Reference

Glossary

127 terms, grouped by where they show up in the curriculum. Every definition here is the same one taught in its unit — nothing redefined separately.

Money & Foundations

Asset class: A category of things that carry tradeable value — stocks, bonds, gold, real assets, cash.
Bonds / fixed income: A structured loan to a government or company that pays a fixed return.
Credit score: A track record of repayment behavior, not a fixed judgment of a person's worth.
Diversification: Spreading money across different things so no single wrong call sinks the whole outcome.
Emergency fund: Money set aside to protect calm decision-making during a disruption — not to grow wealth.
Good debt / bad debt: Whether a loan builds future capacity or only buys present comfort.
Inflation: The general rise in prices over time that makes the same rupee amount buy less.
Mutual funds: A pool of many investors' money, professionally managed and invested on their behalf.
Nominal value: The face amount of money, unadjusted for inflation.
Purchasing power: What your money can actually buy — as opposed to the number printed on it.
Real assets: Physical things that hold value, like property or gold.
Risk transfer: Paying a small, predictable cost (like insurance) so someone else carries a large, uncertain loss.
Savings-like instruments: Low-risk places to protect money, like FDs and savings accounts, rather than grow it.

Stock Market Mechanics

Broker: Executes the buy/sell decision you've already made — it doesn't make that decision for you.
BSE (Bombay Stock Exchange): India's other major exchange, alongside NSE.
CDSL: India's other depository, alongside NSDL.
Demat account: Where your shares actually rest once you own them, held electronically, separate from your broker's app.
FII (Foreign Institutional Investor): A large foreign entity investing in Indian markets.
IPO (Initial Public Offering): A private company selling shares of itself to the public for the first time.
Limit order: An order that only executes at a price you specify, or better.
Market maker: A participant whose standing willingness to buy or sell keeps trading possible.
Market order: An order to buy or sell immediately at the best available price.
NSDL: One of India's two depositories — the independent electronic record-keeper of who owns which shares.
NSE (National Stock Exchange): India's exchange where the venue for buying and selling equity/derivatives sits — it hosts trading, it doesn't set prices.
Retail investor: An individual investing their own money, as opposed to a large institution.
SEBI (Securities and Exchange Board of India): The regulator that sets and enforces market rules — it doesn't buy, sell, or set prices itself.
Settlement: The behind-the-scenes process that verifies and transfers real ownership after an order is matched.
Share: A small slice of ownership in a company.
Trading account: Where you place an order — the decision, not the ownership.

Reading a Business & Financial Statements

Asset allocation: Dividing money across asset types (equity, debt, gold, cash) by percentage, decided in advance.
Assets: Everything of value a company owns.
Balance sheet: A snapshot of what a company owns and owes at one specific moment — not a record of performance over time.
Cash flow statement: Tracks the actual cash moving through operating, investing, and financing activities — a truth-check on reported profit.
Current ratio: Current Assets ÷ Current Liabilities — a signal of short-term survivability.
Debt-to-equity ratio: How much of a company is financed by debt versus owners' equity.
Equity: What's genuinely left for owners once every debt is subtracted (Assets minus Liabilities).
Intrinsic value: A business's estimated true worth, independent of its current market price.
Liabilities: Everything a company owes to someone else.
Margin of safety: (Estimated Value − Price) ÷ Estimated Value — the buffer that protects you if your estimate is wrong.
Moat / competitive advantage: Whatever makes a business hard for a competitor to copy or dislodge.
Net profit: What's left after all expenses are subtracted from revenue.
P/E ratio: Price per Share ÷ Earnings per Share — how much you're paying today for each rupee of current profit.
P&L (Profit & Loss) statement: The story of a specific period — what a company earned, spent, and kept.
Position sizing: Deciding how much to put into one holding — a separate decision from whether to invest in it at all.
Rebalancing: Restoring a portfolio to its planned proportions by trimming what's grown and adding to what's lagged.
Revenue: What a company earned from its actual business, before expenses.
ROE (Return on Equity): Net Profit ÷ Shareholder's Equity — how efficiently a company turns owners' money into profit.

Charts & Technical Trading

Bollinger Bands: A moving average with bands added above and below, based on how far prices typically spread from it.
Breakout: Price moving decisively past a known support or resistance level.
Candlestick: A chart symbol recording the open, high, low, and close of one time period.
Chart pattern: A visual record of repeated buyer/seller behavior at a price level (e.g. double top, head and shoulders) — not a prediction.
MACD: The difference between a 12-day and 26-day EMA, used to read a shift in momentum.
Moving average: The average price over a rolling window of recent periods.
Risk-reward ratio: Potential gain divided by potential loss on a trade — fixed before entering, not judged after.
RSI (Relative Strength Index): A 0-100 measure of recent average gains versus average losses — a description of momentum, not a guarantee.
Stop-loss: A pre-decided exit price that replaces in-the-moment hoping with a decision made in advance.
Support / resistance: Price levels where past buying or selling pressure has reacted before — a probability-based clue, not a wall.
Uptrend / downtrend / sideways market: Price direction read from the pattern of highs and lows over time, not from a single price point.
Volume: How many shares actually traded — used to confirm or question a price move.
VWAP (Volume-Weighted Average Price): The average price weighted by how much volume traded at each level, resetting every trading day.

Derivatives & Options

Basis: The gap between a futures price and its spot price, which narrows as expiry approaches.
Breakeven point: The price at which a position neither gains nor loses money.
Call option: The right — not the obligation — to buy something at a fixed price later.
Delta: How much an option's price is expected to move for a ₹1 move in the underlying, right now.
Expiry date: The fixed date on which a contract ends and must be settled or closed.
Futures contract: An agreement made today to buy or sell something at a fixed price on a fixed future date.
Gamma: How fast an option's Delta itself changes as the underlying moves.
Gap risk / tail risk: The risk that a sudden price jump or a rare extreme move defeats an ordinary risk-management tool.
Implied volatility (IV): The market's forward-looking expectation of how much a price will move.
India VIX: A real number published daily by NSE, measuring the market's expected near-term volatility.
Intrinsic value / time value: The two components of an option's premium: real current value, plus value from time remaining.
ITM / ATM / OTM: In-, At-, or Out-of-the-Money — whether an option's strike is favorable, equal, or unfavorable versus current spot price.
Lot size: The fixed minimum quantity a contract can be traded in — set by the exchange, not negotiable.
Mark-to-market (MTM): The daily process of crediting or debiting gains/losses on an open futures position.
Option chain: A table listing calls and puts across strike prices for one underlying.
Payoff: The profit or loss at a given price, before subtracting the premium paid.
Portfolio heat: Total capital at risk across all open positions, expressed as a percentage of total capital.
Premium: The price paid for holding an option's right, separate from whether that right is ever used.
Put option: The right — not the obligation — to sell something at a fixed price later.
Realised volatility (RV): How much a price has actually already moved, looking backward.
Rollover: Deliberately closing an expiring futures position and opening a similar one in a later cycle.
Spread: Buying one option and selling another so the premiums partly offset, capping both loss and gain.
Straddle / strangle: Buying a call and a put together — a bet on the size of a move, not its direction.
Strike price: The fixed price boundary an option gives the holder the right to transact at.
Theta: The value an option loses each day purely from time passing, all else unchanged.
Tick size: The smallest allowed price step a contract can move in.
Vega: The change in an option's value for every 1-point change in implied volatility.

Professional Market Analysis

Bid-ask spread: The gap between the best buy and sell price on offer — a real, comparable trading cost.
Correlation: How closely two holdings' prices move together, from fully together to fully independent.
Expected value: The probability-weighted average outcome of a repeated decision.
High-volume / low-volume node: A price zone where the crowd traded heavily, or barely traded at all, respectively.
In-sample / out-of-sample data: Data used to build a rule, versus data used to actually test it — only the second counts as real evidence.
Long buildup / short buildup / short covering / long unwinding: The four ways price and OI can move together — each meaning something different about whether a move has fresh conviction behind it.
Lookahead bias: A backtest that looks smarter than it honestly could have been, by using information not available at the time.
Maximum drawdown: The largest peak-to-trough decline a portfolio experienced along the way.
OI wall: A large Open Interest cluster at one strike, read as probable — never guaranteed — support or resistance.
Open Interest (OI): The number of outstanding, not-yet-closed derivative contracts.
Order book / market depth: The stack of waiting buy and sell orders at multiple price levels, not just the top price shown.
Overfitting: Tuning a rule so tightly to past data that it captures noise instead of a real pattern.
PCR (Put-Call Ratio): Total Put OI ÷ Total Call OI — a read of where the crowd is currently positioned.
Point of Control (POC): The single price level with the highest traded volume in a session.
Price discovery: The continuous process of buyer and seller orders being matched — this is what actually sets a price.
Risk-adjusted return: Return divided by volatility — judges performance per unit of risk taken, not raw return alone.
Survivorship bias: A track record that looks better than reality because failures were quietly excluded.
Total return: A portfolio's overall gain or loss from starting to ending value.
Value Area: The price range built outward from the POC that covers roughly 70% of a session's volume.

Global Markets & Alternative Assets

Bond: A structured loan an investor gives to a government or company.
Commodity: A raw material or agricultural product, standardized enough to trade on an exchange.
Currency pair / base currency / quote currency: How one currency's value is expressed relative to another (e.g. USD/INR = how many rupees per dollar).
Exchange rate: The price of one currency in terms of another, moving on demand and supply like any other price.
Face value / coupon / maturity: A bond's three basic terms: what it repays, what it pays annually, and when it ends.
MCX (Multi Commodity Exchange): India's exchange for trading commodities like gold, silver, and crude oil — it standardizes contracts, not prices.
REIT / InvIT: A tradeable unit representing a pooled, professionally managed share of real estate or infrastructure income.
Risk-on / risk-off: Market-wide regimes where money broadly moves toward growth assets (risk-on) or safe havens (risk-off).
S&P 500 / FTSE 100 / DAX: Scoreboard indices summarizing a basket of a country's major listed companies (US, UK, Germany respectively).
Safe-haven assets: Assets, like gold, that tend to hold or gain value when broader markets grow fearful.
Yield curve: A chart plotting yield against maturity for bonds of the same issuer — normal slopes up, inverted slopes down.

Decision-Making & Behavioral

Anchoring: Letting the first number you see become the reference point everything else gets judged against.
Confirmation bias: Noticing evidence that agrees with an existing belief while skipping evidence that doesn't.
Decision journal: A record of a decision's situation, reasoning, and expected outcome range — written before the outcome is known.
First-principles thinking: Reasoning from bedrock, verifiable facts rather than "everyone already does it this way."
Observing Self / Reacting Self: Responding to what's actually happening (Observing) versus responding to a feeling (Reacting).
Overconfidence: The gap between how sure you feel and how often you're actually right.
Pre-mortem: Asking "what would have to be true for this to turn out to be a mistake?" before deciding.
Process vs. outcome: Judging a decision by the quality of the reasoning at the time, not by how it happened to turn out.
Recency bias: Giving the most recent event outsized weight over an equally important older one.
Reversible / irreversible decision: Whether a decision can be easily undone — should set how much thinking-effort it deserves.