So you’re keen to play the stock market now that everyone seems to be making money off it?

Before you put your cash in get to know some of the basics. Here is some elementary trading terminology that will have you talking smart in minutes!

Sensex: The index that represents the direction of the companies that are traded on the Bombay Stock Exchange. The word itself comes from ’sensitive index’. The Sensex captures the increase or decrease in prices of stocks of the 30 companies that it comprises. A number represents this movement.

Nifty: The Sensex’s counterpart on the National Stock Exchnage, NSE. The Nifty comprises of 50 companies and is therefore more broad-based than the Sensex.

Bull: An investor who purchases shares in the expectation that the market price of that company’s share will increase.

Bear: A bull’s counterpart is the bear. Bears are happy in a falling market.

Squaring off: The process in which traders buy or sell shares and later reverse their trade to complete a transaction.

Bonus shares: Free shares that a listed company gives its shareholders.

Dividend: A method of rewarding a company’s shareholders. A dividend is generally issued as a percentage of the face value of a share. Face value is the nominal price of a company’s share.

Cover: The act of completing a transaction in order to remove any obligations.

Liquid Market: A market with many bid and ask offers. The market is characterized by high liquidity, low spreads, and low volatility.

Short Selling: The selling of a security that the seller does not own, or any sale that is completed by the delivery of a security borrowed by the seller. Short sellers assume that they will be able to buy the stock at a lower amount than the price at which they sold short.

Need more? Checkout Investopedia.