Financial writing uses so much shorthand that beginners often nod along without a clear picture. None of it is complicated once it is untangled. Here are eight words you will meet almost every day.
| Term | Plain-English meaning |
|---|---|
| Share | One unit of ownership in a company. |
| Equity | Another word for ownership in a company. |
| Stock | A general word for a company's shares, or a collection of them. |
| Market cap | The total value of a company's shares — share price × shares outstanding. |
| Volume | The number of shares traded in a period. |
| Liquidity | How easily a share can be bought or sold without moving its price. |
| Volatility | How much a share's price swings up and down. |
| Index | A basket of shares tracked as one number to represent a market or segment. |
Eight words that make most market headlines readable.
Terminology explorer
Tap any term to see a plain-English explanation.
Share
One unit of ownership in a company.
If a company has 1 crore shares and you own 1 lakh of them, you own 1% of the company.
Volume, liquidity and volatility
These three describe how a share trades, and they are easy to confuse. Volume is how many shares changed hands — a count of activity. Liquidity is how easily you can trade without shifting the price — a measure of the depth of standing orders. Volatility is how much the price swings — a measure of how restless it is.
They can move independently. A share can see high volume on one frantic day and still be illiquid on quiet days. A calm, liquid share can be volatile for a week around a results announcement.