Despite the fact that there are many stock market terms that a trader should know, only a few of them are used often.
If you want to succeed in stock market, you must need the basic knowledge of the stock market terms. Here, we are going to discuss some of the stock market terms a beginner should know.
WHAT IS STOCK MARKET
It is a kind of exchange where traders can buy and sell stocks or companies to issue stocks. There are two main purposes for stock market:
First, to provide capital to companies in need of fund to extend their business.
Second, to provide chances for investors to have profit along with the listed companies in the exchange.
There are lots of industry-specific stock market terms in stock market which are frequently used.
STOCK MARKET TERMS A BEGINNER SHOULD KNOW
- Buy – It means to purchase shares or get hold of positions in companies.
- Sell – It means to vend your shares in order to fulfill your goal or to cut down losses.
- Ask – It is an offer price which the seller is willing to accept for a share.
- Bid – It is the highest price that a buyer will pay in order to get a share.
- Spread – It is the difference between the highest buying price and lowest selling price.
- Bear – In a bear market, the prices are expected to fall.
- Bull – In a bull market, the prices are expected to rise.
- Market Order – It is the order that takes place as soon as possible at the market price.
- Limit Order – It is the order that takes place at the placed price for sell or buy.
- Day Order – It indicates the direction to trade at a particular price which expires at the end of the day.
- Volatility – It indicates how rapidly a share moves up or down.
- Going Long – It is the betting on share’s price will rise with an aim to sell high & buy low.
- Averaging Down – It is the buying of a stock when its price falls down with an aim to buy at a decreased price.
- Capitalization – It is the indication of a company’s value in the market.
- Float – It is the amount of stocks that can be traded after removing the shares detained by the insiders.
- Authorized Shares – It is the total amount of tradable shares owned by a company.
- IPO – Initial Public Offering is a public offering that takes place when a private company becomes a public trading one. Read more about IPO
- Secondary Offering – It is an offering to raise more money from the public through selling more stocks.
- Beta – Beta measures the volatility of a stock with respect to market Movement. Stock Beta – Read more About
- Dividend – It is the part of a company’s profit that is remunerated to the shareholders.
- Broker – It indicates a person who represents you to sell or buy stocks.
- Exchange – It is a place in which distinct kinds of trading investments takes place.
- Portfolio – It is the set of investments in your name.
- Margin Account – It is an account that allows you to borrow money from a broker in order to buy stocks that you alone cannot afford.
- Sector – It is the collection of same or related stocks.
- Stock Symbol – It is a 1-3 character alphabet root symbol that represents a listed company.