Chapter 5 of 5

Market jargon, decoded

6 min read

Market talk is full of shorthand. Here are the terms you will meet most often, in plain language.

Bull market: a long period of generally rising prices. Bear market: a long period of falling prices, commonly described as a fall of 20% or more from a peak.
Correction: a smaller fall, often around 10%, within a longer rise.
Volatility: how much and how quickly prices move.
Liquidity: how easily you can buy or sell without moving the price.
Volume: the number of shares traded. A price move on heavy volume carries more weight than one on thin volume.
Market capitalisation: the share price multiplied by the number of shares, a measure of company size.
Circuit limits: the maximum percentage a stock may rise or fall in a day. Most stocks have bands of 5%, 10% or 20%, and trading halts at the limit.
Free float: the portion of shares available to the public to trade.
52-week high and low: the highest and lowest prices in the last year.
Dividend yield: annual dividend divided by the share price.
Bid and ask: the highest price a buyer will pay and the lowest a seller will accept.

Order types

Market order: buy or sell right now at the best available price.
Limit order: buy or sell only at your chosen price or better.
Stop-loss: an order that triggers to limit a loss if the price moves against you.

Key takeaways

Bull and bear describe direction; correction describes a smaller fall.
Volume and liquidity tell you how reliable a price move is.
Use limit orders when you care about the price you pay.

This content is for education only and is not investment or tax advice. Mutual fund investments are subject to market risks; read all scheme-related documents carefully.