Stock Market Terminology Flashcards
Buy
Take a position or buy shares in a company
Getting rid of the shares you have purchased because you
A. achieved your goal
or
B. want to cut your losses
Sell
Bid
What you are willing to pay for a stock
What people selling stocks are looking to get for their shares
Ask
Bid-Ask Spread
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.
Condition that means the stock prices are expected to rise 📈
Bull Market 🐂
Bear Market 🐻
Condition in which investors expect stock prices to fall. 📉
Short Sellers Shine Here 🌟
Provides instruction to only execute
- at or under a purchase price
- at or above a sale prices.
ALWAYS use limit orders, 🙅🏽♀️NOT market orders
Limit Order
Market Order
Provides instruction to execute
A. As quickly as possible
B. Transaction at the present
C. Market price
- DO NOT USE market orders*
“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)
Good Till Canceled Order
Day Order
Means your order is only good for the day when it’s placed.
9:30am - 4:30pm
Volatility
Simply how fast a stock moves up and down
How easily you can get INTO and OUT of a Stock
Liquidity
Trading Volume
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)
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
Going Long
Averaging Down
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.
What the MARKET thinks of a COMPANY’S VALUE
Capitalization
Public Float
The number # of SHARES that can actually trade, once shares that insiders (the company’s C-Suite and early investors) control are subtracted
Total number # of shares that a company can trade.
always bigger than the public float
Authorized Shares
IPO
An INITIAL PRICE OFFERING
Happens when a PRIVATE company becomes a PUBLIC - traded company in order to RAISE money.
If a company’s stock is doing well, they may do another offering, in order to
- sell more stock
- raise more money
Secondary Offering
Blue Chip Stocks
These are large, industry-leading companies offering stable dividend payments.
Foreign Exchange
Trading different currencies
FOREX
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.
Hedge Fund / Mutual Fund
