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A moving average is a technical indicator that helps to identify a trend in the price of a stock. Traders also use moving averages to determine support and resistance levels. Thus, by studying moving averages, traders can spot buying and selling opportunities. Some of the widely used moving averages are 5-day and 20-day for short term trading and 50-day and 200-day for long term investment. Courtsey : Upstox (start Karke Dekho) For more about Upstox - Read more....

Net interest margin (NIM) is a ratio used to measure the profitability of a bank or lender. It is calculated by dividing the net interest income (difference between the interest earned and interest paid) by the average interest-earning assets including loans and bonds. For banks and financial institutions, it’s important to have a positive net interest margin. It reflects how effectively they are using the money they have borrowed in the form of deposits or any other debt instrument. Courtsey : Upstox (start Karke Dekho) For more about Upstox - Read more....

Adjusted Gross Revenue (AGR) dues refers to fees or a part of revenue, which all telecom operators must pay to the Indian government for using spectrum, which is publicly-owned. In 1999, the government replaced the fixed license fee model with the revenue-sharing agreement. However, there has been a dispute between telcos and the government over the definition of AGR, which is used to calculate the dues. While the government claims that it encompasses telecom as well as non-telecom revenue, the industry players claim that the AGR should only consist of revenue from the core telecom business. Courtsey : Upstox (start Karke Dekho) For more about Upstox - Read more....

The resistance level refers to a price point from which a stock struggles to move upward. This is a price point where there could be more sellers than buyers, and hence there is resistance to move upward. For traders, the resistance level can serve either as an entry or exit point. If a stock breaches resistance level, it means there is a buying opportunity. And if it struggles at the resistance level, traders can choose to book their profits. Courtsey : Upstox (start Karke Dekho) For more about Upstox - Read more....

A draft red herring prospectus (DRHP) or simply an offer document is the preliminary document which a company submits to the market regulator SEBI before listing on the stock markets. The document includes important disclosures about the IPO-bound company such as its business and industry overview, financial statements, growth prospects, risks and even promoters’ background. Further, the document also states the purpose of raising the money. The DRHP has the most authentic and detailed information about the company and hence investors should carefully study it before subscribing to an IPO. Courtsey : Upstox (start Karke Dekho) For more about Upstox - Read more....

Founded in 1960, the Organisation of Petroleum Exporting Countries (OPEC) is made up of 13 oil-exporting nations. These countries produce about 40% of the world’s crude oil and account for around 60% of the total petroleum traded globally. Because of this, their decision to increase or reduce oil supply can significantly impact oil prices. Since 2010, some non-OPEC oil-producing countries (called OPEC allies) such as Russia have also attended the OPEC meeting to decide oil output. Together, the group is referred to as OPEC+. Courtsey : Upstox (start Karke Dekho) For more about Upstox - Read more....

Capital expenditure or capex refers to investment a company makes to acquire or maintain fixed assets, such a plant, machinery or buildings. If a company thinks that the demand for its products or services is increasing, it may invest in upgrading or increasing capacities if its existing capacity may fall short. A company’s capital expenditure is shown on the assets side of the balance sheet. This is because capex is used to create assets for the business rather than as an expense. Courtsey :  Upstox (start Karke Dekho) For more about Upstox -  Read more....

When an owner or promoter of a company takes a loan against his own shares as collateral, it is called promoter pledging. A promoter may pledge his shares for personal financial needs or to fund new investments. While pledging of shares is a common practice, the problem arises when the stock price falls and the bank asks the promoter to pledge more shares or repay a certain portion of the loan. If the promoter is unable to cover the shortfall, the bank may sell the shares, leading to a further fall in the stock price. This may trigger selling from other investors as well, which can turn into a vicious cycle, especially if the company is fundamentally weak. Courtsey : Upstox (start Karke Dekho) For more about Upstox - Read more....

Results based on a constant-currency basis strip off the effect of currency fluctuations and give investors the true picture of the company’s growth. This is because the change in currency prices (appreciation and depreciation) can impact financial numbers of export-oriented companies such as those in the IT and pharma sectors. For instance, rupee depreciation would mean these companies are getting more rupees for each dollar they earn. Courtsey : Upstox (start Karke Dekho) For more about Upstox - Read more....

The cut-off price of an initial public offering (IPO) refers to the price at which the shares are issued to investors. In an IPO, shares are usually offered within a price band. As an investor, one can bid for shares at any price within the price band or simply select the cut-off price option. Instead of bidding, at a specific price, if you apply at the cut-off price, then you are expressing willingness to pay whichever price that shares are issued at. This increases the chances of getting an IPO allotment. Courtsey : Upstox (start Karke Dekho) For more about Upstox - Read more....

A reserve merger refers to a private company taking over a publicly-traded company or when an entity buys out its parent company. In the first case, it is one of the ways for a private company to go public. And in the second case, the reserve merger is done to create a larger company. For instance, in 2002, parent company ICICI  merged  with ICICI Bank to create a large bank that can cater to multiple segments. Courtsey : Upstox (start Karke Dekho) For more about Upstox - Read more....

A bearish trend refers to a downward movement in the prices of stocks or indices. A bearish trend grips the market when traders think that prices will fall due to adverse developments. Thus, it reflects pessimism in traders' sentiments. A market that is witnessing a continuous decline or fall of more than 20%, is called a bear market. Predicting the bearish trend is important from the perspective of profit booking and avoiding losses. Courtsey : Upstox (start Karke Dekho) For more about Upstox - Read more....

Unit economics is a tool to measure a company’s revenue or cost per unit of its product or service. For example, a multiplex chain or an airline would calculate its revenue per seat. Similarly, a telecom operator tracks average revenue per user (ARPU). Understanding a business in this manner helps to forecast profits as the number of customers increases and to alter product specification to cut costs. Unit economics can be used to calculate how much money a business is making per unit after deducting the expenses. For instance, the IPO-bound food-delivery firm Zomato recently reported that it is making ₹22.9 per order after subtracting the delivery cost, discounts to its customers and other variable costs. Courtsey :  Upstox (start Karke Dekho) For more about Upstox -  Read more....

Sectoral rotation refers to the movement of money from one industrial sector to another based on sectoral and macroeconomic factors. For instance, during an economic boom, investors may prefer to invest in sectors such as banking and metals, which tend to outperform the overall markets. Similarly, in a downturn, banks are typically the worst affected, and investors may choose to move money out of banks to sectors such as FMCG or pharma, which have relatively stable demand. To benefit from sectoral rotation, investors need to develop a good understanding of economic and market cycles. Courtsey : Upstox (start Karke Dekho) For more about Upstox - Read more....

Index funds are mutual funds that track or replicate indices such as the Nifty50. Basically, they invest your money only in stocks that are part of a specific index. The allocation of the fund also depends solely on the composition of the index that the fund is tracking. Index funds are considered a part of a passive investment strategy and stand in contrast to active stock picking. The biggest advantage of index funds is that they have lower expenses as compared to actively managed funds. Courtsey : Upstox (start Karke Dekho) For more about Upstox - Read more....

Decentralized Finance or, DeFi, refers to various decentralized protocols built on the blockchain network (mainly the Ethereum network) which are aimed to build an open financial system with transparency, accessibility and inclusiveness. The components of DeFi include smart contracts, protocols, decentralized applications, digital currencies, and more. DeFi is also known as “money lego”, it has entirely license-free access, financial applications can be built, connected and used without restrictions. DeFi aims to use smart contracts to replace traditional institutions in Financial Field, allowing users to enjoy financial services at a lower cost, and improve the operational efficiency of the entire financial system, reduce operational costs. At the same time, DeFi should create a global open borderless financial system, so that everyone can trade freely and transparently.  DeFi projects have two main advantages over traditional centralized financial systems：  1. Individuals wi...

Market breadth refers to the number of stocks that are rising in comparison to those that are falling on an exchange or index such as Nifty50. It reflects the overall health of an index and its sentiments. For instance, if the majority of the stocks are advancing, it means that the sentiment is strong and indicates broader participation. On the other hand, if most stocks are declining, it means that bearish momentum is gaining ground. Courtsey :  Upstox (start Karke Dekho) For more about Upstox -  Read more.... Finance

Listing gains in an initial public offering (IPO) refers to the difference between a company’s issue price and the opening price on the day of listing. For instance, on June 30, the shares of steel manufacturer Shyam Metalics listed at ₹380, a premium of 24% over their issue price of ₹306. Generally, an issue that has been heavily oversubscribed delivers strong listing gains. However, there is no guarantee that this may happen and it also depends on the overall market trend. Courtsey : Upstox (start Karke Dekho) For more about Upstox - Read more....

Alpha refers to the returns generated by an asset in excess to its benchmark index’s returns. For instance, if shares of an auto company rise by 10% in a month against an 8% rise in the benchmark Nifty Auto Index, it means the stock has generated an alpha of 2%. The higher the alpha of an asset, the better it is, and anything more than zero is considered to be a good alpha. On the other hand, beta is a parameter to evaluate an asset’s volatility compared to its benchmark index. A beta of more than 1 means that the asset is more volatile than its benchmark. Conversely, if it’s lower than 1, then it is less volatile than the benchmark. Together, these two metrics help an investor to understand the risk (volatility) and reward (higher returns) related to an asset. Courtsey :  Upstox (start Karke Dekho) For more about Upstox -  Read more....