In the dynamic world of stock markets, understanding key terms like share price, target price, and stop loss is crucial for every investor. These concepts form the backbone of informed trading decisions and risk management.
The **share price** refers to the current market value at which a company’s stock is trading on the exchange. It fluctuates constantly based on supply, demand, company performance, and broader economic factors. Investors monitor this price to gauge the stock’s real-time valuation.
**Target price**, on the other hand, is an analyst’s or investor’s projection of where the stock price might reach in the future. It’s often based on fundamental analysis, earnings forecasts, and market trends. For instance, if a stock trades at ₹100 with a target of ₹150, it signals potential upside.
**Stop loss** acts as a safety net. It’s a predetermined price level at which an investor agrees to sell the stock to limit losses. Say you buy at ₹100 and set a stop loss at ₹90 – if the price drops to ₹90, the stock sells automatically, protecting your capital.
Mastering these terms empowers investors to strategize effectively, balance risks, and maximize returns in the share market.