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Stock Market Terminology


1. Buy

Means to buys shares or take position in a company.

2. Sell

Getting rid of the shares as you have achieved your goal or want to cut down losses.

3. Ask

Ask is what people who are looking to sell their stocks are looking to get for their shares.

4. Bid

Bid is what you are willing to pay for a stock.

5. Ask-Bid Spread

Spread is the difference between what people want to spend and what people want to get.

6. Bull

A bull market is a market condition where investors are expecting prices to rise.

7. Bear

A bear market is a market condition where investors are expecting prices to fall.

8. Limit Order

A limit order is a type of order which executes at the price placed for buy or sell.

9. Market Order

A market order is a type of order which executes as quickly as possible at the market price.

10. Day Order

A day order is a direction to a broker to execute a trade at a specific price that expires at the end of the trading day if it is not complicated.

11. Volatility

Means how fast a stock moves up or down.

12. Going Long

Betting on the stock price will increase so that you can buy low and sell high.

13. Averaging Down

This is when an investor buys as the stock goes down so as to increase the price at which purchased.

14. Capitalization

This is what the market thinks a company’s value is.

15. Float

This is the number of shares which can be actually traded after deducting the shares held by insiders.

16. Authorized Shares

This is the total number of shares that a company can trade.

17. IPO

It is an Initial Public Offering that happens when the private company becomes a publicly traded company.

18. Secondary Offering

This is another offering in order to sell more stocks and to raise more money form the public.

19. Dividend

Portion of the company’s earning which is paid to the shareholders.

20. Broker

A broker is a person who buy or sell stocks on your behalf.

21. Exchange

An exchange is a place where different types of investment are traded.

22. Portfolio

A collection of investments owned by you.

23. Margin

Margin account lets a person to borrow money from the broker to buy shares.

24. Sector

A group of stocks in the same sector.

25. Stock Symbol

A one to three character alphabet root symbol which represents a company listed on the exchange.

26. Blue Chip Stocks

The stocks behind large, industry-leading companies. Blue chip stocks offer a stable record of significant dividend payments and have a reputation of sound fiscal management. The expression is thought to have been derived from blue gambling chips, which is the highest denomination of chips used in casinos.