Stocks Flashcards
Change
Difference between yesterday’s closing price and the last
Last
Current trading price of one share
Volume
Total number of shares that have been traded on the most recent trading day
Day high
Highest price of stock during current days trading
Day low
Lowest price of stock during current days trading
Open
Price paid in the stocks first transaction of the day
Previous close
Price of the stock at the end of yesterday’s trading
Bid
Price of which someone is willing to pay for a stock
Ask
Price that a holder is willing to sell for
52 week high
Highest price for an individual share of a stock in the past year
52 week low
Lowest price paid for a share within last year
P/E
Closing price divided by latest 12 months earnings per share
Earnings/share
Total earnings divided by number of stocks issued
Dividend
Cash payment per share made by company to the shareholders
Current dividend yield
Yield on a given investment based on its current price
Shares outstanding
Number of shares that have been issued to the public
Exchange
Organization that provides a marketplace for the trading of a listed stock
NYSE
Nasdaq
Underwriter
Sets starting price
Stockholders
Own a piece of the corporation
Capital gain
Increase in value or stock
Capital loss
Price goes down and you lose money
Common stocks
Varied dividend
Board of directors decides if a dividend will be paid
Voting rights
Preferred stocks
Fixed dividend paid at regular intervals (May be less)
Paid before common stockholders if corp fails
No voting rights
Income stocks
Consistent high dividends
Very strong and stable
Growth stocks
Reinvest profits from stocks into corporation
Little or no dividend
Long term
Less established stocks
Young and small corporations
Inexpensive and risky
Blue chip stocks
Large and well established corporations
Market leader in its sector
Safe with moderate returns
Defensive stocks
Remains stable and pays dividend during bad economy
Cyclical stocks
Do well when economy is stable
Do portly in recessions
Par value
Assigned dollar value printed on stock certificate
Market value
Price investors are willing to pay
Undervalued-stock worth more than selling price (good for investors)
Overvalued-stock worth more than potential(risky)
Stock price determined by…
- Earning power (making a profit) & debt
- interest rates (when interest is higher than inflation, people buy stock
- demand (high demand=profit)
- earnings per share (measure of profitably)
- price to earnings ratio (measure of value)
- return on investment (capital gain)
Securities exchange
Marketplace where brokers representing investors meet to buy and sell stocks
-NYSE, AMEX
Over the counter
Network of brokers who buy and sell securities that are not listed on securities exchange
Bull market
Prices are rising or expected to rise
Bear market
Prices are falling
Buy on margin
Borrow money from broker, invest in stocks
Pay back money plus fees
Short selling
Selling stock borrowed from a broker and buy back later at a cheaper price
Buy and hold
Hold stocks for many years and try to earn dividends
Stock split
Corporations increase shares outstanding
Dollar cost averaging
Systematic purchase of an equal dollar amount of the same stock at regular intervals
Direct investment
Buy direct from corporation to avoid brokerage fees and buy at a lower price
Reinvesting dividends
Use dividends to purchase more stock avoiding brokerage fees
Stock indexes
Benchmark used to judge the performance of your investment (Dow jones, standard and poor, Nasdaq composite)
Stock portfolio
Collection of stock holdings
Ticker symbol
Abbreviated stock name
DRIP
Dividend reinvestment plan- buy direct from company
