Stock Market Glossary

A Back End Load or Exit Load is a commission or fee charged when an investor sells or exits a mutual fund. This fee is not applied by all fund houses and represents an additional cost that investors need to bear. To learn more, click here

A Balanced Mutual Fund invests in a mix of equity and debt assets, aiming to generate returns from both. It is designed for risk-averse investors seeking higher returns, providing a diversified investment option that balances potential growth with relative safety.

Basis is the difference between the futures price & the current cash price of the same commodity. It is calculated as the cash price minus the futures price. Changes in basis impact the effectiveness of futures as a hedging tool, typically using the nearest contract month. To learn more, click here

Basis Allotment is the process of allocating shares to shareholders, typically seen in an IPO. Shares are distributed based on prior agreements and specific conditions that must be met before issuance, ensuring an orderly allocation among investors participating in the offering.

Basket Trades involve buying or selling a group of securities simultaneously. Typically used by institutional investors, this strategy allows traders to execute multiple trades at once, often for managing portfolios or replicating an index, helping to save time and reduce transaction costs.

The Bid is the highest price a buyer is willing to pay for a security, while the Ask is the lowest price a seller is willing to accept. The difference between the Bid and Ask prices is called the spread, influencing trading and liquidity.

A Bluechip Fund is a mutual fund that invests in bluechip stocks, which are large, established companies with a proven track record of stable returns. These stocks tend to perform well even in adverse market conditions. Investors can track performance using the Bluechip Index. To learn more, click here

Bonds are fixed-income securities issued by governments or corporations in exchange for a loan. They provide a fixed interest rate over a specified time period. The quality of a bond is determined by its credit rating, reflecting the issuer's creditworthiness. To learn more, click here

Book Building is a price discovery method used during an IPO, where the company issuing shares does not fix a specific price. Instead, an underwriter invites institutional investors to submit bids within a price range, which helps determine the final issue price based on demand. To learn more, click here

A Bounce occurs when a stock hits a support level, where its price resists further decline, and then sharply rebounds upward. This support can be represented by a trend line, moving average, or a combination of technical indicators, signaling a potential price reversal.

A Bracket Order is an intraday trading strategy that helps traders limit losses and lock in profits by placing three orders simultaneously: a buy or sell order, a target order to book profits, and a stop-loss order to limit potential losses. To learn more, click here

A Broker is an intermediary between investors and securities exchanges, facilitating the buying and selling of stocks, ETFs, futures, and options. Only registered brokers, whether individuals or firms, can place trades on exchanges, making them essential for investors to access financial markets.

Brokerage refers to the fee an investor or trader pays to a brokerage firm for its services, varying by platform. Generally, brokerage fees for intraday, futures, and options trading are higher than for equity delivery transactions, which involve long-term investing.

The Bombay Stock Exchange (BSE) was established in 1875 and is the oldest stock exchange in India and Asia. It facilitates the issuance of new securities through IPOs and FPOs and enables trading of shares and ETFs, supporting nearly 6,000 companies in India’s capital markets.

A budget refers to a financial plan that outlines how an individual or organization allocates funds for spending and managing expenses. In macroeconomics, it represents the trade-offs made in the exchange of goods, helping to track income and expenditures effectively.

A bull market is a positive trend in the stock market characterized by a price increase of 20% or more following a decline of 20%. Investors often express bullish sentiments when they anticipate sustained growth in the market over time. To learn more, click here

Bullion refers to gold, silver, and other high-purity non-ferrous metals, typically shaped into bars or coins. It is recognized as a legal tender, held by central banks, and is utilized by investors to hedge against inflation and manage portfolios effectively.

The Bureau of Indian Standards (BIS) is responsible for standardizing and certifying goods and services to ensure safety and reliability for consumers. Established in 1986, BIS also certifies gold based on Indian standards for fineness and purity through testing at its centers.

Buy-back (compensation) is a form of countertrade where an exporter of heavy equipment or technology agrees to purchase a certain percentage of the output from a new facility once it begins production. This arrangement benefits both parties involved in the trade.