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Finance GlossaryGo Public
Go Public
Definition of Go Public
To “go public” or going public means to get listed on the stock market by launching an Initial Public Offering (IPO). The act of going public involves receiving approval from existing stakeholders to launch an IPO, the price of which is decided by two methods:
- Book Building
- Fixed price
Once the price of the IPO is decided, the shares are offered to the public on the primary market. Not everyone who applies to an IPO may get shares - the system works on the basis of allotment. After the shares are issued, the company is said to move from the “go public” stage to the publicly traded company stage.
Related Terms
Alpha
An Alpha indicates the measure by which a stock or portfolio has managed to outperform a benchmark like an index of shares.
A positive Alpha means that the security or portfolio is beating the market while a negative Alpha means that it is lagging.
Alpha can also be used to measure the competence of a fund manager and their strategies.
A positive Alpha means that the security or portfolio is beating the market while a negative Alpha means that it is lagging.
Alpha can also be used to measure the competence of a fund manager and their strategies.
Unsystematic Risk
Unsystematic risk is the risk specific to a company or industry and not the overall market. It includes factors such as management decisions, labour strikes, or product failures. For example, a lawsuit affecting only one pharmaceutical company represents unsystematic risk and can be reduced through diversification.
American Option
An American Option allows the contract holder to exercise the right any time before or on the expiry date. American style options contracts are not available in India.
Candlesticks
Candlesticks are technical charts used in trading to understand price movements. A candlestick chart will show the following information:
There are three components to a call option:
- High (for the period)
- Low (for the period)
- Open price
-
Closing price
The main body of the candle will be green if the closing price is higher than the opening price and red if the closing price is lower than the opening price.
Long green candles mean more investors and traders want to buy a stock. Long red candles mean more investors and traders want to exit a stock.
Long green candles mean more investors and traders want to buy a stock. Long red candles mean more investors and traders want to exit a stock.
Put-Call Ratio
The Put-Call Ratio (PCR) is a popular sentiment indicator used by contrarian investors. It is determined by dividing the total volume of traded put options by the total volume of traded call options over a particular period. A high PCR (more puts than calls) is often seen as an overly pessimistic market, and it is a bullish signal (a sign the market is due for a rebound). On the flip side, a low PCR could be a sign of excessive optimism and a possible bearish reversal.
Volatility
Volatility refers to the degree of price fluctuations in a security or market over a period of time. A highly volatile stock may move sharply up or down within short durations, such as technology stocks during earnings announcements, while low volatility indicates more stable and predictable price movements.
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