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Finance GlossaryBombay Stock Exchange
Bombay Stock Exchange
Definition of Bombay Stock Exchange
Established in 1875, Bombay Stock Exchange or simply BSE is a place where stockbrokers and traders can buy and sell securities like stocks, bonds, ETFs, and more. 5000+ securities are listed on BSE, which is the oldest stock exchange in India and Asia.
Related Terms
Minority Interest
Minority Interest refers to the portion of a subsidiary’s equity that is owned by shareholders other than the parent company. It represents the non-controlling stake in the subsidiary’s profits and net assets. It is shown separately in consolidated financial statements to reflect ownership accurately.
Backtesting
Backtesting means simulating trading strategies and models using historical data to understand whether they are effective.
In many ways, backtesting is considered to be an important part of crafting trading strategies that work.
If backtesting leads to positive results, then the trading strategy or model may be viable.
In many ways, backtesting is considered to be an important part of crafting trading strategies that work.
If backtesting leads to positive results, then the trading strategy or model may be viable.
Out of the Money (OTM)
An option contract is said to be out of the money (OTM) if it would not be profitable to exercise the contract immediately. Options with no intrinsic value; call options with a strike price higher than the current market price, or put options with a strike price lower than the market price. OTM options are less expensive than ITM options. Indian F&O traders often purchase OTM options for leveraged bets, though they expire worthless if the market doesn't move favourably.
Foreign Portfolio Investment
A Foreign Portfolio Investment includes stocks, bonds, ETFs, derivatives, and other financial instruments from another country. Generally, FPIs do not give an investor the right to ownership or a controlling stake in any organization.
Instead, FPIs act as a passive income vehicle. That’s why FPIs are different to Foreign Direct Investment (FDI) in which an ownership stake is acquired with the intention of controlling and influencing business decisions.
Follow On Public Offer
A Follow On Public Offer or FPO allows a publicly traded company to issue more stock to public investors. FPOs are similar to IPOs because FPOs allow companies to raise additional capital through the public market.
For an FPO to be possible, a company must have already done an IPO. FPO shares are typically issued at a discount by a company whose track record is already clear because they are publicly traded.
For an FPO to be possible, a company must have already done an IPO. FPO shares are typically issued at a discount by a company whose track record is already clear because they are publicly traded.
Capture Ratio
The capture ratio is used to measure the performance of an asset during market highs and lows by comparing it to a benchmark.
The result is expressed as a percentage and helps investors understand whether the asset manager was able to steer through volatility the right way. There are two types of capture ratios investors can turn to:
The result is expressed as a percentage and helps investors understand whether the asset manager was able to steer through volatility the right way. There are two types of capture ratios investors can turn to:
- Up market capture ratio
-
Down market capture ratio
Here’s how to calculate the up market capture ratio:
Returns during market highs / Benchmark returns * 100
Here’s how to calculate the down market capture ratio:
Returns during market lows / Benchmark returns * 100
Returns during market highs / Benchmark returns * 100
Here’s how to calculate the down market capture ratio:
Returns during market lows / Benchmark returns * 100
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