Market Pulse

Indian Market Glossary

One term each trading day in the newsletter — permanently archived here. Plain definitions of how Indian markets actually work.

• ADR/GDRADRs and GDRs are overseas depositary receipts that represent shares of Indian companies traded in foreign markets.
• AIF categoriesAlternative Investment Funds in India are classified into Category I, II, and III under SEBI AIF regulations.
• AllotmentAllotment is the process of allocating IPO or OFS shares to successful applicants.
• Anchor investorAnchor investors are QIBs who receive a pre-IPO allocation under SEBI ICDR on the day before the issue opens to the public.
• Application moneyApplication money is the amount an investor commits and blocks or pays when applying for a public issue.
• ASBAASBA lets IPO applicants block application money in a bank account until allotment is finalised.
• ASMAdditional Surveillance Measure is an NSE/BSE framework that places selected securities under tighter market watch.
• ASM stagesASM stages are progressive short-term and long-term surveillance levels under Additional Surveillance Measure.
• Auction settlementAuction settlement is the NSE/BSE and clearing-corporation process used when a seller fails to deliver shares.
• Auto square-offAuto square-off is the broker’s automatic closure of intraday positions near the end of the session.
• Bad deliveryBad delivery is largely obsolete historical vernacular for paper securities or documents that failed settlement validation.
• BasisBasis is the difference between an NSE futures price and the underlying cash spot, such as Nifty or a stock future versus cash.
• Block dealsBlock deals are large negotiated trades executed in a dedicated NSE/BSE window at a single price.
• Bonus issueA bonus issue credits additional free shares to existing shareholders from reserves.
• Book value vs market valueBook value is accounting net worth per share, while market value is what investors currently pay on the exchange.
• Bracket orderA bracket order places an entry along with predefined profit-target and stop-loss legs.
• BSEBSE is Asia’s oldest stock exchange and a major Indian marketplace for equities and other securities.
• BTSTBuy Today Sell Tomorrow is selling shares on the next trading day before they settle into demat under T+1.
• Bulk dealsBulk deals are client trades that cross an exchange-defined share of a stock’s equity on a single day and are disclosed.
• Buyback taxBuyback tax refers to the tax treatment that has applied when Indian companies repurchase their own shares.
• Buyback tender offerA buyback tender offer invites shareholders to offer shares to the company at a fixed buyback price under SEBI rules.
• Call auctionA call auction matches buy and sell orders at a single equilibrium price during a defined matching window.
• Cash-futures arbitrageCash-futures arbitrage trades the mispricing between the equity cash market and the futures contract.
• CDSLCentral Depository Services Limited is one of two SEBI-registered securities depositories in India, alongside NSDL.
• Circuit limitsNSE/BSE dynamic price bands that cap how far a security can trade in a session under exchange surveillance rules.
• Closing auctionThe NSE/BSE closing session helps determine the official closing price used for indices and mutual fund NAVs in India.
• CNC vs MIS vs NRMLCNC, MIS, and NRML are common order product codes that decide settlement intent and margin treatment.
• Commodity options in IndiaCommodity options are exchange-traded puts and calls on commodity underlyings such as crude, gold, or agri contracts.
• ConsolidationShare consolidation combines multiple shares into fewer shares and raises face value proportionately under NSE/BSE corporate-action processes.
• Convertible debenturesConvertible debentures are debt instruments that can convert into equity shares on specified terms.
• Cover orderA cover order is an intraday order that requires a compulsory stop-loss along with the entry.
• CPI IndiaIndia’s Consumer Price Index measures retail inflation and is a key input for RBI policy and market pricing.
• CTCLComputer-to-Computer Link is the connectivity framework brokers use to route electronic orders to the exchange.
• Delivery percentageDelivery percentage is the share of traded volume that results in actual demat delivery rather than intraday square-off.
• DematA demat account holds securities in electronic form with a depository participant in India.
• DIIDomestic Institutional Investors include Indian mutual funds, insurers, banks, and similar local institutions.
• Dividend yieldDividend yield is the annual dividend per share divided by the current market price.
• DRHPA Draft Red Herring Prospectus is the offer document filed with SEBI before a public issue.
• Equity deliveryEquity delivery trading means buying shares to hold in demat or selling shares already held.
• Ex-dateThe ex-date is the first trading day when a stock trades without the right to a declared corporate benefit.
• F&O expiryF&O expiry is the date when futures and options contracts settle and cease to trade.
• Face valueFace value is the nominal per-share value stated in a company’s capital structure and shown on exchange factsheets.
• FCCBForeign Currency Convertible Bonds are foreign-currency bonds issued by Indian companies that can convert into equity.
• FIIForeign Institutional Investors are overseas institutions that invest in Indian securities under regulatory registration.
• Free-float market capFree-float market capitalisation values only shares available for public trading, excluding locked-in promoter blocks as defined by index rules.
• GIFT NiftyGIFT Nifty is the Nifty futures contract traded from GIFT City and the current offshore overnight cue for Indian equities.
• Grey market premiumGrey market premium is an unofficial pre-listing premium quoted by informal dealers for IPO shares.
• GSMGraded Surveillance Measure is a staged framework for securities showing abnormal price behaviour.
• GST collectionsGST collections measure monthly Goods and Services Tax receipts and are used as a proxy for formal economic activity.
• HaircutA haircut is the percentage reduction applied to a security’s value when it is accepted as collateral.
• Iceberg orderAn iceberg or disclosed-quantity order on NSE/BSE shows only a slice of total size while hiding the balance.
• IIPThe Index of Industrial Production tracks monthly output across mining, manufacturing, and electricity in India.
• Impact costImpact cost measures how much the executed price moves away from the ideal mid price for a given order size.
• Implied volatilityImplied volatility is the volatility level embedded in an option’s market price using an options pricing model.
• Index reconstitutionIndex reconstitution is the periodic review that adds or removes stocks from benchmarks like Nifty or Sensex.
• Intraday tradingIntraday trading means opening and closing positions within the same trading session.
• InvITsInfrastructure Investment Trusts pool investor capital into infrastructure assets such as roads, power, or telecom towers.
• ISINISIN is the unique twelve-character International Securities Identification Number assigned to a security.
• Listing day circuitListing-day circuits are NSE/BSE price bands that can apply when a newly listed IPO stock begins trading.
• Listing gainsListing gains are the price difference between an IPO issue price and the price at which the stock lists.
• Lot sizeLot size is the fixed number of shares underlying one futures or options contract on the exchange.
• Lower circuitA lower circuit is when a stock trades at the lower end of its NSE/BSE price band for the session.
• LTCG on equityLong-term capital gains on listed equity arise when shares held beyond the statutory long-term period are sold at a profit.
• Mainboard IPOA mainboard IPO lists a company on the primary boards of NSE or BSE under full IPO regulations.
• Margin pledgeMargin pledge is the SEBI-compliant process of pledging securities specifically to meet trading margin needs.
• Mark-to-marketMark-to-market is the daily revaluation of positions to current market prices with resulting cash flows.
• Market-wide position limitMWPL is the SEBI and exchange cap on aggregate futures and options positions in a stock or index across the market.
• MTFMargin Trading Facility lets eligible clients buy equities by paying part of the value as margin.
• Muhurat tradingMuhurat trading is a special auspicious trading session conducted around Diwali on Indian exchanges.
• NCDsNon-Convertible Debentures are debt instruments that cannot be converted into equity shares.
• Nifty 50Nifty 50 is NSE’s flagship free-float market-cap index of fifty large Indian companies.
• NSDLNational Securities Depository Limited is India’s first securities depository and one of two SEBI-registered depositories with CDSL.
• NSEThe National Stock Exchange of India is the country’s largest stock exchange by equity and derivatives turnover.
• OFSAn Offer for Sale is a exchange mechanism for promoters or shareholders to sell existing shares to the public.
• Open interestOpen interest is the number of outstanding derivative contracts that have not been closed or settled.
• Open market buybackAn open market buyback is when a company purchases its shares on NSE/BSE over a period under SEBI Buyback Regulations.
• Peak marginPeak margin rules require clients to meet margin based on peak intraday exposure snapshots under the current SEBI and exchange framework.
• Physical settlement of F&OPhysical settlement means stock derivative positions at expiry are settled by delivery of shares rather than only cash.
• Pledge and unpledgePledge locks demat shares as collateral in the depository, and unpledge releases them back to free holdings.
• Pre-open sessionThe pre-open session is the morning call-auction window used to discover the opening price on NSE and BSE.
• Preferential allotmentPreferential allotment issues shares or convertibles to a select set of investors rather than the public at large.
• Price bandA price band is the permitted percentage range around a reference price within which an NSE/BSE stock may trade.
• Price-to-bookPrice-to-book compares market price with reported book value per share.
• Price-to-earningsThe price-to-earnings ratio compares a stock’s market price with its earnings per share.
• Promoter pledgingPromoter pledging is when company promoters pledge shares as collateral for borrowing.
• Put-Call RatioThe Put-Call Ratio compares put activity with call activity using volume or open interest.
• QIPA Qualified Institutions Placement is a way listed Indian companies raise equity from institutional investors.
• RBI policyRBI policy refers to Monetary Policy Committee decisions on stance, liquidity, and communication that shape Indian rates.
• Record dateThe record date is the cut-off date used to identify shareholders eligible for a corporate benefit.
• REITsReal Estate Investment Trusts are SEBI-regulated trusts that own income-producing real estate and list units on exchanges.
• Repo rateThe repo rate is the RBI policy rate at which banks borrow overnight under the liquidity adjustment framework.
• Rights issueA rights issue offers existing shareholders the chance to buy new shares in proportion to their holdings.
• RolloverRollover is closing a near-month futures position and opening the same view in a later expiry.
• SEBIThe Securities and Exchange Board of India is the primary regulator of securities markets in India.
• Securities lendingSecurities lending is the economic act of temporarily transferring shares to a borrower for a fee against collateral.
• SensexThe Sensex is BSE’s thirty-stock free-float benchmark index for large Indian equities.
• Short selling in IndiaShort selling in India is regulated by SEBI and exchanges and generally requires borrowed shares or derivative hedges.
• SLBMSLBM is the named NSE/BSE Securities Lending and Borrowing Mechanism for lending and borrowing shares in India.
• SME IPOAn SME IPO is a public listing on the SME platforms of NSE or BSE designed for smaller companies.
• SPAN marginSPAN margin is a portfolio-based initial margin system widely used for Indian futures and options.
• Square-offSquare-off means closing an open Indian market position by taking an opposite trade in the same security or contract.
• Stamp duty on equityStamp duty is a distinct levy on specified securities transfers, separate from brokerage, STT, and CTT.
• STBTSell Today Buy Tomorrow is a retail sequence label for selling first and buying back the next session when shorting mechanics allow.
• STCG on equityShort-term capital gains on listed equity apply when shares are sold before completing the long-term holding period.
• Stock splitA stock split reduces face value and increases the number of shares so that overall capital remains proportionate.
• Stop-lossA stop-loss is an order that becomes active when the market reaches a trigger price to limit further losses.
• Strike priceThe strike price is the predetermined price at which an options contract can be exercised.
• STTSecurities Transaction Tax is a levy on specified equity and equity-derivative market transactions in India.
• STT vs CTTA comparison entry: STT covers specified securities-market trades, while CTT covers specified commodity derivative trades.
• T+0 settlementOptional same-day settlement for an exchange-notified list of eligible cash equities, running alongside default T+1.
• T+1 settlementT+1 is the default rolling settlement cycle for cash equities on NSE and BSE.
• Tick sizeTick size is the minimum price increment in which a security’s orders can be placed.
• Trade-to-tradeTrade-to-trade settlement requires every trade in a stock to be settled by delivery, with no intraday netting.
• TWAPTime-Weighted Average Price strategies slice an order evenly across time regardless of volume spikes.
• UPI ASBAUPI ASBA is the UPI-based channel for ASBA in public issues under the SEBI, NPCI, and exchange process.
• Upper circuitAn upper circuit is when a stock trades at the upper end of its NSE/BSE price band for the session.
• VaR marginValue-at-Risk margin is a statistical margin component charged on cash-market positions based on price volatility.
• VWAPVolume-Weighted Average Price is the average price of trades weighted by the size of each trade.
• WarrantsWarrants give holders the right to subscribe to equity shares at a predetermined price within a set period.
• Z groupThe Z group on BSE is a surveillance classification for companies that have not complied with exchange listing requirements.