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Basic Stock Market Terms Every Beginner Should Know

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Basic Stock Market Terms Every Beginner Should Know

Posted by NIFM Academy
17-Dec-25 02:38PM

When beginners enter the stock market, the biggest challenge is not placing trades but understanding the everyday language used in the market. Terms like IPO, delivery, brokerage, circuit filter, or market depth are commonly used on trading platforms and in market news, yet many beginners do not fully understand what they mean. Without clarity on these basic stock market terms, it becomes difficult to follow market movements or make informed decisions. This blog explains the basic stock market terms every beginner must know, using simple language to help new learners build confidence before starting trading or investing in the Indian stock market.

1. Listed Company

A listed company is a company whose shares are available for trading on NSE or BSE.

   Beginners often trade stocks without realizing whether a company is listed or not.

2. Unlisted Shares

Unlisted shares belong to companies that are not yet listed on stock exchanges.

  These shares cannot be traded like normal stocks and involve higher risk.

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3. IPO (Initial Public Offering)

An IPO is when a company offers its shares to the public for the first time.

   IPOs attract beginners, but not every IPO is profitable.

4. Lot Size

A lot size is the minimum number of shares required to place certain trades (especially in derivatives).

   Beginners often confuse lot size with quantity.

5. Trading Session

A trading session is the time during which stock market trading happens.

  • Pre-market

  • Normal market

  • Post-market

   Knowing sessions helps avoid wrong order placement.

6. Market Depth

Market depth shows:

  • Buyers (bid prices)

  • Sellers (ask prices)

   It helps beginners understand demand and supply.

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7. Circuit Filter

A circuit filter restricts how much a stock can move in a day.

   It protects beginners from sudden price manipulation.


8. Settlement Day

The settlement day is when shares and money are officially exchanged.

   Beginners often expect instant settlement, which is incorrect.


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9. Delivery vs Intraday

  • Delivery ? shares go to Demat account

  • Intraday ? buy & sell same day

   Beginners often mix these unintentionally.

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 Complete stock Market Guide (Beginners Must Watch )


10. Brokerage

Brokerage is the fee charged by brokers for executing trades.

   Ignoring brokerage affects profit calculations.


11. Charges & Taxes

Apart from brokerage, traders pay:

  • STT

  • Exchange charges

  • GST

  • Stamp duty

   Many beginners realize this only after trading.


12. Holding Period

The holding period is how long you keep a stock.

   This defines whether you are trading or investing.


13. Portfolio

A portfolio is a collection of all your investments.

 Beginners should track their portfolio, not just individual stocks.

Learn How the Indian Market Works ?

14. Watchlist

A watchlist is a list of stocks you monitor regularly.

  It helps beginners avoid impulsive trades.

15. Market News

Market news includes:

  • Company results

  • Economic data

  • Global market updates

  News impacts price movement directly.

Why These Terms Matter for Beginners

These basic terms help beginners:

  • Understand daily trading language

  • Avoid confusion on trading platforms

  • Make informed decisions

  • Read market news confidently

They form the real foundation before moving to advanced concepts.


How Does the Stock Market Work in India? Step-by-Step


Conclusion 

Understanding these basic but practical stock market terms helps beginners participate in the Indian stock market with clarity and confidence. These terms are commonly used in trading platforms, news, and daily market discussions.

Before placing real trades, beginners should ensure they understand this basic market language to avoid unnecessary mistakes and confusion


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