Trading Lesson-2

What are “Small Cap” Stocks?

The stocks with lower market capitalization we call it as “Small Cap”. Commonly the stocks with the market capitalization of Around 250 crores will come under small cap. We can select and buy these small cap stocks because there are chances of Profit with these stocks.

The Meaning of “Top Holdings”

With the wealth of individuals, companies or mutual funds, there will be several different stocks, and the stocks with higher The value we call it as top holdings. Based on the quality of the company and individuals the investor will show their interest To invest in top holdings

Explains Of “Promoter Holdings”3poles-of-trading

In case of some stocks even their promoters will hold only a few stocks, and you can avoid investing in these type of stocks. Before investing in a company that the promoter holds less than 50% of the stocks we have to think a lot, at the same time we Cannot say it’s a bad company if the promoter holds less than 50% of the stocks. For example, Infosys and few other companies Are in a good state. Everything depends on the company’s top management.

What is Risk Adjusted Return?


To calculate how much risk you have to take to get a return on an investment is called Risk Adjusted Return. Risk Adjusted Return will be calculated based on the rating. The Risk Adjusted Return calculation can be categorized into five different types, namely alpha, beta, R-squared, standard deviation and sharp ratio.

What is an “Overnight Delivery Risk”?

The risks due to the transactions that will be held between the persons at different time zones refers To overnight delivery risk.

Example of “Overnight Delivery Risk”:

During the transaction that is going on between the person who resides in Mumbai and in New York, The The time differs and there will be a risk to know whether one has provided acknowledgement to another and This is called overnight delivery risk.

What is a Secular Market?

The market will be either in bullish trend or in a bearish trend due to some international or national Happenings.

Example of “Secular Market”

For instance, if the data or news from either national or abroad shows good sign such as (Finance Department announcement, GDP, Inflation, Exports and Imports) then the market will be always in bullish Trend. In the same way, if the data shows negative sign, then the market will be in a bearish trend. This Is called the secular market.

What is Sideways Market?

The stocks or index, which is trading in a way that neither is going up or down we call it as sideways Market.

Example of “Sideways Market”

The stocks or index, which is trading neither in a bullish or bearish trend and trades in a non volatile Position. There will not be more profit or loss when you trade in the sideways market. Some known Stocks will trade at a low volume. Either traders or brokers will not like to trade in sideways Market.

“Closing Statement”

Commonly the trade details (Brokerage commission, Tax transaction fees) while doing the share trading Commodity trading and currency trading will be sent to their clients by share broking company the next Day. This is called closing statement. The statement will be sent through email or courier and the share broking company will deduct the cost for this.

Brokerage Fee:

In share market based on the transaction of the stocks the trading commission will be deducted by The broking company. This is called brokerage fee. This may differ between the broking companies. In this the cost will be charged bit low for day trading and will be a little bit high for delivery Trading.


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