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| Earnings per share : |
It is the most important measure of how well (or otherwise) the board of directors are doing for the shareholders. This measure expresses how much the company is earning for every share held. The calculation is 'pre-tax profit dividend by the number of shares in issue'. Earnings per share is more important than the overall reported profit figure ! The reason is that EPS provides a more pure measure of profitability. |
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| Futures : |
A contract for the purchase and sale of a commodity, financial instrument or index at a fixed price at a fixed date in the future. Futures contracts were originally invented to allow those who regularly buy and sell goods to protect themselves against future changes in the price of those goods. In other words, the futures markets evolved to allow producers or consumers to hedge their risk |
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| Gap : |
When the market opens above or below the previous day's close the price on a bar chart will show a "gap". This may then be "closed" if the market trades at prices between the opening level and the previous day's close. |
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| Growth Fund : |
A mutual funds which invests only in equity shares which offer chances of good capital growth, rather than current income. |
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| Market Order : |
It is an order for which no price has been specified at order entry. |
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| Options : |
The holder of an option contract has the right but not the obligation to buy (call option) or sell (put option) a specific quantity of a given asset at a specified price at or before a specified date in the future. The purchaser pays a non-refundable, one time fee (option premium) to the seller (writer) to acquire this right. If the holder chooses to exercise the right to buy or sell the asset, the writer of the option has to deliver or take delivery of the asset. The potential loss to the option writer is therefore unlimited. |
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| Premium : |
The price of an option (call or put) contract, determined in the competitive market place, which the buyer (holder) of the option pays to its seller (writer) for the rights granted to the former by the option contract. |
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| Put Option : |
The price of an option (call or put) contract, determined in the competitive market place, which the buyer (holder) of the option pays to its seller (writer) for the rights granted to the former by the option contract. |
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| Repo Rate : |
The interest rate at which the RBI lends to other commercial banks, so that they can meet with their liquidity problems. |
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| Reverse Repo Rate : |
The interest rate that a commercial bank earns for lending money to the RBI in exchange for Government securities. |
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