Important  Terms   Of   Stock Market
 

India Vix

Volatility  Index is a measure of markets expectation of volatility over the near term. Volatility is often described as the rate and magnitude of changes in prices and in finance often refered to as risk. Volatility Index is a  measure of the amount by which an underlying  Index is expected to fluctuate, in the near term based on the order book of the underlying index options.. India Vix is a volatility index based  on the nifty index option prices. Vix is a measure of Chicago Board Options Exchange

 

Initial Public Offer

Initial public offer is when an unlisted  company makes fresh issue of securities for the first time to the public. Initial public  offering involves a number of agencies. The rules and regulations, the changing scenarios of the capital market necessitated the company to  seek for the support of any agencies to make the public  issue a success viz the lead manager to issue, registrar to the issue, underwriters, bankers, advertising, agencies, financial, institutions and government/ statutory agencies.

Demutualization Of Stock Exchanges

Demutualization is dissociation of ownership from the control and regulation of stock market operations. The stock exchanges are self- regulatory organisation owned and regulated by the member broker themselves. Traditionally the control and ownership rested with the same member broker. NSE  however was set up with a pure demutualized governance structure, having ownership, management and trading with three different sets of people. Currently, all  the stock exchanges in India have  a demutualized set up.

Dematerialization

 

Dematerialization  of shares are  came into existence because  of the following reasons

1.      Long time for settlement

2.      The physical movement  of paper based securities was a very  lengthy process.

To obviate these problems the Depository Act of 1996 was passed  to provide for the establishment of  depositories  in securities with the objective of ensuring free transferability of securities with speed and accuracy. There are two depositories in India NSDL (NSDL) and Central Depositories Services LTD). They have been set up to provide  electronic transfer of securities. Dematerialized settlement has eliminated the bad deliveries  and associated problems. To prevent physical certificates from sneaking into circulation, it has been mandatory for all newly issued  securities  to be  compulsorily  traded in dematerialized form. Now the public listed companies making IPO of any  security for 10 crore  or more have to make the IPO only  in dematerialized form.