11 Key Terms - Part 2

Question 1

Simply how fast a stock moves up and down.

Answer 1

Volatility

Question 2

How easily you can get into and out of a stock.

Answer 2

Liquidity

Question 3

The number of shares being traded each day - a factor that has huge implications for a stock’s liquidity.

Answer 3

Trading Volume

Question 4

You’re betting that the company’s stock will increase in price so that you can buy low and sell high.

Answer 4

Going Long

Question 5

This is when an investor buys more of a stock as the price goes down. This results in a decrease of the average price at which the investor purchased the stock.

Answer 5

Averaging Down

Question 6

Refers to what the market thinks a company’s value is.

Answer 6

Market Capitalization

Question 7

This is the number of shares that can actually trade, once shares that insiders (like the company’s C-suite and early investors) control are subtracted.

Answer 7

Public Float

Question 8

This is the total number of shares that a company can trade. It’s always bigger than the public float.

Answer 8

Authorized Shares

Question 9

An initial price offering which happens when a private company becomes a Publicly-traded company, in order to raise money.

Answer 9

IPO

Question 10

If a company’s stock is doing well, they may do another offering, in order to sell more stock and raise more money.

Answer 10

Secondary Offering

Question 11

These are the large, industry-leading companies offering stable dividend payments.

Answer 11

Blue Chip Stocks