Basic Terms

Earnings per Share: The amount of profit each share of a company is entitled to.

Going Public: Slang for when a company is planning an IPO.

IPO: Short for Initial Public Offering. An IPO is when a company sells stock in itself for the first time.

Market Cap: The amount of money you would have to pay if you bought ever share of stock in a company. [To find out what it is, multiply the number of shares by the price per share.] Short for Market Capitalization.

Share: A share represents an investor's ownership in a "share" of the profits, losses, and assets of a company. It is created when a business carves itself into pieces and sells them to investors in exchange for cash.

Ticker Symbol: A short group of letters that represents a particular stock [e.g., "Coca Cola" is referred to as "KO"].

Underwriter: The financial institution or investment bank that is doing all of the paperwork and orchestrating a company's IPO.

Stock Market : Its a market which facilitates the buying and selling the shares of companies by connecting buyers and sellers . It can be considered as a mediator between buyer and seller. So anyone who wants to buy or sell shares can do it from stock market.

Sensex and Nifty : These are indexes of BSE (Bombay Stock Exchange) and NSE(National Stock Exchange). Sensex and Nifty, both are indicators of how prices of major stocks are moving at any point of time. Sensex comprises of 30 Shares and Nifty comprises of 50 shares. They are calculated by a method called "Free Flow Market Capitalization" . When sensex moves up it indicates that on an average more shares have increased there value and some have declined and vice-verse. It moves up or down depending on the combined valuations of the shares they comprise of.

Market Capitalization : This means how much worth all company shares collectively are. Simply putting: Market Capitalization = Total number of shares available X Current Price . Its the total money required to buy all the shares of the company available to public.