30 Must Know Stock Market Terms for Beginners | Learn Share Market Malayalam with Sharique Ep 8

Introduction

This tutorial is designed to introduce beginners to essential stock market terminology. Understanding these terms is crucial for anyone looking to invest or trade in the stock market. This guide compiles 30 key terms explained in a straightforward manner, empowering you to engage confidently in financial discussions.

Step 1: Understand Key Stock Market Terms

Familiarize yourself with the fundamental terms that form the backbone of stock market conversations. Here are some essential definitions:

• Outstanding Shares: The total number of shares issued by a company that are currently held by shareholders.
• Public Float: The number of shares available for trading by the public, excluding restricted shares held by insiders.
• Market Capitalization: The total market value of a company's outstanding shares, calculated by multiplying the share price by the number of outstanding shares.

Step 2: Learn About Market Values

Recognizing the difference between various types of market values is important for evaluating stocks.

• Face Value: The nominal value of a stock as stated on the certificate, often used for calculating dividends.
• Market Value: The current price at which a stock is traded in the market, which can fluctuate based on supply and demand.

Step 3: Explore Market Segments

Understanding the different market segments helps you identify where to invest.

• Capital Market: A market for buying and selling long-term securities.
• Equity Market: The segment of the capital market that deals with company shares.
• Derivative Market: A market where financial instruments like options and futures are traded.

Step 4: Familiarize Yourself with Investment Types

Different types of investments have unique characteristics and risks.

• Blue Chip Stock: Shares in well-established companies known for their reliability and performance.
• IPO (Initial Public Offering): The process through which a private company offers shares to the public for the first time.

Step 5: Understand Market Trends

Recognizing market trends can help in making informed investment decisions.

• Uptrend: A period when stock prices are rising.
• Downtrend: A period when stock prices are falling.
• Sideways Trend: A market condition where prices move within a narrow range.

Step 6: Grasp Market Conditions

Be aware of broader market conditions that influence trading.

• Bull Market: A market condition characterized by rising prices and investor optimism.
• Bear Market: A market condition where prices are falling, leading to widespread pessimism.

Step 7: Learn About Trading Positions

Understanding trading positions is essential for executing trades effectively.

• Long Position: Buying stocks with the expectation that their price will rise.
• Short Position: Selling borrowed stocks with the expectation of buying them back at a lower price.
• Square Off: Closing an existing position in the market.

Step 8: Recognize Market Dynamics

Market dynamics such as volatility and liquidity affect trading strategies.

• Volatility: The degree of variation in trading prices over time, indicating risk levels.
• Liquidity: The ease with which assets can be bought or sold without affecting their price.

Step 9: Utilize Trading Tools

Understanding trading tools can enhance your trading strategy.

• Averaging: The strategy of buying more shares as prices drop to reduce the average cost per share.
• Charts: Visual representations of stock price movements over time, used for technical analysis.
• Volume: The number of shares traded during a specific period, indicating the activity level of a stock.

Conclusion

By familiarizing yourself with these 30 essential stock market terms, you will build a strong foundation for investing and trading. Next steps could include opening a trading account and starting to follow the market trends discussed. As you gain confidence, continue learning and expanding your knowledge to navigate the stock market effectively.