Financial Glossary


A/A or AoA

Article of Association – A document defines the roles and duties of the company key people like director. Also refer as constitution of the company.


ACE – AMFI Code of Ethics – As the name suggest, describes the set of practice to be followed by Asset Management Company.

Adhoc Margin

Adhoc Margin – Margin booked by stock exchanges against outstanding positions.

Aadhaar-Based eKYC Process

Aadhaar-Based eKYC is a paperless process to fulfill KYC requirement of starting your investment in Mutual Fund.


ADR – American Depository Receipts – ADR is a mode of investment where Americans can buy ADRs from US depository bank.


AGNI – AMFI Guidelines and Norms for Intermediaries – Defines the guidelines and norms for intermediaries like AMCs, Investor etc.

Algo Trading

Algo trading is a method to execute order in stock market with a pre-programmed automated trading instructions accounting.


Alpha – Alpha and Beta are two measurements to measure performance of any investment. Alpha helps us in measuring return of an investment. Positive Apha means over performed the market and Negative Alpha represents under performed the market.


AMBI – Association of Merchant Bankers in India


AMFI stands for Association of Mutual Funds in India is regulatory body for Indian Mutual Funds Industry.

Anti-Money Laundering

Anti-Money Laundering refers to the set of practice to detect, prevent and report any illegal flow of money.


Analyst is the person or firm who do analysis of a subject/topic etc. Like Financial Analyst, Business Analyst, Software Analyst etc


To increase; It is the increase in the value or price of any stock.


Arbitrage – Purchasing any commodity or security from one market and selling in another market to take advantage of price difference.


ARN stands for AMFI Registration Number, is a registration no. given by AMFI to become authorized Mutual Fund Distributor.


ASBA – Application Supported by Blocked Amount; Used to apply IPO and NCD.


Auction is a process where exchange sells the investor’s stock holding where the seller of stocks is not able to deliver it to buyer.


AUM (Asset Under Management) – The total assets, owning by the mutual fund scheme is called AUM for that particular scheme.

Assets Under Management (AUM)

Assets Under Management (AUM) is the total market value of the investments (assets) that an asset management company is managing, on behalf of its investors.


Balance Sheet

Balance Sheet – A statement that represent the assets and liabilities of an association or an individual.

Balanced Fund

Balanced Fund – A Mutual fund that invest in Equity and Debt both. Also know as Hybrid Fund


Bancassurance = Bank + Insurance; means selling insurance product by a bank.

Bear Market

Bear Market is weak or downward market with majority of sellers.


Benchmark – A point or reference to compare something.

Benchmark index

Benchmark index is a pool of securities or shares and used as reference point. Like Nifty, Sensex etc


Beta is a measurement to measure the performance of investment. It helps us to measure volatility of portfolio.


Bid is the price the that someone is willing to pay for a stock.


Bitcoin – A virtual currency that doesn’t have any administrative Bank. It is not legal tender in India.

Block Trading

Block Trading – Selling and purchasing in large volume of securities.

Blue Chip

Blue Chip – Shares of large and well recognized companies, generally having high net worth and pays regular dividend to their share holders.

Bonus Shares

Bonus share is one of the form of  corporate action where additional shares are given to existing share holders.

Book Closure Date or Record Date

Book closure date or record date is the date on which shareholder must hold the stock to receive certain corporate action benefits like bonus, dividends etc.

Book Value

Book value is the net value of a company or firm calculated as total assets minus total liabilities.


Brokerage is the commission that a stock broker charge against a buy or sell transaction.


BSE or Bombay Stock Exchange Ltd, the first ever stock exchange in Asia established in 1875, BSE is India’s leading exchange group. BSE’s popular equity index – the S&P BSE SENSEX – is India’s most widely tracked stock market benchmark index and office is situated at Dalal Street, Mumbai.

Bull Market

Bull Market can be defined as Strong or Favourable Market with majority of buyers.

Business Day

Business Day – A day when stock exchanges are open to trade.

Buy back

Buy back or share repurchase is a corporate action when a company announce to buy back its own share from existing shareholders.

Buy on margin

Buy on margin – To purchase shares by the money provided by the company.



CAGR – Compounded Annual Growth Rate – An average rate of return over the period of time that an investor has earned oh his investment.

Call Option

Call Option – Used in derivative trading, where buyer is having a right (not the obligation) to buy a specific stock at a specified price within a specific time.

Capital Gain

Capital Gain – Increase in the value of investment and can be calculated as difference between purchase price and sold price.

Cash Market

Cash Market – A market place where immediate settlement is done of commodities and securities transaction.

CC or Clearing Corporation

CC or Clearing Corporation – An organization which is associated with an exchange to settle the transaction of cash and delivery of securities.


CDSL – CDSL is the second Indian central securities depository based in Mumbai and received the certificate of commencement of business from SEBI in Feb 1999. CDSL is promoted majorly by Bombay Stock Exchange. CDSL also went public on National Stock Exchange of India on June, 2017.

Circuit Filters

Circuit Filters – To keep investor’s money safe and to control volatility of high volatile shares, SEBI has specified the maximum limit the price of a stock can move on a given day. This upper and lower range of that price is defined as Upper Circuit Limit and Lower Circuit Limit. This is also referred as Trading Band.


Clearing – A process of reconciling sales and purchases of various futures, option or securities and Fund transaction from one to another member.

Clearing House

A clearing house is a mediator between two parties that are involve in financial transaction.

Clearing Member

Clearing Member – A member of Clearing Corporation who settles and clears deals through the Clearing Corporation.

Close-ended Fund

Close-ended Fund – A mutual fund having fix investment term and can be bought through NFO only and can not be redeem before a maturity period.


Collateral – The asset which can be used as security against any loan.

Collateral Value

Collateral Value – The estimated value of the loan that can be given against the collateral.

Commercial Paper

Commercial Paper is a short-term unsecured promissory notes issued by companies.

Common stock

Common stock – Shares or ownership of a corporation is called Common Stock.

Contract Note

Contract Note – A legal statement through a stockbroker of any transaction carried out on a stock exchange.

Credit rating agency

CRA or Credit rating agency – A company that rate a debtor’s ability to pay back debt by making timely principal and interest payment. Ex. CRISIL, ICRA, Moody’s etc


Cryptocurrency – A digital currency where encryption techniques are used to regulate the generation of units of currency.


Custodian – A custodian is a financial institution who has responsibility for taking care of or protecting securities and assets in electronic or physical form.


CVL or  CDSL Ventures Ltd – A KYC registration Agency


Day Order

Day Order – An order of buy or sell at specific price on a business days, which expires at closing of market if not complete.

Day Trader

A day trader buy and sells financial instruments like stocks, currencies or futures and options within same business day.


DD or Demand Draft – A promise to pay a certain amount to its holder.  


DDT or Dividend Distribution Tax (Additional Tax on Income Distribution)


Dealer – A person of a firm who works for buy and sell the securities on behalf of their client.

Debt Fund

Debt Fund is a mutual fund that invests the fund with low risk return instruments like bond, NCDs and short term fund.


Delivery – Formal and voluntary transfer process of securities. Where you purchase today and hold it for sold later.


Dematerialization is a process to convert securities from physical mode (certificate) into electronic mode.

Depository Participant

Depository Participant (DP) is an intermediary between investor and Central Depository (NSDL or CDSL) . Bank, Brokers and financial institutions are empowered for DEMAT account services by NSDL or CDSL Depository.


A reduce or reduction in the value of any asset or shares over the period of time is called depreciation.

DIS or Delivery Instruction Slip

DIS or Delivery Instruction Slip – A slip that facilitate the investor to transfer his/her shares to another demat account in offline mode.


In financial term, disclosure is a declaration of all relevant information or terms & condition that may require to a person in order to know more about any company or in making any investment decision.


Discount – A deduction in usual cost of something.


Diversification – In Finance, Diversification is a process to reduce the risk. It is done by allocating the investment fund by various way.


Dividend – The shareholders who holds the stocks for a company often receive a part of profit by company. This is called dividend.

DP and Depositories

There are primary two centeralized depository services in India: NSDL – National Securities Depository Limited CDSL – Central Depository Services (India) Limited NSDL and CDSL provide Demat Account faciltiy via their registered Deposioty Participant. DP or Depository Participant – An intermediaries between Depository and Investor.


DRF – Demat Request Form – A prescribed format to convert physical share certificate into electronic mode in demat account.


DRN – Demat Request Number


ECS or Electronic Clearing System

ECS or Electronic Clearing System – An electronic mode to transfer fund from one account to another account without any paper work.

Expense Ratio

Expense Ratio is the fee or charges that AMC charge on mutual fund investment.


ELSS or Equity Linked Saving Scheme – A Mutual fund that provide facilities for tax saving investment with lock in period of 3 year only.

Employee Stock Purchase Scheme (ESPS)

Employee Stock Purchase Scheme (ESPS) – A company-run program in which employee can participate and purchase company share on a discounted Price.


EPS or Earning Per Share – Income of company over each share, higher PE means the better is its profitability

Equity Fund

Equity Fund – In Equity mutual fund, money is invested in Equity shares only. On basis of stock’s categories there are different type of Equity funds like – Large Cap Mutual Fund, Mid Cap Mutual Fund, Small Cap Mutual Fund.

ETF or Exchange traded funds

ETF or Exchange traded funds – That allows to investor to purchase and sold Mutual fund through trading account.

European Option

European Option – This type of call and put option can be exercised only on date of expiry.


Face Value

Face Value – A financial term used to describe the nominal value of security.


FEMA – Foreign Exchange Management Act, 1999 is an Act of the Parliament of India that aims to consolidate and amend laws relating to foreign exchange in India.


FIFO – First In First Out

FII or Foreign institutional investor

Foreign Institutional Investor (FII) means an institution that is incorporated outside India and proposes to make investment in Indian Security Market.

Financial Planning

Financial Planning is not just saving the money. Majorly it includes to ensure adequate liquidity of cash all the time. It includes good appreciation to your savings.

Fixed Cost

A fixed cost is a cost that does not change with an increase or decrease in the amount of goods or services produced or sold.

Fortune 500

Fortune 500 (U.S.) – A list of top ranked 500 largest United State’s corporations by revenue in a fiscal year, published by Fortune magazine.

Forward Contract

Forward Contract – A contract which complete on a future date at a specified price to buy or sell an asset between two parties.

Fundamental Analysis

Fundamental Analysis is a process to predict the future of any company by analyzing basic reports like revenues, earnings, profit and loss statement, balance sheet etc. Mostly long term investors prefer fundamental analysis of a company before investing.

Fund House

Fund house is used more commonly just another name for an Asset Management Company (AMC). Fund house carries out all investment related activities of the Mutual Fund, like purchase and sale of securities in the portfolio of various Mutual Fund schemes launched by the Mutual Fund.


GDR or Global Depository Receipts

GDR or Global Depository Receipts – Another investment instrument in which a domestic located company located issues one or more of its shares or convertibles bonds outside the domestic country.


G-secs are a short form for Government securities. Debt securities issued by the Government are called G-secs and are issued by the government to finance its fiscal deficit. G-secs with less than one-year maturity are called T-bills or Treasury bills and those with more than one year of maturity are referred to as Government bonds.


High Price

High Price – Highest Price of the trading day for a particular share.


Haircut- The approximate value used as collateral for loan, generally lower than market value.


HUF – Hindu Undivided Family



IDR or Indian Depository Receipts is an instrument denominated in Indian Rupees in the form of a depository receipt.


An index is a benchmark or representation of a group of companies that are put together on the basis of certain similarity. This classification of the companies may be on the basis of industry, sector, market capitalization etc. There are sectoral indices like BSE Bankex and CNX IT. Market capitalization-based indices like the BSE Smallcap and BSE Midcap.

Index Fund

Index Fund – A diversified portfolio of stocks, which invest in stocks of related index. Examples of Index Funds are – Large Cap Mutual Fund, Mid Cap Mutual Fund, Small Cap Mutual Fund.

Initial margin

Initial margin is minimum required fund to buy a security on margin.

Insider Trading

Insider Trading – Trading is mostly done on information that is available to the market. When trading is doing on the basis of information that is not known or available to the market is called Insider Trading. This is mostly done by corporate officers, directors, or employees of the company which is illegal.

International Indices

International Indices – As we have Sensex and Nifty here in Indian Stock Market. Similarly – NASDAQ and DOW Jones in America, FTSE a blue-chip stocks listed on the London Stock Exchange, NIKKEI in Japan etc.


IPV or In Person Verification – A process to verify the person that the applicant exists and he is able to take decisions.


IRDA or Insurance Regulatory Development Authority – An regulatory body that regulates the insurance industry of India.


ISIN or International Securities Identification Number, A unique 12-digit alpha-numeric code given to specific securities like shares, bonds etc.



Jobbers – Jobber is the dealer who deals in buying and selling of shares.



KIM – Key Information Memorandum


KRA – KYC Registration Agency


KYC – Know Your Customer

KYC Compliance for a Mutual Fund

KYC Compliance for a Mutual Fund – KYC process is your first step towards investing in mutual funds. As a new investor, you should approach a KYC registration agency (KRA) to complete the formalities. It is usually a one-time process for mutual fund investors.



LIFO – Last In First Out

Limit Order

A limit order is an order to buy or sell a stock at a specific price or better.

Listed Company

Listed Company – A firm whose share are registered on official stock exchange for public trading.


LOC – Letter of Credit

Low Price

Low Price – Lowest Price of the trading day for a particular share.

Lower Circuit Limit

Lower Circuit Limit – The minimum lower range of the price of a stock that a stock can move on a given day.


LTP or Last Traded Price – The price of a particular share on which last trade was made.


M/A or MoA

M/A or MoA – Memorandum of Association

Mahurat Trading

Mahurat Trading – It is a special trading session of one hour on the auspicious occasion of Diwali.

Margin Trading

Margin Trading is like buying shares on credit, where trader is using the funds borrowed from broker to to buy the shares.

Market Capitalization

Market Capitalization of a company can be calculated by multiplying the current market price of the share with total number of shares held by the public. For Example – Market Capitalization of a company having share price as Rs. 100 and total number of shares issued in the market as 2 Crore will be Rs. 200 Crore.

Market Order

Market Order – A buy or sell order at current market price.


M-Banking or Mobile Banking, where various banking transaction like fund transfer etc through Mobile.


MCX  or Multi Commodity Exchange – India Based a national Commodity Exchange regulated by SEBI.


MTM – Mark to Margin

Mutual Fund

A mutual fund is an investment instrument , which pools money from various investors with common investment objectives that invested through a portfolio and managed by a professional fund manager.



NASDAQ (U.S.) – A Leading American Stock Exchange.


NAV or Net Asset Value is the market value of all the securities held by the Mutual Fund scheme. It is measured on a per-unit basis.


NBFC or Non-Banking Finance Company provide financial services and banking facilities like loans, credit facilities etc. They are not banks but covered under the regulations laid down by the Reserve Bank of India. Ex- Bajaj Finance Limited, Muthoot Finance Ltd, Tata Capital Financial Services Limited, L & T Finance Limited etc


NCDEX or National Commodity and Derivatives Exchange is a multi commodity exchange incorporated on April 23, 2003. NCDEX is regulated by Securities and Exchange Board of India (SEBI) having its headquarter in Mumbai.


NEFT or National Electronic Funds Transfer. A mode of transferring the fund electronically from one account to another account.

Net change

Net change represents the price difference between last trading day closing and current price.

NFO or New Fund Offer

NFO or New Fund Offer – A new mutual fund schemes launches first time to go publicly. Normally open for 30 days.


Nifty is a group of top 50 companies listed in National Stock Exchange (NSE).


NISM or National Institute of Securities Market – An Educational Institute for Finance and Stock Industry.


NPA or Non-Performing Asset – An asset which is a liability and not earning any income.


NSDL is one of the largest Depositories in the world established in August 1996. NSDL is the first electronic securities depository in India with National coverage having headquarter in Mumbai. Click here to know more


NSE – The National Stock Exchange was incorporated in November 1992 and is the leading stock exchange in India. With the purpose to improve the financial well-being of people, NSE- Corporate office is situated in Bandra East, Mumbai.



OCI – Overseas Citizenship of India

OFS or Offer For Sale

OFS or Offer For Sale – An offer from any listed company for selling his share through the exchange platform.


An ombudsman is a Grievance Redressal Official, usually appointed by the government, who mostly investigates financial complaints like Banking, Insurance etc. In Banking, there is Banking ombudsman and in insurance we have insurance ombudsman.

Open ended scheme

Open ended scheme – These mutual fund scheme’s are open for purchasing and selling the units any time.

Open Order

Open Order – An order that placed on the trading platform but yet not settled.

Order book

Order book – A book to show all order placed by investor either it is settled or cancelled.


OTC or Over the Counter – OTC trades are done in cash and without any regulator or authority.



PoA or Power of Attorney – A legal agreement or written authorization to some one.

Ponzi Scheme

Ponzi Scheme – A fraud investment scheme promising very high returns with lower risk. This is like a pyramid scheme with no regulator attached.


Portfolio – An investment combination of multiple financial assets like equity, bonds, currency and commodities, ETF etc used to diversify the risk.

Portfolio Manager

Portfolio Manager – A professional manager who is responsible for making investment decisions in mutual fund.

Preferred Stock or Preference Shares

Preferred Stock or Preference Shares – Shares of a company who has the preference where dividends are given to its shareholders before any common stock holders.

Primary Market

Primary Market – Where a company is getting listed in a stock exchange to raise funds, And the company is selling its shares first time through IPO.

Pro – Rata

Pro rata is the term used to describe a proportionate allocation.


PSU or Public Sector Undertaking is a company in which majority of the stake (more than 50%) is owned by the Government. Ex. State Bank of India, Food Corporation of India etc



QFI – Qualified Foreign Investors



Rematerialization is the process to convert securities back in physical certificate from electronic mode.


RERA is Real Estate Regulation Act. Real Estate Regulation Act – Implemented in 2016, that protect the home buyers during the period of construction of project.


RRF or Rematerialisation (To convert shares into physical certificate from electronic form) Request Form.


RRN or Rematerialisation (To convert shares into physical certificate from electronic form) Request Number.


RTGS – Real Time Gross Transfer is a mode of fund transfer electronically.


RBI or Reserve Bank of India – RBI is Indian Banking Regulator. The Reserve Bank of India (RBI) is India’s central bank established on 1st April 1935 under the RESERVE BANK OF INDIA ACT having headquarter in Mumbai.


RGESS – Rajiv Gandhi Equity Savings Scheme


Sauda Book

Sauda Book – A record book of buy and sale transactions on exchange, which is maintained by members.


SEBI or Securities and Exchange Board of India is the regulator for the securities market in India. The primary objective of SEBI is to promote healthy and orderly growth of the securities market and secure investor protection. Click here to know more about SEBI

Secondary Market

Secondary Market – Once shares are issued in Primary Market through IPO , they can be bought and sold further through Secondary Market.


Sensex is a group of top 30 companies listed in Bombay Stock Exchange (BSE).

Share Market

Share Market – A share market is a place where shares are bought and sold. Companies are listed on Exchanges (NSE or BSE) and Exchanges facilitate trading of shares of listed companies through Brokers. Whenever share price of buyer and seller is fixed trade gets complete.

Short Selling

Short Selling – Selling a share without having it.


SID – Scheme Information Document


SIP or Systematic Investment Plan is a mode of investment that allows you to invest a fixed amount at a pre-defined intervals in the selected mutual fund scheme. An investor can start SIP of as low as Rs.500/ month.

Stamp Duty

Stamp Duty is levied on the value of the shares transferred. It vary from state to state and calculated as per account holder resident state.

Stock Price

Stock Price – The price which a investor pays to buy one share of company.

Stock Symbol

A stock symbol is a unique code given by exchanges to all listed companies. For Example : SBIN stands for State Bank Of India and LT represent to Larsen & Toubro Limited.

Stock Volatility

Stock Volatility – Price fluctuation of the stock can be referred as stock volatility.


STP or  Systematic Transfer Plan – An investment plan that allows to investor to transfer fund from one scheme to another scheme within same AMC with per-decided interval.


STT or Securities Transaction Tax – Tax paid on every sale and purchase of securities.

Sub broker

Sub broker – A person who is appointed by a stock broker and registered with SEBI, acts on behalf of a Trading Member as an agent.


SWIFT – Society for Worldwide Interbank Financial Telecommunication. A mode of transferring the fund from one account to another account worldwide.


Switching refers to the process of shifting your investments from one Mutual Fund scheme to another Mutual Fund scheme within the same Mutual Fund or AMC.


Tax Liability

Tax Liability – Tax Liability is the total amount of tax on your income.

T+2 Settlement

T+2 Settlement – Whenever a trade is complete; buyer of share is obliged to pay money and seller of shares is obliged to give shares. This process is called Settlement Cycle and gets complete is T+2 Days. For Example – Trade done on Monday will be settled by Wednesday Noon. (Considering all days are as Trading and Settlement Days).

Technical Analysis

Technical Analysis is often used by short-term investors and traders, who mostly studies the trends like share prices charts, supply and demand for the stock etc. DMA (Daily Moving Averages), RSI (Relative Strength Indices) etc are the measures of Technical Analysis.

Trading Member

Trading Member – A member of a stock exchange who settles the trade of the derivatives exchange in the clearing corporation through a clearing member.


Upper Circuit Limit

Upper Circuit Limit – The maximum upper range of the price of a stock that can move on a given day.


UCC – Unique Client Code



Volume – The number of shares being traded or changed hands.


VAR – Value at Risk



Warrant – In finance, Warrant is similar to Option; Warrant is a financial security and valid till its expiry date. It entitles the holder to buy that underlying stock at a fixed price till expiry.


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Yield – In financial terms, yield is calculating as how much money you have earned on a security over a period of time.


YTM or Yield to maturity – The total return received on a bond if the bond is held till maturity date.



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