Nifty 50
Sensex
US Tech 100
Dow Jones
FTSE
Dax
CAC
Nikkei 225
Hang Seng
SSE Composite
TAIEX
KOSPI
Gift Nifty
Strategy Indices
Broad Market Indices
Sectoral Indices
Thematic Indices
Home
Finance GlossaryFixed Income Securities
Fixed Income Securities
Definition of Fixed Income Securities
Fixed Income Securities are issued in exchange for a loan and offer returns to investors in the form of a fixed interest rate. That’s why they are referred to as “fixed income” securities. The common types of fixed income securities are: Firm Allotment is the process of allocating shares during an IPO to investors who are not considered to be retail public investors. The firm allotment is done as per SEBI guidelines, which dictate that a portion of the IPO can be allocated to the likes of Mutual Funds, regular employees (permanent), and others.
- Certificates of Deposit
- Corporate Bonds
- Municipal Bonds
- Treasury Bonds
- Treasury Bills
Such securities fall under the category of debt instruments, which means they do not give investors equity shares or ownership in the company but only a promise of returning the principal with interest on maturity.
Often referred to as the coupon rate, the interest on a fixed income security is determined by the creditworthiness of the issuing company or entity as well as the latest interest rate set by the government.
Fixed income securities also confer seniority of claim to investors, which means that the investors who’ve helped finance the loan will receive their money first in the event a company is liquidated.
Often referred to as the coupon rate, the interest on a fixed income security is determined by the creditworthiness of the issuing company or entity as well as the latest interest rate set by the government.
Fixed income securities also confer seniority of claim to investors, which means that the investors who’ve helped finance the loan will receive their money first in the event a company is liquidated.
Related Terms
Buy and Hold
Buy and hold is a long term investment strategy that is designed to help investors ride out market volatility by buying and holding fundamentally solid businesses that have the potential to grow over decades.
Benchmark
A benchmark is a standard used by investors to compare the performance of a stock, commodity, or other securities.
Stock indices like Nifty 50, Sensex, Nifty Bank, and others are often used as benchmarks to evaluate the performance of one or more stocks.
The onset of a bear market is generally in tandem with poor economic conditions.
Benchmarks are not just used for evaluating markets or securities, they can also be used to assess the performance of an investor or wealth manager. Here are some outcomes if the returns are:
Stock indices like Nifty 50, Sensex, Nifty Bank, and others are often used as benchmarks to evaluate the performance of one or more stocks.
The onset of a bear market is generally in tandem with poor economic conditions.
Benchmarks are not just used for evaluating markets or securities, they can also be used to assess the performance of an investor or wealth manager. Here are some outcomes if the returns are:
- Greater than benchmark: the asset is doing considerably well (great)
- Same as benchmark: the asset is moving with the market (okay)
- Less than benchmark: the asset is performing poorly (bad)
Advance/Decline Line
An Advance/Decline Line can help you plot the daily difference between the number of advancing and declining stocks.
As a result, the Advance/Decline Line is a technical indicator used to gauge market sentiment, price trends, and trend reversals.
Here’s how the Advance/Decline Line is calculated:
As a result, the Advance/Decline Line is a technical indicator used to gauge market sentiment, price trends, and trend reversals.
Here’s how the Advance/Decline Line is calculated:
- Calculate the number of stocks that finished in the red.
- Calculate the number of stocks that finished in the green.
- Subtract #1 from #2 to find out the net movement aka Net Advance.
- Repeat #1, #2, and #3 the next day and add the values for Net Advance.
- Add both the previous day’s and the present day’s Net Advance. Repeat for future calculations.
Capital Gain Or Loss
A capital gain is a profit that an investor or trader earns by selling an asset while a capital loss is the money a trader or investor loses after selling an asset. Capital gains are taxed while capital losses can be used to offset gains.
Placing
Placing, or Private Placement, is a process of raising capital in which a company sells its securities (stocks or bonds) to a selected group of investors (such as banks, mutual funds, insurance companies) or high net worth individuals instead of selling them to the general public through a public offering (like an IPO). In India, companies frequently use private placement to raise funds in a short period of time from specific investors. This is a faster and less expensive process than a public issue.
Differential Voting Rights
Differential Voting Rights or DVRs are special types of shares that carry more or less voting rights, depending on the issuing company. For example, a DVR share that carries less than usual voting rights may generate relatively high dividends.
A publicly traded company that wants to issue DVR shares must go through a postal ballot. There are other caveats as well. But broadly speaking, a company must have a healthy finanical track record if they want to issue DVR shares.
A publicly traded company that wants to issue DVR shares must go through a postal ballot. There are other caveats as well. But broadly speaking, a company must have a healthy finanical track record if they want to issue DVR shares.
Invest & Trade with a Trading
Platform That's #MadeForTrade
Open your Dhan Account in minutes!
