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Finance GlossaryRally
Rally
Definition of Rally
A Rally describes a sustained upward movement in the price of a stock, index, or market over a short to medium term, often driven by positive news, strong earnings, or improved investor sentiment. It typically follows a period of decline or consolidation, reflecting renewed buying interest and momentum. Traders monitor rallies for entry points, but they can reverse if underlying fundamentals weaken or profit-taking occurs.
Related Terms
S&P 500
The S&P 500 is a stock market index in the US and tracks 500 of the largest publicly listed companies in the country. The S&P 500 represents a wide range of industries. Often, it is used as a benchmark for the performance of the global equity market. Many investors consider the index as a picture of how the overall US economy is performing. It also reflects the overall market sentiment.
Government Bonds
Government bonds are debt instruments that allow the central banks to raise capital to finance operations. The types of government bonds are:
- Treasury Bills
- Fixed Rate Bonds
- Floating Rate Bonds
- State Development Loans
- Sovereign Gold Bonds
- Zero Coupon Bonds
Every government bond has a credit rating that’s based on the financial health of the country. The government is the apex institution of any country, which is why their credit rating is the high.
In India, you’ll notice government bonds with the credit rating SOV. This is known as a sovereign rating.
In India, you’ll notice government bonds with the credit rating SOV. This is known as a sovereign rating.
Scalping
Scalping is a short-term trading strategy. Here, traders can make strong profits as they engage in transactions as the stock prices frequently move. Usually, these positions are held for seconds or minutes. The liquidity of the stock and tight spreads determine the success of the strategy. In scalping, each trade generates a small profit. However, with consistency and discipline, traders can benefit from scalping over time.
European Option
A European Option allows a trader to exercise the contract only on the day of expiry. For example, let’s say an options trader bought a European Call Option that expires on 01-01-2023.
The options trader can only exercise the call option, that is, buy the underlying assets on the day of expiry which is 01-01-2023. In India, traders can only engage in European options.
The options trader can only exercise the call option, that is, buy the underlying assets on the day of expiry which is 01-01-2023. In India, traders can only engage in European options.
Equity Shares
Equity shares is a term used to describe stock of a company that’s issued via an Initial Public Offer (IPO), already issued and traded on the stock market, or freshly available through a Follow on Public Offer (FPO).
For a company, the goal of issuing equity shares is to raise money while investors who buy these equity shares get perks like voting rights, dividends, and even a share of the assets in case the company is liquidated.
For a company, the goal of issuing equity shares is to raise money while investors who buy these equity shares get perks like voting rights, dividends, and even a share of the assets in case the company is liquidated.
Firm Allotment
Firm Allotment is the process of allocating shares during an IPO to investors who are not considered to be retail public investors. The firm allotment is done as per SEBI guidelines, which dictate that a portion of the IPO can be allocated to the likes of Mutual Funds, regular employees (permanent), and others.
The complete list of firm allotments for investors by allocation is as follows.
The complete list of firm allotments for investors by allocation is as follows.
- Foreign Institutional Investors (FIIs): 30%
- Development Financial Institutions (DFIs): 20%
- Mutual Funds: 20%
- Regular Employees (permanent): 10%
- Employee of Promoting Company: 10%
- Lead Bankers: 5%
Any leftover percentage can be allocated to promoters.
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