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Finance GlossaryOn-Balance Volume (OBV)
On-Balance Volume (OBV)
Definition of On-Balance Volume (OBV)
On-Balance Volume (OBV) is a volume-based indicator that tracks market pressure by linking volume with price movement. Volume is accumulated when prices close higher and reduced when prices close lower, helping traders judge the strength behind a trend.
Related Terms
Sector Rotation
Sector rotation is an investment strategy where investors keep shifting their funds between sectors based on economic cycles or market trends. For example, defensive sectors tend to perform better during slowdowns. Cyclical sectors perform impressively during phases of growth. With strategic sector rotation, investors can manage risk while capitalizing on opportunities in different market conditions.
Cash Conversion Cycle
A Cash Conversion Cycle (CCC) tells you how many days it will take to convert a company’s inventory or resources into cash. The formula for Cash Conversion Cycle is:
Cash Conversion Cycle = (DIO + DSO) – DPO
Cash Conversion Cycle = (DIO + DSO) – DPO
- DIO: Days Inventory Outstanding is the average number of days it takes for a company to turn inventory into cash through sales
- DSO: Days Sales Outstanding is the average number of days it takes for a company to collect its receivables
- DPO: Days Payable Outstanding is the average number of days it takes fo a company to fulfil its obligations or payables
Realized Gain
Realized Gain is the actual profit earned from selling an asset, such as a stock or mutual fund, at a price higher than its purchase cost, after accounting for fees. It differs from unrealized (paper) gains, as it triggers tax liability only upon sale. Investors track realized gains for performance evaluation and tax planning, ensuring compliance with capital gains rules.
Fibonacci Retracement
A Fibonacci Retracement is a predictive technical indicator that is used to determine possible direction or trend reversal of a stock or index’s price with horizontal lines for potential support as well as resistance levels.
Fibonacci retracement in action
The logic behind tuning to a Fibonacci Retracement is the assumption that prices will reverse direction towards a previous price-level, especially after a new trend is in motion.
Fibonacci retracement in action
The logic behind tuning to a Fibonacci Retracement is the assumption that prices will reverse direction towards a previous price-level, especially after a new trend is in motion.
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
SEBI (Securities and Exchange Board of India)
The Securities and Exchange Board of India is the authority that regulates the securities market in India. It protects the interests of investors and ensures that trading practices are fair. The body also promotes transparency across different exchanges and intermediaries. SEBI regulates brokers and prevents the market from being manipulated. Thus, the authority plays a crucial role in regulating Indian financial markets and maintaining transparency.
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