After understanding how the share market works, how the price of any stock is determined and the primary market & secondary market, we will learn about some important terms of the stock market for beginners in 2024. By understanding these terms you can easily get an idea of any news related to share market so let’s start our article of important terms of stock market for beginners in 2024;
Important terms of stock market for beginners in 2024;
Here are the important terms of stock market for beginners in 2024;
What is a demat account?
Demat account is like a bank account. In a bank account you hold your money and in the demat account you hold the shares. In a bank account there is a transaction of money and in the demat account there is a transaction of shares. For creating a demat account you will need a brokerage like for creating a bank account you need a bank. There are many brokerage services available, some take annual maintenance charges for demat accounts and some take other charges for other additional services. There are some brokerage services who provide free demat account service. So kindly wait, we will discuss the best brokerage with zero annual maintenance charges in the next article.
Diversification
Diversification means investing in various sectors. This will reduce the risk of losing money.
Market capitalization
It is the total worth of outstanding shares of a corporation, as determined by multiplying the price of the stock by the quantity of shares.
Dividend
The amount given to shareholders from a company’s profits.
Blue chip stocks
These stocks are the stock of big in terms of market capitalisation, reputable businesses with strong financial standing.
Volatility
The extent to which a stock’s price fluctuates over time.
Price-to-Earnings, or P/E ratio
It is a ratio used to determine a stock’s valuation by comparing its price to its earnings per share.
Market Order
It is an ordIndexer to purchase or sell that is carried out right away at the going rate.
Limit orders
These are placed to purchase or sell stocks at a set price or above.
Exchange-traded fund, or ETF
It is a fund that is traded on an exchange and owns a variety of assets, including stocks, bonds, and commodities.
Liquidation
Selling off a company’s assets to settle debts is known as liquidation.
Resistance Level
The price at which selling pressure is usually applied to a stock.
Support Level
The price at which buying interest in a stock usually occurs.
Dividend Yield
The amount of a company’s yearly dividend divided by the price of its shares.
Stock split
It is a corporate activity that lowers the price of shares by increasing the number of shares in circulation.
EPS or Earning per share
The profit of a firm divided by the total number of outstanding shares is called earnings per share, or EPS.
FAQs
What is stock split?
Ans. When any company has a low number of shares in the stock market, that company announces a stock split. Stock split increases the number of shares.
What are blue chip stocks?
Ans: Blue chip stocks are the stocks that have stability, future scope, strong fundamentals.
Best blue chip stocks in India?
Ans: Bajaj auto, Reliance industries, Larsen & Toubro ltd, Infosys, tata consultancy services, Britannia industries.
