Skip to content
Log inSign up
Level 3 of 13 · Market terminology

Understanding Stock Prices and Market Terminology

By the end you will: understand stock prices and market terms.

Open any stock page and you see a wall of numbers: open, high, low, previous close, 52-week high, market cap, volume… This level explains every one of them, with a worked calculation and why it matters. Keep a stock page (like Reliance on MojoStox) open in another tab and find each number as you read.

Start with 3.1: What is the current market price (LTP)?
0 / 23 topics0%

Prices you see every day

Open the Reliance stock page in a new tab and find each of these in the "Price information" card.

  1. 3.1What is the current market price (LTP)?The current market price, also called LTP (Last Traded Price), is the price at which the most recent trade happened.
  2. 3.2What is the previous closing price?The previous close is the official closing price of the last trading day.
  3. 3.3What is an opening price?The opening price is the first price of the day, set in the 9:00–9:15 a.m. pre-open session.
  4. 3.4What are the day’s highest and lowest prices?The day high is the highest price traded today; the day low is the lowest.
  5. 3.5What are the 52-week high and 52-week low?The 52-week high is the highest price in the last one year; the 52-week low is the lowest.

Size, activity and movement

  1. 3.6What is market capitalization?Market capitalization (market cap) is the total market value of all a company’s shares.
  2. 3.7What is free-float market capitalization?Free-float market cap counts only the shares that are freely available to trade, leaving out shares held by promoters, the government and…
  3. 3.8What is trading volume?Volume is the number of shares traded in a period, usually a day.
  4. 3.9What is liquidity?Liquidity is how easily you can buy or sell a stock quickly without moving its price much.
  5. 3.10What is volatility?Volatility measures how much and how fast a price moves up and down.
  6. 3.11What is a circuit limit?A circuit limit (price band) is the maximum a stock is allowed to rise or fall in one day. Trading pauses or stops beyond it.
  7. 3.12What is an upper circuit?A stock hits its upper circuit when it reaches its maximum allowed rise for the day.
  8. 3.13What is a lower circuit?A stock hits its lower circuit when it reaches its maximum allowed fall for the day.
  9. 3.14What is a gap-up opening?A gap-up happens when a stock opens well above its previous close, leaving a "gap" on the chart where no trading happened.
  10. 3.15What is a gap-down opening?A gap-down happens when a stock opens well below its previous close.

Corporate actions

Corporate actions are decisions by a company that change its shares: splits, bonuses, rights issues and buybacks.

  1. 3.16What is a stock split?A stock split divides each share into more shares with a lower face value. The total value of your holding doesn’t change.
  2. 3.17What is a bonus share?Bonus shares are free extra shares given to existing shareholders from the company’s reserves, in a fixed ratio.
  3. 3.18What is a rights issue?A rights issue lets existing shareholders buy new shares directly from the company, usually at a discount to the market price, in…
  4. 3.19What is a buyback?A buyback is when a company buys its own shares from shareholders, usually at a price above the market price.
  5. 3.20What is face value?Face value (FV) or par value is the original nominal value of a share written in the company’s records, often ₹1, ₹2, ₹5 or ₹10.
  6. 3.21What is book value?Book value is the company’s net worth in its accounts: total assets minus total liabilities. Book value per share divides that by the…
  7. 3.22What is a lot size?A lot size is the fixed minimum number of units you must trade in certain products, such as futures and options and IPO applications.
  8. 3.23What is settlement (T+1)?Settlement is when the buyer actually receives shares and the seller actually receives money. India uses T+1: trade day plus one working…