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Stock Terminology

Apr 4th, 2018
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  1. 1. Averaging Down
  2. This is when an investor buys more of a stock as the price goes down. This makes it so your average
  3. purchase price decreases.
  4.  
  5.  
  6. 2. Bear Market
  7. This is trading talk for the stock market being in a down trend, or a period of falling stock prices.
  8. This is the opposite of a bull market.
  9.  
  10.  
  11. 3. Beta
  12. A measurement of the relationship between the price of a stock and the movement of the whole
  13. market.
  14.  
  15.  
  16. 4. Blue Chip Stocks:
  17. These are the large, industry leading companies. They offer a stable record of significant dividend
  18. payments and have a reputation of sound fiscal management.
  19.  
  20.  
  21. 5. Bull Market
  22. This is when the stock market as a whole is in a prolonged period of increasing stock prices.
  23. Opposite of a bear market.
  24.  
  25.  
  26. 6. Broker
  27. A person who buys or sells an investment for you in exchange for a fee (a commission).
  28.  
  29.  
  30. 7. Day Trading
  31. The practice of buying and selling within the same trading day, before the close of the markets on
  32. that day.
  33.  
  34.  
  35. 8. Dividend
  36. This is a portion of a company’s earnings that is paid to shareholders, or people that own hat
  37. company’s stock, on a quarterly or annual bas
  38.  
  39.  
  40. 10. Execution
  41. When an order to buy or sell has been completed. If you put in an order to sell 100 shares, this
  42. means that all 100 shares have been sold.
  43.  
  44.  
  45. 11. Hedge
  46. This is used to limit your losses. You can do this by taking an offsetting position.
  47.  
  48.  
  49. 12. Index
  50. An index is a benchmark which is used as a reference marker for traders and portfolio managers.
  51.  
  52.  
  53. 13. Initial Public Offering (IPO)
  54. The first sale or offering of a stock by a company to the public, rather than just being owned by
  55. private or inside investors.
  56.  
  57.  
  58. 14.​Margin
  59. A margin account lets a person borrow money (take out a loan essentially) from a broker to
  60. purchase an investment.
  61.  
  62.  
  63. 15. Moving Average
  64. A stock’s average price-per-share during a specific period of time. Some time frames are 50 and 200
  65. day moving averages.
  66.  
  67.  
  68. 16. Order
  69. An investor’s bid to buy or sell a certain amount of stock or option contracts. You have to put an
  70. order in to buy or sell 100 shares of stock.
  71.  
  72.  
  73. 17. Portfolio
  74. A collection of investments owned by an investor. You can have as little as one stock in a portfolio
  75. to an infinite amount of stocks.
  76.  
  77.  
  78. 18. Quote
  79. Information on a stock’s latest trading price. This is sometimes delayed by 20 minutes unless you
  80. are using an actual broker trading platform.
  81.  
  82.  
  83. 19. Rally
  84. A rapid increase in the general price level of the market or of the price of a stock.
  85.  
  86.  
  87. 20. Sector
  88. A group of stocks that are in the same business. An example would be the “Technology” sector
  89. including companies like Apple and Microsoft.
  90.  
  91.  
  92. 21.​Spread
  93. This is the difference between the bid and the ask prices of a stock, or the amount someone is
  94. willing to buy it and someone is willing to sell it.
  95.  
  96.  
  97. 22. Stock Symbol
  98. A one-character to three-character, alphabetic root symbol, which represents a publically traded
  99. company on a stock exchange.Apple’s stock symbol is AAPL.
  100.  
  101.  
  102. 23. Volatility
  103. This refers to the price movements of a stock or the stock market as a whole. Highly volatile stocks
  104. are ones with extreme daily up and down movements and wide intraday trading ranges.
  105.  
  106.  
  107. 24.Volume
  108. The number of shares of stock traded during a particular time period, normally measured in
  109. average daily trading volume.
  110.  
  111.  
  112. 25. Yield
  113. This usually refers to the measure of the return on an investment that is received from the payment
  114. of a dividend. This is determined by dividing the annual dividend amount by the price paid for the
  115. stock.
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