TERMS RELATED TO CAPITAL MARKET

CORPORATE ACTION

SPOT TRADING :- spot trading is any transaction where delivery takes place immediately due to technical constraints.

               It involves visual inspection and mainly deals in wholesale markets.

STOCK SPLIT :- A stock split or stock divide increases the number of shares in a public company. 

• The price is adjusted such that the before and after market capitalization of the company remain same.
• Ratio for splitting is 2 for 1, 3 for 1, 3 for 2 usually.
• It is mainly use for increase the liquidity of a stock.

               For ex :- there are more buyers and sellers for 10 shares at $10 than 1 share at $100.

BONUS SHARE :- A bouns share is a free share of stock given to current shareholders in a company , based upon the number of shares that the shareholder already owns.

• It increases the total number of shares issued and owned, it does not change the value of the company.
• Although number of issued shares increases, the ratio of number of shares held by each shareholder remains constant.

• Company issue Bonus share to reduce or capitalize its reserves.       

  HUNG UP:- It is a situation in which one or more of an investor securities have fallen well below the levels at which they are purchased.

BLOW OUT :- When the launch of share and also the selling of all the shares on the same day occurs this condition is known as "blow - out".