Glossary

A return over several years restated as the steady yearly rate that would have produced it.

A three-year return of 33% is about 10% a year, annualised.

A hundredth of a percentage point. A rate that goes from 6.50% to 6.25% has fallen 25 basis points.

Used for interest rates and for small shares, such as margin borrowing against the market's value.

A lakh is 1,00,000 and a crore is 100 lakh, or 1,00,00,000. A lakh crore is a trillion.

We use them for every rupee amount, and US$ billion for dollar amounts.

A chart axis on which equal distances are equal percentage changes, so a rise from 100 to 200 looks the same as one from 1,000 to 2,000.

Use it to compare growth rates over long spans: equal slopes mean equal returns.

The plain difference between two percentages. Inflation going from 4% to 6% is a rise of 2 percentage points, or 50%.

We write "points" after the first use on a page.

Where a reading sits in its own history. The 80th percentile means it has been lower 80% of the time.

Every reading on this site is placed against its own past, never against another market's.

A price change plus the dividends paid along the way, as if they were reinvested.

Our index returns are total returns, which is what an investor in an index fund would have earned before costs.

The middle half of a reading's history, from its 25th to its 75th percentile. Half of all past readings fall inside it.

Outside the usual range means unusual for that reading, which is not the same as good or bad.

The price against the average of ten years of earnings, each year's restated at current prices.

Averaging a decade of profits smooths out booms and busts. It is a slow gauge, of use for the decade ahead and of no use for the next quarter. Valuation.

Profits that include a company's subsidiaries. Standalone earnings leave them out.

NSE switched its published P/Es from standalone to consolidated earnings in March 2021; we rescale older figures so the history is on one basis.

Earnings divided by price, the P/E turned upside down. A P/E of 20 is an earnings yield of 5%.

It lets shares be set against the yield on a government bond.

The total value of listed companies against a year of the economy's output.

It rises with new listings as well as with prices, so compare it with its own recent past.

The price against the accounting value of what the companies own, net of what they owe.

Steadier than P/E because book value moves less than profits.

What investors pay for each rupee of a company's or an index's profits over the last year.

A high P/E means investors expect profits to grow, or are simply paying up. Valuation.

The earnings yield of shares minus the yield on the 10-year government bond.

In India it is usually negative, because bond yields are high. The less negative, the better shares look against bonds.

The average closing price of the last 200 sessions, recomputed each day.

A stock or index above its 200-day average is, roughly, in a long-term uptrend.

How many stocks are taking part in a move, as against how far the index moved.

An index can rise on a handful of large stocks; breadth counts how many are rising with it. Breadth.

A burst of buying across most stocks within about two weeks, after a stretch when most were falling. Defined by Martin Zweig in 1986.

We test what followed each one on NSE.

The fall from the last peak to today, or to the lowest point before a new peak.

The worst drawdown is the deepest fall an investor would have sat through.

An index that gives every stock the same weight, instead of weighting by size.

When it beats the ordinary index, the average stock is doing better than the giants.

The return over the twelve months to a month ago. The latest month is skipped because one-month moves tend to partly reverse.

Ranks which indices or stocks have been leading.

A trend rule: hold an index while its month-end level is above the average of its last ten month-ends, and move to cash when it closes a month below.

We say "holding since April 2026" or "in cash since September 2026", never "in" or "out". Trend and momentum.

How much returns swing, measured as their standard deviation and stated as a yearly rate.

It comes in spells: calm and stormy stretches tend to last.

A bulk deal is one client's trades in a stock adding up to more than 0.5% of its shares in a session. A block deal is a single trade of at least ₹10 crore in a separate window.

Both are disclosed by name.

Indian mutual funds, insurers, banks and pension funds.

Their buying has grown with SIP and insurance money, and often absorbs foreign selling.

Foreign funds and institutions that buy Indian shares and bonds without taking control of the companies.

Their net buying is reported daily by NSDL.

The shares that actually trade: everything except promoters' holdings.

Shares of the free float show who owns the part of the market that changes hands.

An IPO's first-day closing price against its issue price.

Large listing gains draw more investors and more issuers, which is how IPO cycles build.

Mainboard issues list on NSE's or BSE's main market. SME issues are small companies listed on a separate platform with lighter rules.

SME issues are thinly traded, so we read their medians and do not test them.

Shares a promoter has borrowed against. If the price falls far enough, the lender can sell them.

A high pledged share is a source of forced selling in a fall.

The founders, parent company or government that control a listed company.

Promoter stakes rarely trade, so they are left out of the free float.

A fixed amount invested in a mutual fund every month.

SIP inflows are steady by design, so the stoppage ratio says more about investors' mood.

SIPs stopped or matured in a month for every 100 new ones registered.

Below 100, the number of SIPs is still growing.

A fund that promises to hold more shares when they are cheap and fewer when they are dear, hedging the rest.

We estimate how much equity they hold, net of hedges, from their daily NAVs.

The value of what a fund holds, per unit, struck once a day.

Mutual funds are bought and sold at NAV; ETFs trade on the exchange at a market price that can differ from it.

How far an ETF's market price sits above (premium) or below (discount) its NAV.

Buying at a premium and selling at par loses the difference, however well the fund tracks. ETFs.

A fund's total return minus its index's over a year. Negative means the fund lagged, mostly through costs.

The best single measure of what an index fund costs you.

How much the gap between a fund and its index wobbles from week to week, as a yearly rate.

A fund can lag steadily and still have a low tracking error.

A future's price over the index it tracks.

It shrinks towards zero as each contract nears expiry.

Broker lending to clients to buy shares, with the shares held as security.

The margin book is the total outstanding; it can be forced to sell in a sharp fall. Leverage.

The value of the shares or index an option or future controls, as against the money paid for it.

Notional values are large; premium paid is the money that actually changes hands.

Futures or option contracts still open at the close of a day.

It shows how many positions are being carried, not which way the market will go.

Open put options for every open call option. Puts pay off in a fall, calls in a rise.

Above 1, more puts are open than calls. It describes positioning.

The share of futures positions carried into the next month's contract at expiry, instead of closed.

High rollover means traders kept their positions open.

The rate banks charge each other for overnight loans.

Below the repo rate, banks have spare cash; above it, cash is short.

The cash reserve ratio is the share of deposits banks must keep as cash with the RBI. The statutory liquidity ratio is the share they must hold in government securities and similar assets.

A lower CRR frees cash for banks to lend.

Currency in circulation plus bank deposits.

It grows as banks lend and take deposits.

An interest rate minus inflation.

Above zero, money is tight; below zero, inflation erodes debt.

The rupee against a basket of 40 currencies, weighted by trade and adjusted for the gap between India's inflation and theirs. The NEER is the same without the inflation adjustment.

Above 100, the rupee is dearer in real terms than in the base year.

The rate at which the RBI lends overnight to banks, set by its Monetary Policy Committee.

Every other rupee interest rate takes its cue from it, with a lag. The RBI.

The RBI keeps overnight rates between a floor, the standing deposit facility (SDF), and a ceiling, the marginal standing facility (MSF). Before April 2022 the floor was the reverse repo rate.

Where the call rate sits in the corridor shows how much cash banks have.

The average interest rate banks charge on loans, weighted by amount. The fresh-loan WALR covers new loans only.

It is where a change in the repo rate reaches borrowers.

A growth rate that looks large or small because the same period a year earlier was unusually low or high.

The jump in growth a year after the 2020 lockdown was a base effect.

The consumer price index measures what households pay. Core inflation leaves out food and fuel, whose prices swing with the weather and oil.

The RBI targets CPI inflation of 4%, within a band of 2% to 6%.

The value an industry adds to what it buys in, summed across the economy. GDP is GVA plus taxes on products, less subsidies.

We split real GVA growth into what each sector contributed.

Monthly output of factories, mines and power plants.

Noisy from month to month, so we read the three-month average.

Prices at the wholesale level, heavy in commodities and fuel.

When WPI runs above CPI, producers' costs are rising faster than what consumers pay.

A strategy or index run on past data as if it had existed then.

NSE's factor indices carry back-tested years from before their launch, which flatter them.

The chance that a strategy's edge is more than luck, after counting every variant that was tried.

We require 0.95 or more before calling a rule's edge real.

A test of whether one series helps forecast another beyond what the other's own past already says.

It measures predictability, not cause.

The number of separate, non-overlapping stretches in a sample. Hundreds of overlapping five-year windows may hold only a few separate five-year periods.

We report it next to every result built on overlapping windows, because the months alone overstate how much evidence there is.

How often a result at least this strong would turn up by chance if there were nothing there. A p-value of 0.05 means one time in twenty.

Below 0.05 is the usual bar. Many tests at once need a stricter bar.

A test whose question, data, method and pass mark were written down and frozen before the result was seen.

It stops us from choosing the test that gives the answer we wanted. Results are published whichever way they fall. Research.

The share of the ups and downs in one series that another accounts for, from 0 to 1.

A low R² can still be a real link; it means most of the variation lies elsewhere.

Return above a safe rate, divided by volatility: how much return each unit of risk earned.

Compare it between strategies over the same years only.

The error of studying only what survived, such as the companies listed now, which leaves out those that failed.

Our stock universes include delisted companies for the years they traded.

An estimate divided by its uncertainty. Beyond 2 either way is the usual sign it is not chance.

The Newey-West version allows for overlapping windows, which would otherwise make results look surer than they are.