Glossary

An approach to valuing companies that relies on comparing a company’s stock price to its income from operations, cash flow from operations, or earnings per share. The higher the multiple, the more richly valued the company is. Underwriters use valuation multiples of an IPO’s peers, or comparables, to determine the appropriate level at which the IPO should be priced.

This refers to the investment style that attempts to pick those stocks that are traded below the intrinsic value and, hence, considered as undervalued. Fundamentalists often make recommendations of value investment.

This refers to the investment style that attempts to pick those stocks that are traded below the intrinsic value and hence considered as the undervalued.  

This is the payment made to the broker in order to restore or maintain initial margin on adverse positions resulting from adverse price movements in futures/options transactions.

The rate of change in option premium for a 1% change in the volatility of the underlying.

An investment company that invests money in new ventures and other risky projects in anticipation of higher returns

This refers to the rate by which the price of a security fluctuates in changing market conditions. Higher the volatility, the more risky will be the stock.

A statistical measurement of the variability of a share's price, often expressed by the standard deviation.

A recognized option strategy which involves the simultaneous purchase (sale) of calls against the sale (purchase) of the underlying or the simultaneous purchase (sale) of puts against the purchase (sale) of the underlying in one single transaction.

This refers to the total number of shares that are traded in a particular counter in a definite period of time, generally one day. This is important information used in explaining and interpreting price fluctuations. More volumes indicate the greater liquidity in the counter.