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 GlossaryDonchian Channels
Donchian Channels
Definition of Donchian Channels
A Donchian Channel is the area between upper (highest price) and lower (lowest price) bands formed around the median as a result of calculating the moving average of a security’s price over a period of time. Visually, the Donchian Channel will have three lines.
Related Terms
Equity Market
The Equity Market is a place where shares are traded, money is raised, and stock is offered to investors. That's why it is divided into two categories:
- Primary Market: An equity market where shares are offered to investors for the first time through IPOs while fundraising also happens through private placements.
- Secondary Market: An equity market where shares, bonds, futures, options, more are traded
The primary market is typically over the counter but may be regulated in the case of exchange traded IPOs. The secondary market is often well-regulated as most securities listed are exchange traded.
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.
Market Depth
The number of buy and sell orders available at different price levels for a stock denotes its Market Depth. It helps traders understand supply and demand in the market. Strong market depth means there are many buyers and sellers, making it easier to enter or exit trades without causing large price changes.
Risk-Free Rate of Return
The Risk-Free Rate of Return is the return an investor can expect with almost no risk. Usually, such returns come from government securities like Treasury bills. These assets come with minimal risk of defaulting. The risk-free rate of return serves as a standard based on which other investments are evaluated. Any additional return expected is the compensation for taking additional risk.
Grey Market
The grey market is an unofficial yet legal marketplace where unlisted or soon-to-be-listed securities are traded.
By definition, the grey market is an over-the-counter market because of the lack of regulation and structure.
Underwriters of an IPO gauge market demand for a share by analyzing the grey market premium for it before going public.
By definition, the grey market is an over-the-counter market because of the lack of regulation and structure.
Underwriters of an IPO gauge market demand for a share by analyzing the grey market premium for it before going public.
Preferred Stock
Preferred stock is a class of ownership in a corporation that has a higher claim on assets and earnings than common stock. Preferred stockholders receive dividends, and they must be paid out prior to any dividends being distributed to common stockholders. Unlike common stock, preferred stock does not come with voting rights. It is a hybrid security, with elements of both equity (ownership) and debt (fixed payments of dividends).
Invest & Trade with a Trading
Platform That's #MadeForTrade
Open your Dhan Account in minutes!
