Académique Documents
Professionnel Documents
Culture Documents
1.
ARBITRAGE Different prices may exist in different markets for the same commodity at the same time. A business operator takes advantage of difference of prices and buys from the market where price is low and sells in a market where price is high. By this difference of prices he earns profit. His profit mainly depends on two major factors. a) b) Updated knowledge of prices prevailing in the market. Quick transport from the place of buying to the place of selling. Arbitrage is quite common in stock Exchange market where dealers deal in securities and earn profit by the existing difference of prices. 2. ARRIVAL Fresh stock that is brought to the market in a given period of time is called arrival. This does not include the old stock or stock on balance in hand. Arrivals show increase in the commodities and help determine business trend in the market as well as the price in future. Therefore, large arrivals indicate rise in prices. Since it is an important feature of market, it is generally quoted in market reports. 3. BEAR A stock exchange term derived from traditional bear hunting, where the trapper would make sure of his market for the SKINS before setting out to shoot the bears. A bear is a speculator who sells at present the commodity/securities hoping that prices will fall in future and he may earn profit by the difference of prices. He sells commodities/securities that he has yet to buy. He sells at present when the price is high and buys in future when the price falls. This difference of prices makes his profit. When his speculations are proved wrong, he suffers loss because he has already sold securities and buys in future at higher rates. 4. BULL The term is related to bull activity. His lifting the prey is related to rise in prices that a bull speculates. Bull is a dealer on stock exchange, buys securities at present on existing prices. He speculates rise in prices in future. He retains securities till the time when there is rise in prices. He sells in future at higher rates and earns profit by the difference of prices. When his speculations are proved wrong, unlike bear he has a chance of manipulating prices in his favour and launches Bull Campaign. So that he may not suffer loss. Note: Both Bull and Bear help setting buying or selling trend in the market. 5. BEARISH When there is a general expectation of fall of prices in future, Every Bear invests money in making selling contracts. They set a selling trend in the market and due to competition among bears the price level falls and the market becomes BEARISH The bearish market reduces the profit margin and business operators face difficulty in making high profits. 6. BULLISH
When there is a general expectation of rise in prices in future, every bull invests money in buying securities/commodities. This way, they set a buying trend in the market and face competition with other bulls. This causes general rise in prices in the market, and the market is called Bullish. The bullish market increases the profit margins and sellers earn huge profits. The most notorious of all bull markets was the SOUTH SEA BUBBLE, which burst in 1720 and set the growth of a credit economy in the U.K. 7. BEAR COVERING When bear's speculations are proved wrong and the expected prices do not fall at the time of buying, the bear is compelled to buy goods to fulfil his promises and obligations. The purchase made by the bear under such conditions is called as Bear Covering. This happens due to rise in demand and subsequently the price level goes up. 8. BULL CAMPAIGN When bulls' speculations are proved wrong and the expected prices do not rise rather they fall, a number of bulls organize themselves to manipulate prices in their favour. They create demand by spreading RUMOURS in the market in order to establish buying trend. The campaign launched by the bulls is called
BULL CAMPAIGN.
9.
RIGGING When bulls' expectations are proved wrong and the expected prices do not rise rather they fall, he tries to manipulate prices in their favour by bogus transactions. This activity is called as RIGGING. He does so with the help of his workers, principals and agents. 10. SQUARE DEAL The sale by the bulls and the purchase by the bears to settle their respective accounts is called as
SQUARE DEAL.
This is generally done to finalise the transactions and close the necessary accounts. 11. HEDGING A trader buying forward or selling forward in the commodity exchanges may hedge to protect himself from losses arising from variations in pricing. He may also pass on some of his forward sales to the shoulders of others. He does so to save his skin and the activity is known as HEDGING. 12. STAG Stag is a person who buys heavily on a new issue of stocks or shares and expects that price will rise very quickly; and he will earn profit. He normally holds shares only for a short time. 13. DEMURRAGE The daily charge made for detention of a ship beyond the agreed number of LAY DAYS, is called Demurrage. The term is also used for the daily charge made for detention of railway rolling stock. 14. DUMPING In the modern age of industrialization and economic development, every country is anxious to capture foreign market for her own product. This may be done, when the first country wishes to sell at a low profit or even at a loss, so that it may get hold of the market of the second country. The first country may set monopolistic control and start earning profit. This activity is known as DUMPING.
15.
EX-FACTORY
VU __________________________________________________________________________________
Ex-factory sale is done outside the factory and the delivery of goods takes place at seller's warehouse or godown. The price is generally determined by the following formula. COST + Direct Expenses + Owner's Profit + Dealer's Commission = Whole sale Price.
16. EX-SHIP If the delivery is taken by the buyer at the dock after paying all cost for their conveyance home, the sale is called Ex-SHIP. Cost + Owner's Profit + Freight + Insurance + Taxes = PRICE The seller's responsibility ceases as soon as the goods leave the dock. If barges (boats) are necessary the buyer must provide them. 17. LAME DUCK OF THE MARKET 'Lame duck' is applied to companies which need to be saved from complete ruin and this is done with the help of public funds. 'Lame Ducks' are often hidden under the cloak of nationalized industries, to which normal standard of efficiency cannot be applied. 18. GLUT An excessive supply of any commodity is known as Glut. Excess of goods in the market makes the process of selling difficult and reduces the profit margin. If the situation persists for a longer period, the market becomes stagnant. 19. PEGGLING When the rate is artificially maintained at certain level mainly by manipulation of prices. It is called
peggling operation.
Peggling is generally done by the bulls to maintain price level and save themselves from loss. 20. CLOGGING It is a situation when the market is saturated with surplus funds which obstruct the normal operation of business. This situation results in increased circulation of money within the country, and causes inflation. 21. STRADING When the market operators take advantage of abnormal differences in the rates of different bills in the same market and carry on ARBITRAGE operation by selling one kind of bills to buy another kind of bills, the operation is called STRADING. 22. BLUE CHIPS Ordinary shares which are of the highest standing considered to be so safe that there is no risk of losing either capital or income, are called Blue Chips. They are usually the shares of particularly well-known and sound companies. 23. STREET PRICE When the stock exchange is closed, the selling of securities is done outside the exchange at a privately quoted price. This is known as street price. The seller's main objective is to dispose of his goods whose quality is not guaranteed. Some times he needs a license for his business.
24. MARKET PRICE The market price is the price which is actually paid in the current market dealings. It also indicates the price of every unit of commodity. (i.e., per unit price). The price of a commodity is determined by two factors i.e., 1, demand 2, supply. Therefore, when the price increases, supply also increases. Whereas price has inverse relationship with demand. Market Price Supply Market Price . 25. MARKET VALUE Market value is the price of a commodity which a dealer expects to get in the market. Market value is based on two factors: 1. Depreciation 2. Appreciation. DEPRECIATION: It indicates fall in existing value. APPRECIATION: It indicates rise in existing value. 26. OFF TAKE It indicates the total quantity of goods purchased on an Exchange during a particular period. Off take indicates the Bartar Transactions. i.e., It includes both ready and future deliveries. 27. TURNOVER Means the total amount of transactions done in a day in a particular period is called TURNOVER. The term includes both the sales in terms of amount or quantity of goods. Turnover = Total goods sold. Turnover = Total amount in price. 28. HAGGLING It is a practice of wrangling over price in which offers and counter - offers are made at the times of some business bargaining. Haggling is an important characteristic of the retail market. Cost of goods + Transportation + Profit = Retail Price. (After Haggling) 29. SET BACK If the market suddenly experiences the effect of low pricing due to sudden fall in volume of transactions, it is termed as SET BACK. It generally happens after boom in a market and causes economic hardships.
This causes upset in the business and sellers enter in to a difficult phase. Here seller tries to dispose of goods at low prices. 30. FLAT It indicates the very low prices of commodities in a market. It is known as boom in reverse. This shows slump in the market, when sellers are forced to stop selling goods, and the market is closed flat.
31. BOOM It is a period of heavy business and rising prices. It is the point in trade cycle where an explosive out pouring of economic activity happens and upward movement is complete.