Learn the 50 most used share market terms in Nepal with this comprehensive guide. This guide includes definitions, explanations, and examples of each term, making it a valuable resource for investors of all levels.
The share market is a complex and ever-changing environment, and it can be difficult to keep up with all the latest terms and jargon.
This guide provides a comprehensive overview of the 50 most used share market terms in Nepal, with definitions and explanations.
Whether you’re a beginner or an experienced investor, this guide will help you understand the basics of the share market and the terminology that is used.
Stock Exchange
A stock exchange is a regulated marketplace where buyers and sellers can trade stocks and other securities.
Another term for the stock market, it refers to the place where shares of publicly listed companies are bought and sold.
Stock
A stock represents ownership in a company and is a unit of ownership that is traded in the stock market.
Equity
Equity refers to the ownership interest or the value of ownership that shareholders hold in a company.
IPO (Initial Public Offering)
An IPO is the first time a company offers its shares to the public for sale on the stock exchange.
Secondary Market
The secondary market is where already issued securities are bought and sold by investors, rather than the company itself.
Primary Market
The primary market is where new securities, like IPOs, are issued and sold to initial investors.
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Broker
A broker is a licensed professional or firm that facilitates buying and selling of securities on behalf of investors.
Trading Floor
Traditionally, the area on a stock exchange where traders conduct transactions. With modern electronic trading, this is now mostly virtual.
Stock Price
The current price at which a stock is trading in the market.
Bull Market
A market condition characterized by rising prices and investor optimism.
Bear Market
A market condition characterized by falling prices and investor pessimism.
Blue Chip Stocks
Large, well-established, and financially stable companies with a history of reliable performance.
Dividend
A portion of a company’s profits distributed to its shareholders.
Market Capitalization
The total value of a company’s outstanding shares in the market, calculated by multiplying the stock price by the number of shares.
Listed Company
A company whose shares are officially traded on the stock exchange.
Non-Listed Company
A company whose shares are not publicly traded on the stock exchange.
Market Order
An order to buy or sell a security at the best available price.
Limit Order
An order to buy or sell a security at a specified price or better.
Circuit Breaker
A mechanism that halts trading temporarily in case of significant market fluctuations to prevent extreme volatility.
Bid Price
The highest price a buyer is willing to pay for a security.
Ask Price
The lowest price a seller is willing to accept for security.
Volatility
The measure of the price fluctuations of a security or the overall market.
Sector
A group of companies operating in similar industries.
Index
A statistical measure of the performance of a group of stocks representing a particular market or sector.
Book Closure
The period during which a company closes its register of shareholders for updating before issuing dividends or bonus shares.
Additional shares given to existing shareholders at no cost, usually from the company’s retained earnings.
Additional shares offered to existing shareholders at a discounted price in proportion to their current holdings.
Market Maker
A brokerage firm or institution that provides liquidity by buying and selling securities at quoted prices.
Securities Board of Nepal (SEBON)
SEBON, The regulatory body responsible for regulating the securities market in Nepal.
Nepal Stock Exchange (NEPSE)
NEPSE, The only stock exchange in Nepal where securities are traded.
Stock Symbol
A unique alphabetic code used to identify a company’s stock in the stock market.
Annual General Meeting (AGM)
A mandatory yearly meeting of a company’s shareholders to discuss important matters.
Dematerialization
The process of converting physical share certificates into electronic form for ease of trading.
Margin Trading
Buying stocks with borrowed funds from a broker.
Scripless Trading
Trading of securities in electronic form without the need for physical share certificates.
Securities Transaction Tax (STT)
A tax levied on the value of securities traded.
T+2 Settlement System
The standard settlement period where trades must be settled within two business days.
Face Value
The nominal value of a security stated on the share certificate.
FPO (Follow-on Public Offering)
Additional shares offered to the public by a listed company after the IPO.
Market Order Matching System (MOMS)
The electronic system used for matching buy and sell orders on the stock exchange.
Market Depth
The measure of the supply and demand for a security at different prices.
Authorized Capital
The maximum value of shares a company is legally allowed to issue.
Paid-up Capital
The portion of authorized capital that the company has issued and received payment for.
Equity Ratio
A financial ratio that compares equity to total assets, representing the proportion of assets funded by shareholders.
Price-to-Earnings Ratio (P/E Ratio)
A valuation ratio that compares the current stock price to earnings per share.
A company’s profit divided by the number of outstanding shares.
Dividend Yield
A financial ratio that represents the annual dividend per share as a percentage of the stock’s current market price.
Stop-Loss Order
An order placed by an investor to sell a security if the price falls to a specified level, limiting potential losses.
Short Selling
The sale of borrowed securities in the hope of buying them back at a lower price, profiting from the price decline.
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