.

C

Circuit Limit

The maximum percentage a stock or index can move in a day before trading is paused.

Contract Note

The legal record of trades executed for you on a given day, with charges shown.

Corporate Action

A company event such as a dividend, bonus, split, rights issue or buyback that affects its shares.

D

Demat Account

An account that holds your shares and securities in electronic form with a depository (NSDL/CDSL).

Delivery Trading

Buying shares and holding them in your demat account, rather than squaring off the same day.

Derivative

A contract (future or option) whose value is derived from an underlying asset such as a stock or index.

Dividend

A share of a company's profit paid out to shareholders.

E

Equity

Ownership in a company represented by its shares.

ETF (Exchange-Traded Fund)

A basket of securities that tracks an index or theme and trades on the exchange like a share.

Expense Ratio

The annual percentage a mutual fund or ETF charges to manage your money.

F

F&O (Futures & Options)

Derivative contracts used to hedge or speculate; they carry leverage and higher risk.

Face Value

The nominal value of a share as stated by the company, often different from its market price.

FII / DII

Foreign and Domestic Institutional Investors — large players whose flows influence the market.

G

GTT (Good Till Triggered)

An order that stays active until your chosen price condition is met or it expires.

H

Hedging

Taking an offsetting position to reduce the risk of an existing investment.

I

Index

A benchmark like the Nifty 50 or Sensex that tracks a group of representative stocks.

Intraday Trading

Buying and selling the same security within a single trading day.

IPO (Initial Public Offering)

The first sale of a company's shares to the public to raise capital.

ISIN

A unique 12-character code that identifies a specific security.

L

Large / Mid / Small-cap

A classification of companies by market capitalisation; larger tends to be steadier, smaller can grow faster with more risk.

Limit Order

An order to buy or sell at a specific price or better.

Leverage

Using borrowed funds or margin to increase position size — it magnifies both gains and losses.

M

Margin

The money or collateral you must keep to take a leveraged or derivative position.

MTF (Margin Trading Facility)

A facility to buy shares by paying only part of the value, with the broker funding the rest at interest.

Mutual Fund

A professionally managed pool that invests many investors' money in stocks, bonds or other assets.

N

NAV (Net Asset Value)

The per-unit price of a mutual fund, calculated at the end of each trading day.

NFO (New Fund Offer)

The launch period during which a new mutual fund scheme is first offered.

Nifty 50

The NSE benchmark index of 50 large Indian companies.

Nominee

The person you designate to receive your holdings in case of death.

O

Option (Call / Put)

A contract giving the right, not the obligation, to buy (call) or sell (put) at a set price by a date.

P

P/E Ratio

Price-to-Earnings — a stock's price divided by its earnings per share, a common valuation gauge.

PMS (Portfolio Management Service)

A professionally managed, personalised portfolio for larger investors, regulated by SEBI.

Pledge

Offering your securities as collateral to get margin for trading.

R

Rights Issue

An offer letting existing shareholders buy more shares, usually at a discount, in proportion to their holding.

S

SIP (Systematic Investment Plan)

Investing a fixed amount in a mutual fund at regular intervals to average cost over time.

Sensex

The BSE benchmark index of 30 large companies.

STT (Securities Transaction Tax)

A government tax levied on the purchase and sale of securities.

Stop Loss

An order that automatically exits a position at a set price to cap your loss.

SWP (Systematic Withdrawal Plan)

Withdrawing a fixed amount from a mutual fund at regular intervals, the opposite of a SIP.

T

T+1 Settlement

The Indian cycle where trades settle one working day after the transaction.

V

Volatility

How sharply a price moves up and down over time; higher volatility means higher risk.

Y

Yield

The income (such as dividend or interest) from an investment expressed as a percentage of its price.

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Good to Know

Glossary — Frequently Asked Questions

Yes — it is free and open to everyone, with no login. It is general educational information, not investment advice.

We add and refine terms regularly as products and regulations evolve.

Follow the links to our Knowledge Center articles, or ask your PCJ Relationship Manager for a plain-language explanation.

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