1.

Share:- Share or Equity Shares are the part of ownership of the company which are traded in
secondary
markets.

2. Primary Markets in which public issue of securities is made through a prospectus is a retail
market and there is no physical location.

3. Secondary Markets The secondary market provides a trading place for the securities already issued,
to be bought and sold.

4. BSE & NSE or Stock Exchanges are the institutions which facilitates buying and selling of
securities and looks after to the settlement of trades (Done on T+2 Basis)

5. Sensex or sensitive index is the main index of BSE which consists of 30 shares of 16 dominant
sectors; a dominant sector is a sector which directly effects economy of the country.

6. NIFTY or NSE-Fifty is the main index of NSE which consists of 50 shares of 22 dominant
sectors

7. Brokerage is the fee which is charged by the broker for transacting on behalf of his client. Max
brokerage can be charged is 2.5% of the turnover which is recommended by the SEBI

8. Brokers are the direct members of the exchange, sub brokers are the franchisee of brokers.

9. Difference between Equity and Preference Shares-Equity share holders are real
owner of the business and they have the voting right in the company. At the time of
winding up of the business this are the people who share the benefits at last.

Preference share holders are have preferential right but

They are not real owner of the business. At the time of
Winding up they get there benefit irrespective of loss or
Gain in the business before the equity share holders.

10. Derivatives are the contract between two parties to buy/sell a particular asset(Underlying Asset)
at a pre-agreed price (Strike Price) on a Specific Day (Settlement).

11. There are many types of derivatives but in India two derivative contracts are traded they are
Futures and Options.

12. Forward Contract is a over the counter derivative or a private agreement between two parties
where exchange is not involved. It has a high counterparty risk and no margining system.

13. Futures Contract is an exchange traded derivative which has a proper margining system and
settlement guarantee mechanism.

14. Strike Price is a price on which the buyer and seller agrees to trade a contract
15. In India, we can trade in contracts which has an expiry upto 3 months.

16. Underlying asset can be anything whose price fluctuates, but in our scenario the main underlying
assets are Index, Stocks, Commodities and Currencies.

17. Call Option gives a right but not the obligation to BUY any particular asset at a pre agreed
price.

18. Put Option gives a right but not the obligation to SELL any particular asset at a pre agreed
price.

19. Hedging is a strategy to safeguard our investments from market risks

20. Arbitrage is a process of buying a share from one market at a lower price and consequently
selling the same share in another market

21. Arbitrage can be done internationally if the particular stock is listed in both the countries.