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 GlossaryCapture Ratio
Capture Ratio
Definition of 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
Related Terms
Dividend Payout Ratio
The Dividend Payout Ratio refers to dividends paid to shareholders as a percentage of the net income or Earnings Per Share (EPS) of a company. The formula to calculate dividend payout ratio is:
DPR = Dividend / Net income
or
DPR = Dividend / Earnings Per Share
A higher dividend payout ratio means that a company is redistributing a chunk of its profits to shareholders, which generally implies that the company is well-established.
DPR = Dividend / Net income
or
DPR = Dividend / Earnings Per Share
A higher dividend payout ratio means that a company is redistributing a chunk of its profits to shareholders, which generally implies that the company is well-established.
Discount Brokers
Discount brokers are platforms that offer essential stock trading and investment services rather than a full stack of services that may or may not be useful for everyone.
Discount brokers are discount brokers because their service is priced competitively, meaning the cost of trading and investing may be significantly low than a fullservice broker.
Discount brokers are discount brokers because their service is priced competitively, meaning the cost of trading and investing may be significantly low than a fullservice broker.
Foreign Direct Investment
Foreign Direct Investment (FDI) is the act of acquiring a majority stake in a company located in a different country with the intention of assisting, growing, and managing the business.
FDIs and FPIs may seem similar but there is a major difference - lasting interest. When a company or investor obtains at least 10% control of foreign company with the intention of actively managing the business, it’s known as lasting interest.
A company that establishes a subsidiary in another country can also be classified as FDI. FDIs can also be made through mergers and acquisitions as well as collaborations with foreign companies
FDIs and FPIs may seem similar but there is a major difference - lasting interest. When a company or investor obtains at least 10% control of foreign company with the intention of actively managing the business, it’s known as lasting interest.
A company that establishes a subsidiary in another country can also be classified as FDI. FDIs can also be made through mergers and acquisitions as well as collaborations with foreign companies
Bounce Trading
Bounce trading refers to buying a position in security when its price falls to a particular support level with the anticipation that it will “bounce” back to a certain price level. Technical analysis is the bedrock of bounce trading but various patterns and strategies can be used to achieve the desired goal.
Overbought
An overbought term refers to a security whose price has advanced sharply, and the broader market sentiment suggests that a price correction or reversal is likely to occur in the near future. It does not necessarily mean the price will go down, but that the upward momentum is unsustainable. Technical indicators such as the Relative Strength Index (RSI) or Stochastic Oscillator are widely used by traders for identifying overbought situations. An RSI above 70 is considered an overbought indicator.
After Hours Trading
After hours trading means buying and selling securities after the end of regular market hours. In India, the stock market is open for regular trade from 9.15 AM to 3.30 PM.
After hours trading is allowed from 3.40 PM to 4 PM. Around the world, stocks are known to suffer from a lack of liquidity during after hours trading.
After hours trading is allowed from 3.40 PM to 4 PM. Around the world, stocks are known to suffer from a lack of liquidity during after hours trading.
Invest & Trade with a Trading
Platform That's #MadeForTrade
Open your Dhan Account in minutes!
