What are fundamentals in stocks?

Stock fundamentals are key metrics for a company, such as cash flow and return on assets (ROA). Analysts often perform fundamental analysis to analyze a stock by looking at its fundamentals. This involves looking at any data which is expected to impact the price or perceived value of a stock.

What is fundamental derivatives?

Fundamental Derivatives Analysis Fundamental analysis is the appreciation of the economics and intrinsic value underlying a particular trade. If you want to know where to invest and why, you use the techniques of fundamental analysis.

What are the types of fundamental analysis?

There are two types of fundamental analysis – Qualitative and Quantitative. Qualitative is inclined towards goodwill, market conditions, brand value, and company performance. In contrast, the quantitative analysis is statistically driven. Fundamental analysis is often compared with technical analysis.

What is a bear and bull market?

A bull market occurs when securities are on the rise, while a bear market occurs when securities fall for a sustained period of time. It’s important to understand the differences between bull and bear markets and how they impact your investment decisions.

What are called derivatives?

A derivative is a contract between two or more parties whose value is based on an agreed-upon underlying financial asset (like a security) or set of assets (like an index). Common underlying instruments include bonds, commodities, currencies, interest rates, market indexes, and stocks.

Why is fundamental analysis used?

Fundamental analysis helps in predicting the long-term trends in the market. It is generally used for long-term investments as it enables you to understand the price that the stock should reach. It also allows you to find good companies for investment, such as those with strong growth potential.

What is buying on margin?

Buying on margin involves getting a loan from your brokerage and using the money from the loan to invest in more securities than you can buy with your available cash. Through margin buying, investors can amplify their returns — but only if their investments outperform the cost of the loan itself.

What is Sensex and Nifty?

Nifty and Sensex are benchmark index values for measuring the overall performance of the stock market. Nifty is the Index used by the National Stock exchange, and Sensex is the Index used by the Bombay Stock Exchange.

What is PE and EPS?

EPS and PE are two important financial ratios used to measure a company’s profitability and share price. They are both calculated by dividing a company’s net income by its number of shares outstanding. EPS is the earnings per share, while PE is the price-to-earnings ratio.

What is ROE and ROCE?

Return on equity (ROE) is a commonly used metric for comparing companies. It’s relatively straightforward and is calculated by dividing the net income by total equity. On the other hand, return on capital employed (ROCE) is calculated by dividing the operating profit after taxes by the capital employed.