Learn the markets

A stock is a small piece of ownership in a company. Buy one share of Reliance and you own a tiny slice of the business — and its profits.

Market cap is the total value of a company's shares — share price times number of shares. It's how we sort companies into large-, mid-, and small-cap.

The Sensex (30 stocks, BSE) and Nifty 50 (50 stocks, NSE) are India’s benchmark indices — baskets that show how the overall market is doing.

A demat account holds your shares in electronic form, the way a bank account holds money. You need one (plus a trading account) to buy stocks in India.

A mutual fund pools money from many investors and a professional manager invests it in stocks or bonds. You own units; experts do the picking.

An ETF is a basket of stocks (like an index fund) that trades on the exchange like a single stock — buy and sell it live during market hours.

A dividend is a share of a company’s profit paid out to shareholders — usually cash, per share. One of the two ways stocks make you money.

Compounding is earning returns on your past returns. Given time, it turns steady, ordinary savings into surprisingly large sums.

The P/E ratio tells you how many rupees you pay for every ₹1 of a company’s annual profit. A quick gauge of whether a stock looks cheap or expensive.

EPS is a company’s profit divided by its number of shares — the slice of profit that belongs to each share. The building block of the P/E ratio.

P/B compares a stock’s price to its book value (net assets per share). Especially useful for banks and asset-heavy businesses.

ROE shows how much profit a company generates on shareholders’ money. A core test of how efficiently a business turns equity into earnings.

ROCE measures profit against all the capital a business uses — equity and debt. The fairest way to compare how efficiently different companies use money.

Dividend yield is the annual dividend as a percentage of the share price — how much cash income you get per rupee invested.

Debt-to-equity compares how much a company has borrowed against shareholders’ money. A quick read on how risky its balance sheet is.

F&O are leveraged contracts that bet on price moves without owning the stock. SEBI data shows ~91% of retail F&O traders lose money. Here’s why.

A stop-loss automatically sells your stock if it falls to a set price — a pre-decided exit that caps how much you can lose on a trade.

Circuit limits are exchange-set caps on how far a stock or index can move in a day. Hit the limit and trading pauses or freezes at that price.

A split or bonus increases your share count and lowers the price proportionally — your total value is unchanged. A falling price here is mechanical, not a loss.

Filings are the official disclosures companies must make — results, board changes, deals, fund-raises. They are the primary source, before any news or tip.

A SIP invests a fixed amount regularly; lumpsum invests it all at once. SIPs reduce timing risk and build discipline; lumpsum can win when you have cash and conviction.

An IPO is when a private company first sells shares to the public and lists on the exchange. It’s how you can buy in on day one — with real risks.

SEBI is India’s market regulator. It makes the rules for exchanges, brokers, mutual funds, and advisers — and polices fraud and misleading "tips".