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Financial Glossary

Glossary Term
What it Means
Value Investor

Value investor is a fundamental investor who selects stocks which appear to trade for less than their intrinsic value. Value investors actively seek out the stocks they believe the market has undervalued, either due to market perception or due to some structural changes that are forthcoming. Warren Buffett is one of the classic examples of value investing in the world. Value investors are not driven by momentum but purely by the extent to which stock is undervalued.

Value Stocks

A value stock is a stock that tends to trade at a lower price relative to its fundamentals, such as dividends, earnings and sales, making them appealing to value investors. Value investors are normally picked by long term investors and value investors who propose to hold on to the stock for a long time into the future. Volatility does not affect them!

Volatile

A stock is considered volatile if the fluctuations in the stock price in any given timeframe are too high. The most volatile stocks may demonstrate price fluctuations of up to several percentage points during the day. A stock is considered to be a volatile stock if the standard deviation is too high or if the variance is too high.

Volatility

Volatility means that a security's value fluctuates dramatically and hence tends to be less steady. There are different measures of volatility. Systematic volatility can be measured by Beta whereas the overall volatility can be measured by the standard deviation. Normally, volatility of a stock and its value are negatively related. The markets don't like volatility and that is why there is a premium valuation on stocks that are less volatile.

Volume

Trading Volume is a measure of the total shares that have changed hands for a specific time period. The trading volume can be measured as number of shares or in terms of value. For large cap companies, it is the number of shares that is more relevant whereas for mid caps and small capos it is the value that is more relevant. Trading volumes help to underline and ratify the signals given by price.

Venture Capital

Venture capital or Venture financing is a type of private equity. It is a form of financing that is provided by firms or funds to small, early-stage, emerging firms that are deemed to have high growth potential, or which have demonstrated high growth. Venture financing is a high risk business. Typically, venture financers have a time frame of 6-8 years at the bare minimum and they look for substantially higher than the equity index hurdle rate.

Vega

Vega of an option or simply the option Vega is a measure of the impact of changes in the underlying volatility on the option price. Specifically, the Vega of an option expresses the change in the price of the option for every 1% change in underlying volatility. There is a positive impact of volatility on the price of an option because option values of a call and put option tend to benefit from higher volatility as it enhances the time value of an option.

Vertical Spread

Vertical Spread are one of the most popular strategies in derivatives and entail a long / short position so as to optimize the risk return trade off. A vertical spread, involves buying and selling a call, a call spread, or buying and selling a put, a put spread, of the same expiration but different strikes. A vertical spread can be bullish or bearish and can be for debit or credit. Normally, the net debit becomes the maximum loss or risk on the strategy in vertical spread.

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KYC is a one-time exercise while dealing in securities markets - once KYC is done through a SEBI registered intermediary (broker, DP, Mutual Fund etc.), you need not undergo the same process again when you approach another intermediary. | Investors don’t need to issue cheques while subscribing to IPOs. Just write your bank account number and sign the application form to authorise your bank to make a payment on your behalf in case of allotment. You don’t have to worry about refunds as the money remains in the investor's account. | It has been brought to the notice of SEBI by Central Economic Intelligence Bureau, Department of Revenue, GOI, that certain fraudsters are collecting data of customers who are already into trading either in NSE / BSE and send them bulk messages on the pretext of providing investment tips and luring them to invest with them in their bogus firms by promising huge profits. Hence, the investors are requested to take note of the above and exercise caution and due care. | Process for filing complaints on the SEBI SCORES website: a. Register on SEBI SCORES | b. Mandatory details for filing complaints on SCORES | Name, PAN, Address, Mobile Number, Email ID | c. Benefits: i. Effective Communication ii. Speedy redressal of the grievances
KYC is a one-time exercise while dealing in securities markets - once KYC is done through a SEBI registered intermediary (broker, DP, Mutual Fund etc.), you need not undergo the same process again when you approach another intermediary. | Investors don’t need to issue cheques while subscribing to IPOs. Just write your bank account number and sign the application form to authorise your bank to make a payment on your behalf in case of allotment. You don’t have to worry about refunds as the money remains in the investor's account. | It has been brought to the notice of SEBI by Central Economic Intelligence Bureau, Department of Revenue, GOI, that certain fraudsters are collecting data of customers who are already into trading either in NSE / BSE and send them bulk messages on the pretext of providing investment tips and luring them to invest with them in their bogus firms by promising huge profits. Hence, the investors are requested to take note of the above and exercise caution and due care. | Process for filing complaints on the SEBI SCORES website: a. Register on SEBI SCORES | b. Mandatory details for filing complaints on SCORES | Name, PAN, Address, Mobile Number, Email ID | c. Benefits: i. Effective Communication ii. Speedy redressal of the grievances

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