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Market Intelligence › Basic Terminologies
Share, index, demat, IPO, circuit — the first 50 terms every new trader needs
Published by The Retail Trader · AUG 01, 2026 · Market Basics
The market has its own language, and until you understand it, every chart and every news headline feels like a puzzle. This journal covers the beginner terms you meet every day, from a Nifty quote to your demat account — in plain English, with examples.
First, the terms that describe the market's plumbing:
• Share (Stock) — A small piece of ownership in a company. Example: if you hold 10 shares of TCS, you own a very small part of TCS.
• Equity — Ownership capital. The equity market is where shares of companies are bought and sold.
• Stock Exchange — The platform where buyer and seller orders are matched with each other. India has two major exchanges: NSE and BSE.
• NSE — National Stock Exchange, whose flagship index is the Nifty 50 and where the highest F&O volume trades.
• BSE — Bombay Stock Exchange, whose flagship index is the Sensex; it is the oldest exchange in Asia.
• SEBI — Securities and Exchange Board of India, the market regulator. Brokers, exchanges and listed companies all operate within its rules.
• Broker — A SEBI-registered member through whom your order reaches the exchange; in return, they charge brokerage.
• Demat Account — The account where your shares are held in electronic form, just like money in a bank account.
• Trading Account — The account through which you place orders. The demat account holds, the trading account operates.
• Depository — NSDL and CDSL, the two institutions that keep the record of all demat holdings. Your broker is their Depository Participant (DP).
• Ticker / Symbol — The short name of a stock that you type into the terminal. Example: RELIANCE, INFY, HDFCBANK.
• ISIN — A unique 12-character code for every security, which stays the same even if the exchange changes.
Now the terms that tell you where a company fits in the market:
• Index — A basket of several stocks that produces a single number, so the mood of the whole market or a sector is visible at a glance.
• Nifty 50 — NSE's index of 50 large companies; the most common benchmark for India's large-cap market.
• Sensex — BSE's 30-company index, the oldest Indian benchmark.
• Bank Nifty — An index of banking stocks only. It is more volatile than the Nifty, which is why traders treat it separately.
• Sectoral Index — An index of stocks from a single industry, such as Nifty IT, Nifty Auto, Nifty Pharma, Nifty FMCG.
• Market Capitalisation — Share price × total shares. It tells you how big the company is in the market.
• Large Cap / Mid Cap / Small Cap — A ranking by market cap. In SEBI's classification, the top 100 companies are large cap, 101-250 are mid cap, and everything after that is small cap.
• Blue Chip — A large, old, financially strong company with a good track record across the whole business cycle.
• Free Float — The shares available to the public for trading (excluding promoter and locked holdings). Index weights are built on this.
• Weightage — A stock's share in the index. Example: if a stock has a higher weight, a 2% move in it will move the index the most.
• Sector — A group of companies doing the same kind of business: IT, banking, pharma, auto, metal, energy.
How the trading day runs, and when money and shares actually change hands:
• Trading Hours — The normal equity session runs from 9:15 AM to 3:30 PM (IST).
• Pre-Open Session — The 9:00 to 9:15 AM window in which orders are collected and an opening price is discovered.
• Opening Price — The first traded price of the day. It can be quite different from the previous day's close — that difference is called a gap.
• Closing Price — The official close of the day, which is usually the weighted average of the last 30 minutes, not just the last trade.
• LTP (Last Traded Price) — The last price at which a trade actually took place. It is the number blinking on your screen.
• T+1 Settlement — In India, equity delivery settles on the next working day: buy today, and the shares are in your demat the next day.
• Circuit Limit — The limit on how far a price can move up or down in one day (2%, 5%, 10% or 20%). At the upper circuit only buyers are left, at the lower circuit only sellers.
• Market-Wide Circuit Breaker — When the index falls 10%, 15% or 20%, the entire market is halted for a while.
• Trading Holiday — A day when the exchange is closed; the exchange publishes the list every year.
• Muhurat Trading — A special one-hour symbolic session held on Diwali.
Events that come from the company's side and quietly change your holding:
• IPO — Initial Public Offering, when a company sells shares to the public for the first time and gets listed on the exchange.
• FPO — Follow-on Public Offer, when an already listed company issues new shares again.
• Listing Day — The day IPO shares trade for the first time. Listing gain or listing loss is the move on this day.
• Dividend — The portion of a company's profit that is paid to shareholders in cash.
• Record Date / Ex-Date — You must hold the share before the ex-date if you want the dividend or bonus. On the ex-date, the price usually adjusts by about that amount.
• Bonus Issue — Free extra shares. A 1:1 bonus means 1 more share for every 1 share, and the price theoretically adjusts to half — the value is the same, the quantity doubles.
• Stock Split — Breaking up the face value to increase the quantity, so that the per-share price looks smaller and more affordable. The total value does not change.
• Buyback — The company buys back its own shares, usually above the market price.
• Rights Issue — The right of existing shareholders to buy extra shares at a discount.
• Face Value — The nominal book value of a share (such as ₹1, ₹2, ₹10). It has no direct relationship with the market price.
And finally, the terms the news channels repeat all day:
• Bull Market — A market that keeps rising over a long period, where every dip gets bought.
• Bear Market — A long decline, usually more than 20% from the top. Here every rally gets sold.
• Correction — A small, healthy fall within an uptrend — usually 5-10%.
• Rally — A sharp upward move, however small it may be.
• Crash — A very large fall in a very short time, often with panic.
• Volatility — How fast and how far the price moves. More volatility means more opportunity and more risk, both together.
• Liquidity — How easily you can buy or sell a large quantity without moving the price.
• Volume — How many shares actually traded in a period.
• Turnover — The same activity in terms of value (quantity × price), in rupees.
• FII / FPI — Foreign institutional investors. Their buying and selling creates the big moves in the index.
• DII — Domestic institutional investors: mutual funds, insurance companies, pension funds.
• Retail Investor — You and me. Individual investors, whose order sizes are small.
• 52-Week High / Low — The highest and lowest price of the past year; the quickest reference for understanding trend and extremes.
• Long / Short — Long means buying first and then selling. Short means selling first and then buying.
• Delivery vs Intraday — In delivery, shares come into your demat and you can hold them as long as you like; in intraday, the position must be closed the same day.
Behind every chart there is a business. These are the basic numbers that appear in the news after every result:
• Revenue / Topline — How much the company sold in total in the year or quarter.
• Net Profit / Bottomline — What is left after all expenses and tax.
• EPS (Earnings Per Share) — Net profit divided by total shares. How much the company is earning per share.
• P/E Ratio — Price divided by EPS. How many rupees you are paying for one rupee of earnings. Always compare it with other stocks in the same sector, not with a different industry.
• Book Value — The company's assets minus liabilities, per share.
• P/B Ratio — Price divided by book value. It is used more often for asset-heavy businesses (such as banks).
• Dividend Yield — The year's dividend divided by price, in percentage.
• ROE (Return on Equity) — How much return the company is generating on shareholders' money.
• ROCE — Return on total capital (equity + debt). For businesses with debt, it gives a more honest picture than ROE.
• Debt-to-Equity — How much debt the company carries relative to its equity. More debt means more risk in bad times.
• Operating Margin — How much profit the core business is making, before interest and tax.
• Promoter Holding — What percent the founders hold. A steady decline in it is a signal worth watching.
• Pledged Shares — Promoters have kept their shares as collateral against a loan. A high pledge is a known risk factor.
• Quarterly Results — A performance update every three months. Volatility rises around it.
• YoY / QoQ — Year-on-year (compared with the same quarter last year) and quarter-on-quarter (compared with the previous quarter).
• Guidance — Management's own estimate of the future. A guidance cut often creates a bigger move than the result itself.
• Credit Rating — An agency's verdict on whether the company will be able to repay its debt.
And the things you have to set up once before trading, but which cause confusion for a lifetime:
• KYC — Know Your Customer: verifying identity with PAN, address and bank proof. Without it, the account does not become active.
• Nominee — The person to whom your holdings will be transferred if you are no longer around. Leaving it blank is the most common mistake.
• DDPI / POA — The authorisation by which shares are moved out of your demat automatically when you sell, without separate approval each time.
• Ledger Balance — Your available cash with the broker.
• Payin / Payout — Giving money or shares to the exchange (payin) and receiving them from the exchange (payout).
• Margin Pledge — Pledging your holdings and taking trading margin against them. Your shares are not sold in this, only blocked.
• Haircut — The discount applied to the value of a pledged share. A 20% haircut on a ₹100 share means ₹80 of margin.
• Holding Statement — The list of which shares you currently hold and how many.
• CAS (Consolidated Account Statement) — NSDL/CDSL's monthly statement that shows all holdings in one place.
• Contract Note — The broker's legal statement at the end of the day: every trade, every charge, the net obligation.
• SEBI SCORES — The investor complaint platform, where a complaint can be registered against a broker.
These terms are the alphabet of the market. Without them, a chart is just colours and lines. In the coming journals, this same vocabulary will appear on the chart — first price action, then market structure, indicators, order flow, F&O, risk and psychology.
This journal is for educational purposes only — it is not a buy or sell recommendation. Look at every term on your own chart, because that is the only way it sticks.