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Stock 101 > Stock Market Terminology > Flashcards

Stock Market Terminology Flashcards

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1
Q

Buy

A

Take a position or buy shares in a company

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2
Q

Getting rid of the shares you have purchased because you
A. achieved your goal
or
B. want to cut your losses

A

Sell

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3
Q

Bid

A

What you are willing to pay for a stock

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4
Q

What people selling stocks are looking to get for their shares

A

Ask

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5
Q

Bid-Ask Spread

A

The difference between:
what people have to spend and what people want to get.

The Spread must be resolved before the transaction can take place.

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6
Q

Condition that means the stock prices are expected to rise 📈

A

Bull Market 🐂

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7
Q

Bear Market 🐻

A

Condition in which investors expect stock prices to fall. 📉

Short Sellers Shine Here 🌟

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8
Q

Provides instruction to only execute

  1. at or under a purchase price
  2. at or above a sale prices.

ALWAYS use limit orders, 🙅🏽‍♀️NOT market orders

A

Limit Order

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9
Q

Market Order

A

Provides instruction to execute
A. As quickly as possible
B. Transaction at the present
C. Market price

  • DO NOT USE market orders*
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10
Q

“GTC” Means your order stands until you CANCEL it and will be executed whenever the stock comes to your price
(Even if that’s 2-3 weeks down the road)

A

Good Till Canceled Order

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11
Q

Day Order

A

Means your order is only good for the day when it’s placed.

9:30am - 4:30pm

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12
Q

Volatility

A

Simply how fast a stock moves up and down

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13
Q

How easily you can get INTO and OUT of a Stock

A

Liquidity

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14
Q

Trading Volume

A

The number # of shares being traded each day

Factor that has huge implications for a stocks liquidity (how easily you can get into and out of a stock)

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15
Q

You are betting that the company’s stock will INCREASE in PRICE so that you can BUY LOW and SELL HIGH

Today - buy low 📈 sell high - Tomorrow

A

Going Long

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16
Q

Averaging Down

A

When an investor buys more of a stock as the price goes down 📉

Resulting in a decrease of the average price at which the investor purchased the stock.

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17
Q

What the MARKET thinks of a COMPANY’S VALUE

A

Capitalization

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18
Q

Public Float

A

The number # of SHARES that can actually trade, once shares that insiders (the company’s C-Suite and early investors) control are subtracted

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19
Q

Total number # of shares that a company can trade.

always bigger than the public float

A

Authorized Shares

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20
Q

IPO

A

An INITIAL PRICE OFFERING

Happens when a PRIVATE company becomes a PUBLIC - traded company in order to RAISE money.

21
Q

If a company’s stock is doing well, they may do another offering, in order to

  1. sell more stock
  2. raise more money
A

Secondary Offering

22
Q

Blue Chip Stocks

A

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

23
Q

Foreign Exchange

Trading different currencies

A

FOREX

24
Q

Two different types of investment accounts that you can buy into.
They turn around and invest your money in dozens, hundreds, or even thousands of stocks.

A

Hedge Fund / Mutual Fund

25
Q

ETFs

A

Exchange Traded Funds.

They’re like stocks because you can buy and sell shares but they’re also like mutual funds, because they track an index

26
Q

American Depository Receipts

for Foreign Companies that trade in the US

A

ADRs

27
Q

A MEASUREMENT of the RELATIONSHIP between
A. The price $$$ of a stock and
B. The movement of the whole market.

If stock XYZ has a BETA of (1.5)
that means that for every 1 Point move in the market, stock XYZ moves (1.5) Point and vice versa

A

BETA

28
Q

Broker

A

A person who buys or sells an investment for you, in exchange for a fee

29
Q

The practice of buying and selling within the same trading day, before the close of the markets on that day

A

Day Trading

30
Q

Dividend

A

A portion of a company’s earnings that is paid to shareholders (the people that own that company’s stock) on a quarterly or annual basis

31
Q

A place in which different investments are traded.

Most well-known in the US are:

  1. New York Stock Exchange
  2. NASDAQ
A

Exchange

32
Q

Execution

A

When an order to buy or sell has been completed ✅

If you put in an order to sell 100 shares this means that all 100 shares have been sold.

33
Q

A margin account lets a person borrow money (take out a loan) from a broker to purchase an investment.

The difference between the amount of the loan and the price of the securities is called the margin.

Allows you to trade 4x your money
25,000=100,000

A

Margin

34
Q

Moving Average

A

A stocks average price-per-share during a specific period of time.

Some time frames are 50 and 200 day moving averages.

35
Q

A collection of investments owned by an investor

A

Portfolio

36
Q

Quote

A

Information on a stocks latest trading price

This is sometimes delayed by 20 minutes unless you are using an actual broker trading platform

37
Q

A rapid increase in the general price level of the market or of the price of an individual stock.

A

Rally 📈💸

38
Q

Sector

A

Group of stocks that are in the same business.

Example: “Technology” sector includes Apple & Microsoft

39
Q

1-3 character alphabetical root symbol that represents a publicly traded company on a stock exchange

AMZ - Amazon

A

Stock Symbol

40
Q

The measure of the ROI - return on an investment that is received from the payment of a dividend

A

Yield

41
Q

A share of a company

A

Stock

42
Q

The price is determined by:

A

Negotiation between buyers and sellers

43
Q

Going short

A

Buy high and sell low

Advanced strategy

44
Q

Swing trading

A

Holding onto a position for 2 days or 2 weeks

45
Q

Investing for long term such as 401K

A

Long Term Trading

46
Q

Market hours

A

8:30am-4pm

Start when opens

Go back when closes

47
Q

Commodities

  • soy bean
  • oil
  • corn
A

Futures

48
Q

Options

A

Trading portion of shares instead of whole thing

Stock 101 (2 decks)

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