Indian Financial Markets Glossary

The Trader's Financial Dictionary & Vocabulary

Never get confused by financial jargon again. Search our structured library of derivatives, price action mechanics, and market microstructure terms with real Indian market examples.

Showing 16 of 16 financial definitions

Bear Market

Market Structure

A prolonged period of falling asset prices, typically defined as a decline of 20% or more from recent highs amidst widespread pessimism.

Indian Market Context:The March 2020 market crash triggered a rapid global bear market before aggressive liquidity sparked an unprecedented rebound.

Bull Market

Market Structure

A sustained period during which market prices rise or are expected to rise, driven by strong corporate earnings and investor optimism.

Indian Market Context:The post-pandemic bull run took the Nifty 50 from 7,500 levels to above 25,000 within a few years.

Call Option (CE)

Derivatives

A financial contract giving the buyer the right, but not the obligation, to purchase an underlying asset at a specified strike price on or before expiry.

Indian Market Context:Buying a Nifty 25,000 Call Option when expecting a bullish breakout on the index.

Put Option (PE)

Derivatives

A financial contract granting the buyer the right to sell an underlying stock or index at a set price, used for bearish speculation or downside hedging.

Indian Market Context:Institutional portfolios buy deep out-of-the-money puts as insurance against unexpected geopolitical crashes.

Delta

Derivatives

An options Greek measuring how much the premium of an option contract is expected to move per 1-point change in the underlying asset.

Indian Market Context:An At-The-Money (ATM) Nifty call option typically holds a Delta of roughly 0.50.

Theta Decay

Derivatives

The rate at which an option's extrinsic value erodes as time passes closer to the contract's expiry date.

Indian Market Context:Option sellers capture rapid Theta decay on Thursday weekly index expiry days.

Open Interest (OI)

Derivatives

The total number of open, active derivative contracts that have not yet been settled or closed out by market participants.

Indian Market Context:A massive OI buildup at the 25,500 CE strike indicates a strong resistance wall created by institutional option writers.

Put-Call Ratio (PCR)

Derivatives

The ratio of traded put volume/OI to call volume/OI, widely used by traders as a contrarian market sentiment indicator.

Indian Market Context:A PCR below 0.60 often signals an oversold market condition primed for a sharp short-covering bounce.

Support & Resistance

Technical

Support represents a price zone where buying interest is strong enough to pause a downtrend, while resistance is where selling pressure stops an advance.

Indian Market Context:BankNifty repeatedly finding buying demand around the 51,000 round psychological mark.

Liquidity Sweep

Market Structure

An institutional order flow move where price spikes beyond obvious retail support or resistance to trigger stop-losses before reversing hard.

Indian Market Context:A sudden false 5-minute breakout above yesterday's high that immediately collapses into a massive red candle.

Fair Value Gap (FVG)

Market Structure

An imbalance on a candlestick chart caused by aggressive buying or selling where bids and offers were inefficiently matched.

Indian Market Context:Rahul marks daily FVGs to anticipate high-probability retest bounce entries during morning sessions.

Volume Weighted Average Price (VWAP)

Technical

The benchmark trading price reflecting the ratio of the total value traded to total volume over a given intraday period.

Indian Market Context:Institutions executing large buy orders aim to keep their average fill price below the intraday VWAP line.

Relative Strength Index (RSI)

Technical

A momentum oscillator measuring the speed and velocity of price changes on a scale from 0 to 100.

Indian Market Context:Bullish divergence occurs when stock price makes a lower low but RSI prints a higher low.

Price-to-Earnings Ratio (P/E)

Fundamental

The ratio for valuing a company that measures its current share price relative to its per-share earnings (EPS).

Indian Market Context:Comparing TCS's P/E multiple against Infosys to assess relative IT sector valuation.

Return on Capital Employed (ROCE)

Fundamental

A financial metric that measures how efficiently a company allocates its capital to generate profits.

Indian Market Context:Consistent high-quality multibagger companies often sustain an ROCE above 20% across business cycles.

Circuit Breakers

Market Structure

Mandatory NSE/BSE trading halts triggered when an index or stock moves beyond regulatory limits (10%, 15%, or 20%) within a trading day.

Indian Market Context:Upper circuit halts prevent runaway speculative manipulation on small-cap stocks.

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