Entry Load - Exit Load

Entry Load: Mutual Funds charge investors an entry load of up to 2.25% to compensate for distribution costs. It is charged at the time an investor purchases the units of a scheme.

Exit Load: The commission or charge paid when an investor exits from a mutual fund. They are basically imposed to discourage withdrawals.

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Yo-Yo Market

Very volatile market is known as Yo-Yo Market. It will have no distinguishing features of either an up or down market, taking on characteristics of both. Security prices in a yo-yo market will swing very high to low over a given period of time, making it difficult for buy and hold investors to profit.

Yo-yo markets can, however, be profitable environments for astute traders who are able to recognize buy and sell points and make trades before the market reverses. The name comes from the movements of a yo-yo, where security prices continually go up and down; a yo-yo market moves like its toy namesake.

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Obligation

In the financial world, obligation refers to an outstanding debt that a party must still repay - and if they do not pay, they default on the debt. Obligation is a facility which supports selling of shares on the next trading day after they are purchased in delivery, by allowing you to sell the shares that you have purchased in delivery even before those shares are credited to your Demat account.
Suppose, you have purchased a specific share on Monday, it will take two trading days for those shares to be credited to your demat account i.e. you will receive those shares on Wednesday evening. This is known as T+2 settlement of shares. During these two days when the settlement is still under process these shares will remain in obligation. Thus giving you the liberty to sell those shares even before the settlement cycle is completed.

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QUICK RATIO

Quick ratio gives you an idea how easily the company can pay its current obligations – that is those bills due in the next 12 months.
The Quick Ratio is cash, marketable securities and accounts receivable divided by current liabilities (those due in the next 12 months). However, not all Current Assets are included in this ratio – excluded are doubtful accounts receivables and inventory. Basically, you are saying if all income stopped tomorrow and the company sold off its readily convertible assets, could it meet its current obligations?
A Quick Ratio of 1.00 means the company has just enough current assets to cover current obligations. Something higher than 1.00 indicates there are more current assets than current obligations.
It is important to compare companies with others in the same sector because different industries operate with ratios that may vary from one sector to another. Some industries such as utilities, for example carry much more debt than other industries and should only be compared to other utilities.
So, quick ratio is :

• Current assets – doubtful debtors and inventory / Current liabilities.

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Current Liabilities

Current Liabilities are bills that will come due in the next 12 months. These include the company’s normal operating expenses such as salaries, utilities, and so on. Long-term debt, such as mortgages would not be included, however that portion of payments due in the next 12 months would be included.

Current liabilities are usually presented in the following order:

1. the principal portion of notes payable that will become due within one year
2. accounts payable
3. the remaining current liabilities such as payroll taxes payable, income taxes payable, interest payable and other accrued expenses

The parties who are owed the current liabilities are referred to as creditors. If the creditors have a lien on company assets, they are known as secured creditors. The creditors without a lien are referred to as unsecured creditors.

The amount of current liabilities is used to determine a company's working capital (current assets minus current liabilities) and the company's current ratio.

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Support & Resistence

Support is the price level at which demand is thought to be strong enough to prevent the price from declining further. The logic is that, when the price declines, there will be more demand for the particular share. By the time the price reaches a particular level, it is believed that demand will overcome supply and prevent the price from falling below support.
Resistance is just the opposite of ‘support’. A Resistance is the price level at which selling is thought to be strong enough to prevent the price from rising further. The logic behind the theory is that , as the price advances , sellers become more inclined to sell and buyers become less inclined to buy. By the time the price reaches a particular level it is believed that supply will overcome demand and prevent the price from rising above resistance.

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Bonus Share

Bonus shares are additional shares given to the shareholders without any additional cost, based upon the number of shares that a shareholder owns. These are company's accumulated earnings which are not given out in the form of dividends, but are converted into free shares. The basic principle behind bonus shares is that the total number of shares increases with a constant ratio of number of shares held to the number of shares outstanding. For instance, if Investor A holds 200 shares of a company and a company declares 4:1 bonus, that is for every one share, he gets 4 shares for free. That is total 800 shares for free and his total holding will increase to 1000 shares.

Companies issue bonus shares to encourage retail participation and increase their equity base. When price per share of a company is high, it becomes difficult for new investors to buy shares of that particular company. Increase in the number of shares reduces the price per share. But the overall capital remains the same even if bonus shares are declared.

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Chart Analysis

• Chart analysis is the technique of using patterns formed on a chart to get an idea about the price movement of a share.
• There are two types of chart patterns: reversal and continuation.
• A continuation pattern suggests that the prior trend will continue upon completion of the pattern.
• A reversal pattern suggests that the prior trend will reverse upon completion of the pattern.

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What is 52-Week High/Low?

Prices of commodities, securities and stocks fluctuate frequently, recording highest and lowest figures at different points of time in the market. A figure recorded as the highest/lowest price of the security, bond or stock over the period of past 52 weeks is generally referred to as its 52-week high/ low.

It is an important parameter for investors (as they compare the current trading price of the stocks and bonds to the highest/lowest prices they have reached in the past 52 weeks) in making investment decisions. It also plays an important role in determination of the predicted future prices of the stock.

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