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Finance GlossaryPre-Market Trading
Pre-Market Trading
Definition of Pre-Market Trading
Pre-Market Trading is a trading session (9:00-9:08 AM for Equity) that takes place on an exchange before the start of normal market hours. India has a short pre-open session on both the NSE and BSE. This session is mainly for finding the price for the day and includes a restricted number of trade types. The pre-market session is important in absorbing news and events that have occurred overnight, which will decide the opening price for the different stocks, giving market participants an idea of how the market is likely to open.
Related Terms
Net Asset Value (NAV)
Net Asset Value (NAV) indicates the value of one unit of an investment fund at a given point in time. It reflects the fund’s total assets after expenses, spread across all outstanding units, and helps investors track how the fund’s value changes from day to day.
Promoter Holding
Promoter holding refers to the percentage of total shares held by the promoters of a company. Promoters are a group of individuals who are responsible for the foundation or management of the company. High promoter holding can signal strong management conviction in the future of the company, but can also lead to concerns about corporate governance and a lack of sufficient free float of shares for the public market.
Equity Capital Markets
Equity capital markets (ECMs) are a place where companies raise money by offering equity shares to financial firms, institutional investors, and retail investors.
Fund raising of this kind is often done through private placements or Initial Public Offerings (IPOs) in the primary market, which is a part of the ECM. The biggest IPOs in India are all part of the ECM.
The equity capital market is also a place where shares, futures, options, and other financial instruments are traded. This part of the ECM is known as the secondary market. The stock market is a popular example of an ECM.
Fund raising of this kind is often done through private placements or Initial Public Offerings (IPOs) in the primary market, which is a part of the ECM. The biggest IPOs in India are all part of the ECM.
The equity capital market is also a place where shares, futures, options, and other financial instruments are traded. This part of the ECM is known as the secondary market. The stock market is a popular example of an ECM.
Delivery Notice
A delivery notice is produced by the seller of a commodity futures contract. It is proof of confirmation of the sellers intention to physically deliver the underlying commodity to the buyer at the pre-agreed date.
Government Bonds
Government bonds are debt instruments that allow the central banks to raise capital to finance operations. The types of government bonds are:
- Treasury Bills
- Fixed Rate Bonds
- Floating Rate Bonds
- State Development Loans
- Sovereign Gold Bonds
- Zero Coupon Bonds
Every government bond has a credit rating that’s based on the financial health of the country. The government is the apex institution of any country, which is why their credit rating is the high.
In India, you’ll notice government bonds with the credit rating SOV. This is known as a sovereign rating.
In India, you’ll notice government bonds with the credit rating SOV. This is known as a sovereign rating.
Put Option
A put option is a contract that gives the buyer the right, but not the obligation, to sell a specified amount of an underlying security (like a stock) at a predetermined price (the strike price) on or before a specified date (the expiration date). Buyers of put options typically expect the price of the underlying asset to decline. Put options are used for speculation or for hedging a long position in the underlying asset.
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