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Finance GlossaryCash and Cash Equivalents
Cash and Cash Equivalents
Definition of Cash and Cash Equivalents
Cash and cash equivalents are short-term assets or holdings which fall under the current assets of a business. Cash and cash equivalents have very high liquidity. When you take the term literally, you have two components:
- Cash: money like cash holdings in a bank account, petty cash, and others
- Cash equivalents: assets or investments like T-bills, commercial paper, and others that have a short maturity which can easily be converted into cash
Related Terms
High Dividend Yield Stocks
High Dividend Yield Stocks are shares of companies that generate above average dividends on top of regular market-based returns. These shares are known to be valued highly because they generate passive income as well as capital gains.
Zero-Coupon Bond
A zero-coupon bond is a debt instrument that does not pay periodic interest but is issued at a deep discount to its face value. Investors earn returns when the bond matures at full value, such as purchasing a ₹1,000 bond for ₹700 and receiving ₹1,000 at maturity.
Forex Trading
Forex trading means buying and selling currency pairs through exchange-traded derivatives or on the OTC market. A currency can only be bought and sold in exchange for another currency, which is why forex trading is always done in pairs.
Trading forex derivatives is carried out on stock exchanges authorized by regulatory bodies (SEBI & RBI), in tandem with approved brokers who allow users to engage with the forex futures trading and options trading markets.
Trading forex derivatives is carried out on stock exchanges authorized by regulatory bodies (SEBI & RBI), in tandem with approved brokers who allow users to engage with the forex futures trading and options trading markets.
Iceberg Order
An Iceberg Order is used to slice and execute large orders into multiple “legs”. Large orders have the potential to drastically affect stock prices and subsequently investor behaviour.
That’s why institutional investors or traders with a relatively large buy or sell order place an Iceberg Order, thus masking their total transaction value and effectively going under the radar.
Brokers and trading platforms offer Iceberg Orders as a feature, which is activated after a certain quantity of scrips or contracts are selected, typically above 100.
That’s why institutional investors or traders with a relatively large buy or sell order place an Iceberg Order, thus masking their total transaction value and effectively going under the radar.
Brokers and trading platforms offer Iceberg Orders as a feature, which is activated after a certain quantity of scrips or contracts are selected, typically above 100.
Triple Top
A triple top is a bearish chart pattern where a stock or index reaches the same resistance level three times but fails to break above it. This repeated failure signals weakening buying momentum and a potential trend reversal from uptrend to downtrend. For example, if a stock rises to ₹500 three times over several months and falls each time, it may form a triple top, indicating a possible decline ahead.
Stochastic Oscillator
The Stochastic oscillator is a momentum indicator used in technical analysis. Investors use this indicator to identify conditions where a stock may be overbought or oversold. It compares the closing price of a stock to its price range over a certain period. If the value is above 80, it indicates overbought conditions. If it is below 20, the conditions are considered oversold. The Stochastic oscillator helps investors identify potential reversals.
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