Commonly Used Jargons
Essential stock market terminology every investor should know — from bulls and bears to circuit limits, market cap categories, and trading terms.
01
Market Direction Terms
These terms describe the overall direction and momentum of the market or a stock.
| Term | Meaning |
|---|---|
| Bull market | A sustained period of rising prices — generally a rise of 20% or more from recent lows. |
| Bear market | A sustained period of falling prices — generally a decline of 20% or more from recent highs. |
| Bullish | A positive outlook — expecting prices to rise. |
| Bearish | A negative outlook — expecting prices to fall. |
| Sideways | The market moves within a narrow range, with no clear upward or downward trend. |
| Rally | A sharp, sustained increase in prices over a short period. |
| Correction | A decline of 10–20% from a recent peak. Healthy and common during uptrends. |
| Crash | A sudden and severe drop in prices, typically 20%+ in a very short timeframe. |
02
Trading Terms
Core terminology you will encounter every day on the trading terminal and in market discussions.
| Term | Meaning |
|---|---|
| Long position | Buying a stock with the expectation that its price will rise. You profit when you sell higher. |
| Short position | Selling a stock you don't own (borrowed) expecting its price to fall. You profit when you buy it back lower. |
| Square off | Closing an open position — selling if you are long, or buying back if you are short. |
| Intraday | Buying and selling the same stock on the same trading day. No overnight holding. |
| Delivery | Buying shares and holding them in your demat account beyond the trading day. |
| CNC (Cash and Carry) | Product type for delivery trades — shares are delivered to your demat account. |
| MIS (Margin Intraday Square-off) | Product type for intraday trades — positions must be closed by end of day. |
| Bid price | The highest price a buyer is willing to pay for a stock at that moment. |
| Ask price | The lowest price a seller is willing to accept for a stock at that moment. |
| Spread | The difference between the bid and ask price. Tighter spreads indicate better liquidity. |
| Tick | The minimum price movement of a stock. On Indian exchanges, one tick = ₹0.05 for most stocks. |
03
Volume & Liquidity
Understanding volume and liquidity helps you judge how easily a stock can be traded and how meaningful a price move really is.
| Term | Meaning |
|---|---|
| Volume | The total number of shares traded in a given period. High volume confirms the strength of a price move. |
| Liquidity | How easily a stock can be bought or sold without significantly impacting its price. |
| Large-cap | Companies with a market cap above ₹20,000 crore (top 100 by market cap). Most liquid. |
| Mid-cap | Companies ranked 101st to 250th by market cap. Moderate liquidity and growth potential. |
| Small-cap | Companies ranked 251st and below by market cap. Higher growth potential but lower liquidity. |
| Penny stock | Stocks trading at very low prices (often below ₹10). Extremely illiquid and risky. |
| Blue-chip | Large, well-established, financially stable companies with a strong track record. Examples: Reliance, TCS, HDFC Bank. |
04
Price & Valuation Terms
These terms help you analyse whether a stock is fairly valued, overvalued, or undervalued.
| Term | Meaning |
|---|---|
| 52-week high / low | The highest and lowest price at which a stock has traded in the past 52 weeks (one year). |
| ATH (All-Time High) | The highest price a stock has ever reached since listing. |
| Face value | The nominal value of a share as stated in the company's charter (commonly ₹1, ₹2, ₹5, or ₹10). Not the market price. |
| Book value | The net asset value per share — total assets minus total liabilities divided by number of shares. |
| Market capitalisation | Current share price × total number of shares outstanding. Determines the company's size classification. |
| P/E ratio (Price-to-Earnings) | Share price divided by earnings per share. Shows how much you pay for every ₹1 of earnings. |
| EPS (Earnings Per Share) | Net profit divided by total shares outstanding. Indicates per-share profitability. |
| Dividend yield | Annual dividend per share divided by the current share price, expressed as a percentage. |
05
Market Mechanism Terms
Terms related to how the exchange and settlement process work behind the scenes.
| Term | Meaning |
|---|---|
| Circuit limit | The maximum percentage a stock can move (up or down) in a single trading day. Set by the exchange. |
| Upper circuit | The stock has hit its maximum allowed price increase for the day. No more buy orders can be executed above this level. |
| Lower circuit | The stock has hit its maximum allowed price decrease for the day. No more sell orders can be executed below this level. |
| T+1 settlement | Trade date plus one business day. Shares are credited to your demat account one day after the trade. |
| Ex-date | The date from which a stock trades without the entitlement to a declared dividend, bonus, or split. |
| Record date | The date on which the company checks its shareholder register to determine who receives the corporate action benefit. |
| Block deal | A single transaction of at least 5 lakh shares or ₹10 crore in value, executed in a separate block deal window. |
| Bulk deal | When a single entity buys or sells more than 0.5% of a company's total shares in a trading day. |
06
Investor & Institutional Terms
Different categories of market participants and institutional investors you will see referenced in market reports.
| Term | Meaning |
|---|---|
| FII / FPI (Foreign Institutional Investor / Foreign Portfolio Investor) | Overseas institutions investing in Indian markets. Their buying and selling significantly impacts market direction. |
| DII (Domestic Institutional Investor) | Indian institutions — mutual funds, insurance companies, pension funds — that invest in the stock market. |
| Promoter | The founding individual, family, or entity that controls the company. Promoter holding is a key governance metric. |
| Retail investor | An individual investor who buys and sells securities for their personal account, not for an organisation. |
| HNI (High Net-worth Individual) | An individual investor with a large portfolio, typically investing ₹2 lakh or more in IPOs and significant amounts in secondary markets. |
| Anchor investor | A qualified institutional buyer who invests at least ₹10 crore in an IPO before it opens for public subscription, signalling confidence. |
07
Key Takeaways
Key Takeaways
- Bull and bear markets describe sustained upward and downward price trends; corrections and crashes are different in severity.
- Long means buying, short means selling first — every position must eventually be squared off.
- Volume and liquidity determine how easily and reliably you can enter or exit a trade.
- P/E, EPS, and market cap are essential metrics for gauging a stock's valuation and size.
- Circuit limits, settlement cycles (T+1), and corporate action dates are structural rules every trader must understand.
Disclaimer
This content is for educational purposes only. swingcapital is not a SEBI-registered advisor. Consult a qualified financial advisor before making investment decisions.