InvestorQ : What is a correction? I have been hearing this word a lot with context to stock market
Mahima Roy made post

What is a correction? I have been hearing this word a lot with context to stock market

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1 year ago
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Correction ka matlab- kisi bhi company ke share price ka 10% ya 10% se jyada gir jana.
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natasha Samani answered.
1 year ago
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Correction with respect to stock market refers to a decline of 10% or greater level in the price of a stock or index from its most recent peak. This generally happens when investors feel that the price is over-valued and so the stock or index face a decline in its price or level, respectively.

For example, if the price of a stock is currently trading at a certain level, say Rs. 220. Now if the Rs.220 is the intrinsic value of the stock so the price is justified and there will be fewer chances of the price decline below this price. However, if the intrinsic value of this particular stock is less than Rs. 220 and for some reasons the price has hiked to this level, then there will be a greater chance of the price to decline to its intrinsic value, eventually. If the intrinsic value is Rs.170- Rs.180 and the decline in price happens to be Rs. 175 then this movement will be known as a correction.

The same applies to the index like Sensex and Nifty. If the Sensex and Nifty decline from its peak to 10% or greater than this will be known as a correction.

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Gufrankhan answered.
1 year ago
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hii hello iska matlab kiya he bolo

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