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20 Financial Market terms you should know


20 Stock Market terms you should know

1) Investment

Investment is a monetary asset that is purchase with the intention that it will provide income in the future. It is a means to create wealth over the long term. Some of the examples are deposits, mutual funds, and real estate.


2) Portfolio diversification

Portfolio diversification is an investment strategy that helps you manage your risk. Basically, it invests your money in a variety of investments. Portfolio diversification has a greater potential to get high-return in the long run. It also lowers the risk associated with each particular investment.


3) Financial Market

It is virtual or physical spaces that are dedicated to the purchase and sale of financial assets.


4) Debt Market

Bonds and Debentures are brought and sold in a debt market. Government and Companies entities issued these instruments.


5) Equity Market

Stocks of public limited companies are traded in the equity market. Here, you can carry out a variety of trades such as intraday transactions, delivery trades, Initial Public Offers (IPOs), and Follow on Public Offers (FPOs).


6) Money Market

Investment in Money Market is for a short period of less than one year. In a money market, Monetary assets like treasury bills, commercial papers, and certificates of deposits can be bought.


7) Capital Market

Assets with medium-term and long-term investment horizons are traded in the capital market. Capital markets are divide into primary markets and secondary markets.


8) Cash Market

Here, financial assets are sold for cash and for immediate delivery. Transactions are settled on a real-time basis.


9) Futures Market

Here, you may pay the money at the time of making your transaction, but the delivery of the asset happens at a later date.


10) Exchange-traded market

It is a centralized market that runs on standardized procedures. Transactions occur through an exchange. The exchange-traded market is used by well-established companies.


11) Over-the-counter market

It is a decentralized market where buyers and sellers can interact with one another and engage in the trade of customized products, as per their requirements. It is used by small companies.


Other terms such as

12) Stock exchange

13) Depository

14) Depository participant

15) Stockbroker

16) Institutional investors

17) Retail investors

18) Hight Networth Individuals

19) Stock market

20) Clearance and settlement


We have a separate article on the above term, click here to check.

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