Margin Account: A brokerage account in which the broker lends the customer cash to purchase securities. The loan in the account is collateralized by the securities and cash. If the value of the stock drops sufficiently, the account holder will be required to deposit more cash or sell a portion of the stock. Normally to [...]

What are Commodities? Commodities are things that people buy and sell. They are finished products as well as basic raw materials. Any tangible thing that is bought and sold can be considered a commodity. Securities, the shares of ownership of a company (common stock) and the debt obligations of companies, municipalities, and the federal government [...]

Portfolio is grouping of financial assets such as stocks, bonds and cash equivalents, as well as their mutual, exchange-traded and closed-fund counterparts. Portfolios are held directly by investors and/or managed by financial professionals. Forethought suggests that investors should construct an investment portfolio in accordance with risk tolerance and investing objectives. Think of an investment portfolio [...]

Investors often confuse ETFs with conventional mutual funds. However, the fact is that they are different on several counts. Perhaps, the only similarity between ETFs and conventional mutual funds is that they both provide investors an opportunity to invest in an assortment of stocks/instruments through a single avenue. First, an investor in a mutual fund [...]

Investment recommendations are expressed as ‘buy’, ‘hold’ or ‘sell’ and are based on an assessment of the fundamental factors, the current pricing of the security and the likely appreciation on price over a specific time horizon. Thus , investment recommendations carry out a detailed evaluation of the ‘market factors’ (liquidity, demand supply, valuation etc.) as [...]

Grading of Initial Public Offerings (IPOs) is a service aimed at facilitating assessment of equity issues offered to the public. The Grade assigned to any individual IPO is a symbolic representation of rating agency’s assessment of “fundamentals” of the issuer concerned relative to other listed securities. IPO Grades are assigned on a five-point point scale, where [...]

First and foremost, corrections are not unidirectional ie they don’t just happen on the downside. There are upside corrections and downside corrections. So a correction purely defined is a correction of the trend. And a trend can be up and down. Masses generally have a propensity to direction; they consider upsides as certainty and downside [...]

Bid A bid is the demand for a security that can be entered by the syndicate/sub-syndicate members in the system. The two main components of a bid are the price and the quantity. Bidder The person who has placed a bid in the Book Building process. Book Running Lead Manager A Lead Merchant Banker who [...]

Corporate bonds are debt securities issued by private and public corporations. Companies issue corporate bonds to raise money for a variety of purposes, such as building a new plant, purchasing equipment, or growing the business. When one buys a corporate bond, one lends money to the “issuer,” the company that issued the bond. In exchange, [...]

In essence, ETFs trade like stocks and therefore offer a degree of flexibility unavailable with traditional mutual funds. Specifically, investors can trade ETFs throughout the trading day as in stocks. In comparison, in a traditional mutual fund, investors can purchase units only at the fund’s NAV, which is published at the end of each trading [...]