Glossary of Terms
This page explains, in plain words, the stock-market terms and short forms used on this website.
Short forms (abbreviations)
- BSE – BSE Limited, formerly the Bombay Stock Exchange
- One of the two main stock exchanges in India, based in Mumbai.
- CAMS – Computer Age Management Services
- A company that keeps records for mutual funds. It also runs a KYC Registration Agency.
- CDSL – Central Depository Services (India) Limited
- One of the two depositories in India. A depository holds your shares in electronic form.
- CEO – Chief Executive Officer
- The most senior manager of an organisation.
- CKYCR – Central KYC Records Registry
- The central store of KYC records in India, so that an investor’s KYC done once can be used by every financial institution.
- CM – Clearing Member
- A member of a clearing corporation that settles trades.
- CTT – Commodities Transaction Tax
- A tax charged on trades in commodity derivatives.
- CVL – CDSL Ventures Limited
- A company owned by CDSL that runs a KYC Registration Agency.
- DDPI – Demat Debit and Pledge Instruction
- A document by which you allow your broker to move securities out of your demat account only for settling your trades and for pledging as margin.
- DP – Depository Participant
- A bank or broker through which you open and use a demat account with a depository.
- FAQ – Frequently Asked Questions
- A list of common questions with their answers.
- F&O – Futures and Options
- Two kinds of derivative contracts that are traded on a stock exchange.
- FY – Financial Year
- The 12 months from 1 April to 31 March used for accounts in India.
- GST – Goods and Services Tax
- The tax charged on brokerage and other service charges.
- GTCO – Good Till Cancelled Order
- An order to buy or sell that stays open until it is carried out or you cancel it. A Good Till Date order stays open until a date you choose.
- IPF – Investor Protection Fund
- A fund kept by a stock exchange to compensate investors when a broker defaults.
- IPO – Initial Public Offering
- The first time a company offers its shares for sale to the public.
- KMP – Key Managerial Personnel
- The senior people who are responsible for running a firm.
- KRA – KYC Registration Agency
- An agency registered with SEBI that stores investors’ KYC records, so the same records can be used by every broker and fund.
- KYC – Know Your Customer
- The checks a financial firm must do to confirm who you are and where you live before you can invest.
- LLP – Limited Liability Partnership
- A type of business in which the partners are not personally responsible for all of the firm’s debts.
- MF – Mutual Fund
- A fund that collects money from many investors and invests it for them.
- MII – Market Infrastructure Institution
- A stock exchange, clearing corporation or depository.
- MITC – Most Important Terms and Conditions
- A short standard list of the key terms between a broker and a client.
- MSEI – Metropolitan Stock Exchange of India
- A stock exchange in India recognised by SEBI.
- NDML – NSDL Database Management Limited
- A company owned by NSDL that runs a KYC Registration Agency.
- NSDL – National Securities Depository Limited
- One of the two depositories in India. A depository holds your shares in electronic form.
- NSE – National Stock Exchange of India
- One of the two main stock exchanges in India, based in Mumbai.
- ODR – Online Dispute Resolution
- Settling a dispute online through conciliation or arbitration, on the SMARTODR portal.
- OTP – One-Time Password
- A code sent to your phone or email that can be used only once, to prove that it is really you.
- PAN – Permanent Account Number
- The ten-character tax identity number issued by the Income Tax Department of India.
- PML – Prevention of Money Laundering
- The rules, set out in the Prevention of Money Laundering Act, 2002, that stop money from crime being passed off as legal money.
- QR – Quick Response
- A QR code is a square pattern that a phone camera can scan, for example to make a payment.
- RMS – Risk Management System
- The limits and checks a broker uses to control the risk of clients’ trades.
- SCORES – SEBI Complaints Redress System
- The online system of SEBI where an investor can file a complaint against a company or a broker and follow its progress.
- SEBI – Securities and Exchange Board of India
- The government regulator of the securities markets in India.
- SMS – Short Message Service
- A text message sent to a mobile phone.
- SOP – Standard Operating Procedure
- A fixed, written way of carrying out a process.
- STT – Securities Transaction Tax
- A tax charged on trades in securities on a stock exchange.
- TM – Trading Member
- A stock broker that is a member of a stock exchange and is allowed to trade on it.
Other terms
- Allotment
- The shares you are actually given when you apply in an IPO.
- Cash market
- The part of the stock market where shares themselves are bought and sold, and paid for in full.
- Consolidated account statement
- One statement that lists everything you hold across your demat accounts and mutual funds.
- Demat account
- An account that holds your shares and other securities in electronic form instead of on paper.
- Depository
- An organisation that holds investors’ securities in electronic form. India has two: NSDL and CDSL.
- Derivatives
- Contracts whose value depends on the price of something else, such as a share or an index. Futures and options are derivatives.
- Escalation matrix
- A list that shows whom to contact next if your complaint is not solved.
- Futures
- A contract to buy or sell something at a fixed price on a fixed date in the future.
- Grievance redressal
- The process of looking into a complaint and putting it right.
- Intermediary
- A firm registered with SEBI that stands between you and the market, such as a broker, a depository participant or a mutual fund.
- Margin
- Money or securities you must give your broker as security before you trade.
- Options
- A contract that gives you the right, but not the duty, to buy or sell something at a fixed price by a fixed date.
- Pledge
- Marking your securities as security for your broker. They stay in your own demat account.
- Securities
- Things that can be traded in the financial markets, such as shares, bonds and mutual fund units.
- Short sell
- Selling a share you do not own, hoping to buy it back later at a lower price.
- Stock broker
- A firm registered with SEBI that buys and sells securities on a stock exchange for its clients.
- Stock exchange
- A regulated market where shares and other securities are bought and sold.
- Trading member
- A stock broker that is a member of a stock exchange and is allowed to trade on it.
- Transaction costs
- The charges you pay when you trade, such as brokerage, exchange fees and taxes.
- Upfront margin
- Margin that must be paid before a trade is placed.