Book Building

Book Building is a price discovery method used during an IPO, where the company issuing shares does not fix a specific price. Instead, an underwriter invites institutional investors to submit bids within a price range, which helps determine the final issue price based on demand. 

Related Terms

Bonds

Bonds are fixed-income securities issued by governments or corporations in exchange for a loan. They provide a fixed interest rate over a specified time period. The quality of a bond is determined by its credit rating, reflecting the issuer’s creditworthiness.

Bluechip Fund

A Bluechip Fund is a mutual fund that invests in bluechip stocks, which are large, established companies with a proven track record of stable returns. These stocks tend to perform well even in adverse market conditions. Investors can track performance using the Bluechip Index. 

Bid and Ask

The Bid is the highest price a buyer is willing to pay for a security, while the Ask is the lowest price a seller is willing to accept. The difference between the Bid and Ask prices is called the spread, influencing trading and liquidity.

Bounce

A Bounce occurs when a stock hits a support level, where its price resists further decline, and then sharply rebounds upward. This support can be represented by a trend line, moving average, or a combination of technical indicators, signaling a potential price reversal.

Bracket order

A Bracket Order is an intraday trading strategy that helps traders limit losses and lock in profits by placing three orders simultaneously: a buy or sell order, a target order to book profits, and a stop-loss order to limit potential losses. 

Broker

A Broker is an intermediary between investors and securities exchanges, facilitating the buying and selling of stocks, ETFs, futures, and options. Only registered brokers, whether individuals or firms, can place trades on exchanges, making them essential for investors to access financial markets.

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