Market Terminologies

Bear in a Market:

 A Bear is a specialized trader in some highly organized market, as the Stock Exchange. He is an investor who is engaged in speculative business. He sells his bills and securities at present when the price is high and buys in future when the price is low. In case his speculation proves correct, he makes his profit through the difference in the selling and buying prices. A Bear is taken as a gloomy businessman as he hopes for a decrease in the price level of stocks in future.

The term "Bearish":

 The term "Bearish" denotes the downward trend in prices. A market is called Bearish when there is a general trend of depression in the prices and volume of business transactions. Bearish sentiment in a market brings the prices further down, as every Bear operator wants to off-load his stocks. This trend of depression sometimes suits the Bears who sell their stocks now and buy in future when prices fall further. However, the bearish trend in a market is not taken as a healthy sign.

The term "Bullish":

 Bullish is opposed to Bearish. A market is termed as Bullish when it shows a general tendency of rise in the prices of stocks. Bullish trend in the market results in an increase in the demand for stocks which causes further rise in prices because every Bull operator wants to buy stocks further rise in prices because every Bull operator wants to buy stocks to sell them at higher rates in future. Bullish trend denotes a period of rise in the prices and volume of business which is favorable for the Bulls.

Bull Campaign:

 Bull Campaign is a tactical campaign which is undertaken by the Bull operators to make profit.When Bull operators find that their speculations and calculations have proved wrong and the prices of stocks are not increasing, they try to influence the market by spreading rumors to ensure for themselves a profit. They do so in different ways, mostly through their agents. This act of the Bulls to influence the market to tilt it to their favor through rumors is called a Bull Campaign.

Blue Chips:

 Blue Chips are the stocks that sell at high prices because of public confidence in their long record of steady earnings. We see that all stocks do not always sell at good prices and in good volumes. There are some specific stocks which, because of their good record, constitute major chunk of the volume transacted. It is these stocks which are the Blue Chips of the market.

What is Bonus?

 Bonus is an extra-dividend paid by a company to its employees or stock-holders from the profit that it earns, when a company goes into profit, it distributes certain percentage of the profit among its regular employees. This is in addition to their regular salaries. Similarly, a company distributes a ratio of its profit among its share-holders in proportion to the stocks held by them. However, some companies instead of giving cash dividend, offer additional shares to its stock-holders. The shares so offered, are called Bonus Shares or Right shares.

What is Boom?

 Boom means to cause to grow or flourish. As a market term it is used to indicate a period of heavy business and rising prices. Fluctuations in the prices and volume of business are essential aspect of business activity. When a market shows growth and expansion both, in the prices and volume of business, it is termed as the Boom period of the market.

Buoyancy of the Market:

The term 'Buoyancy' literally means the tendency or capacity to remain afloat. It also refers to a state of cheerfulness. As a market term it is used to show the strength of a market. It implies a better state of business with an increasing tendency of prices. A market is termed as 'Buoyant' when it shows a potential for heavy business transactions.

Call Deposit Receipt:

 Call Deposit Receipt, often referred to as CDR, is a deposit receipt issued by a bank in favour of a beneficiary on the request of a customer. It is usually issued to submit the bid or render security or any other security in favour of a company. There are three parties involved in a Call Deposit Receipt i.e., the Applicant, The Beneficiary and the Issuing Bank. Applicant is the person on whose behalf CDR is issued. Issuing Bank is the bank that issues the CDR on the Receipt of funds from the applicant. Beneficiary is the person or the company in whose favour the CDR is issued.

            Applicant first makes the payment to bank, and then bank issues the CDR. One CDR is issued, its payment cannot be supported by the applicant. It can only be got canceled by the applicant on the presentation of original CDR to the issuing bank. It cannot be encashed and can only be deposited in the beneficiary's account. The benefit of this call deposit is that it never becomes stale and can be encashed after any time period.

What is a Cheque?

 A cheque is issued by a drawer in favour of a beneficiary. There are three parties to a cheque i.e. The Drawer, the Drawee and the Beneficiary. It is drawn on the bank by the drawer, and the beneficiary/payee's name is mentioned on the cheque. Cheque can be issued both as a crossed ( Payee's Account only ) or as a cash cheque. Payment of the crossed cheque can only be received by way of transferring the funds into the beneficiary's account. Payment against the cash cheque can be received by presenting the cheque on the counter of the branch of the bank on whom the cheque is drawn on. Cheque can also be issued of some future data which is called post dated cheque. A Cheque becomes stale after six months from its issuance date.

Clogging:

 Clogging literally means hampering or obstructing. As a market term, it refers to a situation in which normal business operation is obstructed because of the surplus capital in the market. Steady flow of capital is an essential requirement of a market but, sometimes funds pour into more than they are required. This surplus availability of the capital eventually disturbs normal functioning of the market and results in the clogging of the business activity.

Counters of Issue:

 Counter of issue are the new stocks that are introduced in a market. Stock Exchange Markets are specialized Markets where business transactions, pertaining to bills and securities, are carried out. These shares, bills and securities are issued by Joint Stock Companies and are made available for trading on the Ready Board of Stock Exchange Markets. The share and securities so introduced in the markets for transactions are called Counters Of Issue.

Crashing Of Market:

 The term 'Crashing Of Market' is used specifically for Stock Exchange Markets. When there is a sudden collapse of a Market, and normal business activities cannot be carried on because of a sharp decline in the prices and volume of business, it is termed as Crashing Of Market. It may be due to any reason - economic, political or policy features - but if it results in a complete breakdown of the business activity in a market, that market is termed as crashed.

What is Demurrage?

Demurrage is the over detention of a cargo carrier at a berth. After goods reach a port, they are required to be cleared within a stipulated time. Sometimes the goods are not cleared within a specified period of time because of the one or the other reason. The detention of a ship or other cargo conveyance for loading or unloading, beyond the scheduled time of departure is termed as Demmurage. The penalty paid for such detention is also called Demurrage.

What is Depression?

Depression is the state of drastic decline in prices and business activity. In its wider sense it refers to a period of unemployment and stagnation of the national economy of a country. As a market term, it points out to a prolonged period of fall of prices and business activity. The state of depression is taken as a serious loss to investors because there are neither buyers nor sellers, and the investors have to remain stuck to their investments and stocks.

What are Dips?

Dips are the brief plunges in the price index and in the volume of business in a specialized market, like the stock exchange market. We know that a market is subjected to fluctuations. It does not always function at one and the same level. Sometimes it shows an upward movement and sometimes a downward trend. During the functioning of a market as and when it shows brief and short-lived declines in terms of the prices of stocks and the volume of business, we name them as Dips.

What is Dumping?

 The literal sense of dumping is to place goods on a market, especially in a foreign country, in large quantities and at a low price.

When a country tries to capture the market of a foreign country, it starts dumping its goods in big quantities and at low prices, sometimes even below the cost of production. Particularly, when there is a severe competition between countries in the export of goods, a country dumps its goods to promote its sales abroad and to acquire a monopoly in foreign markets. Japan resorted to dumping of its production in foreign markets in the Post-war Period. China, Taiwan and Hong Kong are doing the same at present.

What is Easy?

Used as a market term 'Easy' refers to a state in a market which is favorable for buyers. An easy market indicates low prices of stocks. In an easy market, the graph of supply is higher than the graph of demand. With increase in supply, prices of stocks start decreasing, making the market easy and favorable for investors.

What is Ex-Factory?

 In business correspondence such terms as 'Ex-Factory' and 'Ex-Warehouse' are very commonly used. These denote the terms and conditions on which business transactions are made. These terms mean that the delivery of goods is to be made at the cost of the seller at the seller's factory or the seller's warehouse.

            In case of the mention of the 'Ex-Factory delivery', if a buyer wants the goods to be delivered to him at some other place or premises, it is the buyer who will have to bear the extra cost of transportation. etc.

What is an Ex-ship?

 In case of import and export of goods by sea, prices of goods are offered as 'Ex-ship' prices. This is the price that is charged by the seller to deliver the goods at the port. All such business transactions in which goods are delivered to the buyers at the port are termed as 'Ex-Ship sales.'

Explain the market term "Flat":

 A market is said to be flat when it indicates very low level of prices. A downward movement of prices sometimes touches the bottom line, with no sign of an immediate upward charge. In such a situation the traders lose their interest in the market, in particular, the sellers who think that the prices of the stocks are not favorable to them. This situation as and when it prevails in a market leaves the market in a flat state.

Forecast:

Forecast means to foreshadow or to make estimation in advance about the feature behavior of a market. Traders and investors, intending to have business transactions, always look for tips to finalize their sales and purchases. Some specialized experts do this from them. Depending upon certain factors, these experts analyze, estimate and calculate the expected future trend of prices and mood of the market . This estimation and calculation in advance is termed as forecast.