What is the definition of DISCOUNT in stock market ?
(What is the meaning of discount in stock trading. It is often used by tv channel reporters on stock market. I am comfused please help me. Thanks.)
Answer :
If they’re saying that the market or a certain stock is “discounting” some bit of expected news (earnings, a CEO change, an interest rate cut, etc.) that means they think the market or stock price already factors that news in and so they’re not expecting any significant change in the stock price as a result of the event when it actually happens.
If they’re saying some stock is trading at a discount to its expected growth (or something like that), it means that the price of the stock is lower than what would be predicted using standard measures of evaluating the fair price of the stock.
If they’re talking about a closed end mutual fund, it means the fund shares are selling for less than the total value of all the stocks that the fund owns.
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