NAV (Net Asset Value)

The per-unit market value of a Mutual Fund scheme. Formula: (Assets – Liabilities) / Total Units. E.g., If a fund’s assets = ₹500 Crore, liabilities = ₹10 Crore, units = 5 Crore, then NAV = ₹98/unit.

NBFC

Non-Banking Financial Company – RBI-regulated entities that provide loans, asset financing, and investments but do not hold banking licences. E.g., Bajaj Finance, Muthoot Finance.

NFO (New Fund Offer)

The first subscription offer for a new Mutual Fund scheme. Similar to an IPO in equity markets. NFO units are typically issued at ₹10/unit.

Nifty 50

India’s benchmark equity index comprising 50 top companies listed on NSE across 13 sectors. Managed by NSE Indices Ltd. As of 2026, Nifty 50 trades above 25,000 levels.

Nifty Next 50

An index of 50 companies that are next in line after Nifty 50 – often called the ‘junior Nifty’. These are mid-to-large cap companies with high growth potential.

Nominee

A person designated to receive the investment benefits in the event of the investor’s death. As per SEBI 2024 mandate, all Demat accounts must have a registered nominee or opt-out declaration.

NSE (National Stock Exchange)

India’s largest stock exchange by trading volume, headquartered in Mumbai. Launched in 1992, NSE introduced electronic screen-based trading in India. It hosts equity, F&O, currency, and debt markets.

NRI Investment

Non-Resident Indians can invest in Indian stocks through the Portfolio Investment Scheme (PIS) under FEMA. Under Section 195, TDS is applicable on NRI capital gains.

OHLC

Open, High, Low, Close – four price points used in candlestick charts to analyse a stock’s trading session. Fundamental tool in technical analysis.

Open Interest (OI)

Total number of outstanding F&O contracts that have not been settled. Rising OI with price rise indicates bullish momentum; falling OI with price rise indicates short-covering.

Option Chain

A table displaying all available call and put options for a stock/index at various strike prices and expiry dates. Traders use it to gauge market sentiment via Put-Call Ratio (PCR).

Order Book

An electronic list of all buy and sell orders for a particular security arranged by price. NSE publishes real-time order books for transparency.

OFS (Offer For Sale)

A mechanism via which promoters or large shareholders of listed companies dilute their stake through the exchange platform. SEBI allows OFS only for companies with market cap above ₹1,000 Crore.

Oversubscription

When an IPO receives bids for more shares than it has offered. E.g., If an IPO offers 1 Crore shares and receives bids for 50 Crore shares, it is 50x oversubscribed.

P/E Ratio (Price-to-Earnings)

Valuation metric = Market Price per Share / EPS. E.g., If stock price = ₹500 and EPS = ₹25, P/E = 20x. Nifty 50 average P/E in 2026 hovers around 22-24x.

P/B Ratio (Price-to-Book)

Compares stock price to book value per share. P/B < 1 may indicate undervaluation. Formula: Market Price / (Total Assets – Total Liabilities) per share.

PMLA (Prevention of Money Laundering Act)

Governs KYC requirements for market participants. SEBI mandates strict PMLA compliance for brokers, AMCs, and Demat account holders.

Portfolio

The complete collection of financial investments held by an individual or institution – stocks, bonds, mutual funds, ETFs, gold, etc. Diversification across sectors reduces risk.

Pledging of Shares

Promoters may pledge their shares as collateral to raise loans. Excess pledging (>50%) is considered a red flag for investors. SEBI mandates quarterly disclosure of pledged holdings.

PMS (Portfolio Management Service)

A professional investment management service for HNIs. SEBI mandates minimum investment of ₹50 Lakhs (revised from ₹25L in 2020) for PMS.

Put Option

A contract giving the buyer the right to sell a security at a specific strike price before expiry. Put buyers profit when the market falls. In Indian markets, weekly Nifty puts are popular.

Pre-Open Session

NSE/BSE Pre-open session runs from 9:00 AM to 9:15 AM IST. It determines the equilibrium price (opening price) for stocks through a call auction mechanism.

QIB (Qualified Institutional Buyer)

SEBI-defined large institutional investors: Mutual Funds, FIIs, Scheduled Commercial Banks, Insurance Companies. In IPOs, 50% of the QIB portion is reserved for anchor investors.

QIP (Qualified Institutional Placement)

A capital-raising method where listed companies issue shares/debentures to QIBs without a public offer. Faster than FPO and requires no SEBI pre-approval.

Quartely Results (Q1/Q2/Q3/Q4)

Every listed company must publish quarterly financial results within 45 days of the quarter end (60 days for annual). Indian FY runs April to March: Q1 = Apr-Jun, Q2 = Jul-Sep, Q3 = Oct-Dec, Q4 = Jan-Mar.

Quote

The current price at which a stock is being traded. It typically shows Bid Price (buyer’s offer) and Ask Price (seller’s offer) along with volume and change.

Rights Issue

A company offers additional shares to existing shareholders at a discounted price in proportion to their holdings. E.g., a 1:5 rights issue at ₹90 when CMP = ₹120 benefits existing shareholders.

ROCE (Return on Capital Employed)

EBIT / Capital Employed. Measures how efficiently a company uses its capital. A ROCE > cost of capital indicates value creation. Ideal: >15% for Indian companies.

ROE (Return on Equity)

Net Profit / Shareholders’ Equity. Measures profitability relative to equity. Buffett looks for ROE > 15% consistently. Many top Indian companies like TCS, HDFC Bank maintain >20% ROE.

Rolling Settlement

A trading settlement where trades are settled within a fixed number of business days from the trade date. NSE/BSE follow T+1 settlement since 2023. T+0 pilot commenced in 2024.

Risk-Reward Ratio

Used by traders to evaluate trade setups. If your target is ₹20 and stoploss is ₹10, the Risk-Reward ratio is 1:2 (risk ₹10 to earn ₹20). Minimum 1:1.5 is preferred.

REIT (Real Estate Investment Trust)

A listed entity that owns income-generating real estate. In India, REITs are regulated by SEBI. Top Indian REITs: Embassy REIT, Mindspace REIT, Brookfield REIT. Minimum lot = 1 unit.

SEBI (Securities and Exchange Board of India)

The apex regulatory body for India’s capital markets. Established in 1992, SEBI regulates stock exchanges, brokers, mutual funds, FIIs, and listed companies. HQ: Mumbai.

Sensex (S&P BSE Sensex)

India’s oldest benchmark index comprising 30 financially sound companies listed on BSE. Base Year: 1978-79 = 100. As of 2026, Sensex trades above 80,000 levels.

Short Selling

Selling shares you do not own, with the intention to buy them back at a lower price. SEBI allows short selling but mandates compulsory delivery. Naked short selling is prohibited in India.

SIP (Systematic Investment Plan)

A method of investing a fixed amount in Mutual Funds at regular intervals (monthly/quarterly). India had over 8 Crore SIP accounts as of early 2026, contributing over ₹23,000 Crore/month.

SLB (Securities Lending & Borrowing)

A SEBI-approved mechanism where investors lend their long-term holdings to short sellers for a fee (lending fee), creating an additional income source.

SME IPO

IPOs by Small & Medium Enterprises listed on NSE Emerge or BSE SME platforms. Minimum lot sizes are typically 1,000-2,000 shares. SEBI has enhanced disclosure norms for SME IPOs in 2025.

Stoploss (SL)

A pre-set price at which a trade is automatically squared off to limit losses. E.g., if you buy a stock at ₹200, a stoploss at ₹190 limits your maximum loss to ₹10/share.

STCG Tax

Short Term Capital Gains tax applies on equity sold within 12 months of purchase. Rate: 20% (revised from 15% in Union Budget 2024-25) under Section 111A.

Swing Trading

Holding stocks for 2 days to a few weeks to capture price swings. Different from intraday (same day) and positional (months/years). Common in Indian markets post results season.

T+1 Settlement

India moved to T+1 (Trade plus 1 business day) settlement in 2023, making it one of the fastest settlement cycles globally. Shares credited next trading day after purchase.

TDS on Dividends

Under Section 194 of the IT Act, companies deduct 10% TDS on dividends exceeding ₹5,000/year paid to resident shareholders. NRIs face 20% TDS under Section 195.

Technical Analysis (TA)

Studying historical price and volume data via charts and indicators (RSI, MACD, Bollinger Bands) to forecast future price movements. Used extensively by traders on NSE/BSE.

Theta (Time Decay)

Options concept: the rate at which an option’s time value erodes as expiry approaches. Theta is negative for option buyers (they lose value over time) and positive for sellers.

Trading Account

An account linked to your Demat account that allows you to buy and sell securities on NSE/BSE. Without a trading account, you cannot place orders on exchanges.

Turnover Ratio

For Mutual Funds, it indicates how frequently the fund manager buys/sells portfolio holdings in a year. High turnover = active trading strategy, which may lead to higher transaction costs.

Underwriter

Investment banks/financial institutions that guarantee the sale of an IPO by committing to purchase any unsold shares. Top underwriters in India: Kotak Mahindra, ICICI Securities, Axis Capital.

Upper Circuit / Lower Circuit

SEBI-mandated daily price limits. When a stock hits its upper circuit, no more buy orders are accepted; at lower circuit, no more sell orders. Circuits: 2%, 5%, 10%, 20% depending on stock category.

UPI in IPO (ASBA)

Since 2019, SEBI mandated UPI-based Application Supported by Blocked Amount (ASBA) for retail IPO applications up to ₹5 Lakhs. Money stays in your account until allotment.

Uptrend

A market condition where a stock or index consistently makes higher highs and higher lows over a period. Identifies bullish momentum. E.g., Nifty’s uptrend from Oct 2023 to Sep 2024.

Valuation

The process of determining the intrinsic worth of a stock using methods like DCF, P/E, EV/EBITDA, Price-to-Book. Fundamental investors compare valuation vs market price to find buying opportunities.

VIX (Volatility Index)

India VIX measures expected market volatility over next 30 days. Derived from Nifty option prices. VIX > 20 = fear/uncertainty; VIX < 15 = calm markets. Published by NSE.

Volume

Total number of shares traded in a security during a specific period. High volume confirms price movements. Volume spike with price breakout = strong signal in technical analysis.

VWAP (Volume Weighted Average Price)

Average price weighted by volume. Widely used by institutional traders as a benchmark. Stocks trading above VWAP are bullish intraday; below is bearish. Available in real-time on NSE.

Warrant

A derivative instrument giving the holder the right to buy a company’s stock at a fixed price before a specified date. Warrants are issued by companies (unlike options, issued by exchanges).

Wealth Tax

India abolished Wealth Tax in 2015 (Finance Act 2015). However, surcharge on income from capital gains still applies for HNIs. Income above ₹5 Crore attracts 37% surcharge (reduced to 25% post Budget 2023).

Window Dressing

Practice by Fund Managers of buying high-performing stocks and selling underperformers near quarter/year-end to make their portfolio look better in reports. Common in Indian MF industry in March.

Working Capital

Current Assets minus Current Liabilities. A company’s short-term financial health indicator. Healthy working capital = better ability to meet short-term obligations.

Ex-Dividend Date

The date from which a stock trades without the right to the declared dividend. If you buy on or after the ex-date, you do not receive the dividend. NSE/BSE announce this along with record dates.

Ex-Bonus / Ex-Rights Date

Similar to ex-dividend, these are dates from which stocks trade without bonus share or rights entitlement. The stock price typically adjusts downward on the ex-date.

Exit Load

A fee charged by Mutual Funds when you redeem units before a specified holding period. E.g., 1% exit load if redeemed within 1 year for equity funds. SEBI mandates AMCs to disclose exit load clearly in SID.

Yield

The income generated by an investment expressed as a % of its cost or current market value. Types: Dividend Yield (DY = Annual Dividend / CMP × 100), Bond Yield, Earnings Yield.

Yield Curve

A graph plotting yields of bonds with equal credit quality but differing maturity dates. A normal yield curve = longer maturities yield more. An inverted yield curve often signals recession.

Year-to-Date (YTD)

Performance metric from January 1 (or April 1 for Indian FY) to the current date. Used to measure stock, fund, or portfolio returns within the financial year.

Z Category Stocks

BSE classification for stocks that have failed to comply with listing requirements or have cases pending in courts. These are highly risky and not eligible for carry forward trading.

Zero Coupon Bond

A debt instrument that pays no periodic interest but is issued at a deep discount to face value. Profit = difference between purchase price and maturity value. Taxed as capital gains in India.

Zero Cost Averaging

A strategy where an investor hedges an existing position by selling options to finance the purchase of protective options, reducing the net cost to zero.

Listed Equity Shares

20% (Sec 111A)

12.5% above ₹1.25L (Sec 112A)

STCG < 12M | LTCG > 12M

Equity Mutual Funds

20% (Sec 111A)

12.5% above ₹1.25L (Sec 112A)

STCG < 12M | LTCG > 12M

Debt Mutual Funds

Slab Rate

Slab Rate (post Apr 2023)

No LTCG benefit post 2023

F&O Trading

Business Income (Slab)

Business Income (Slab)

Treated as non-speculative

Intraday Trading

Speculative Business Income

Speculative Business Income

Same-day square off

REITs / InvITs

15% / 20% on gains

10% (with indexation for Debt)

Depends on asset type

Unlisted Shares

Slab Rate

12.5% without indexation

LTCG > 24M