Table of Contents
The stock market can seem like a complex and jargon-filled world, especially for beginners. But fear not, intrepid investor! This blog is your one-stop guide to understanding all the essential stock market terms you’ll encounter.
82 Stock Market Term:-
1. Stock
It represents ownership in a company. A single unit of a stock is a share. If you own 50% of YouTube stock, you own half of YouTube.
2. Shareholder
someone who owns a stock.
3. Stock exchange
A place where investors can buy or sell stocks.
4. Public company
company whose ownership is organized via shares of stock that are intended to be freely traded on a stock exchange.
5. Bull market and bear market.
Bull market: When things are on the upswing and prices are climbing higher.
Bear market: When things are down in the dumps and prices are dropping. They are named after each animal’s attack style.
6. Volatility
How fast the stock price moves up and down.
7. Volume
number of shares of a company traded each day.
8. Capital
broad term that can describe anything that gives value to its owners. It usually refers to money, but it can also describe machinery patents.
9. liquidity
How easily you can get into and out of a stock. It increases with volume.
10. Bubble
bubbles occur when prices for a particular item rise far above the item’s real value due to too much optimism. Sooner or later, the high prices become unsustainable and they fall dramatically until the item is valued at or even below its true worth.
11. IPO
Initial public offering happens when a private company becomes publicly traded to raise money.
12. Dividends
a portion of a company’s earnings that is paid to people who own the stock. Not every company pays dividends.
13. Blue chip stocks
a stock that comes from a well-known established company. With a history of strong performance, they also have a history of paying dividends.
14. Forex
Foreign Exchange involves trading different currencies.
15. Portfolio
A set of investments held by an investor.
16. Holdings,
contents of a portfolio.
17. Interests
when you get or give a loan, the one who is lending the cash usually wants more cash than what he initially lent. The extra cash that has to be given is called interest.
18. Bond.
When an investor gives a loan to a company or a government, the investor earns through interest.
19. Security
tradable financial instruments such as stocks and bonds.
20. Broker
Since you can’t directly go to the stock exchanges to buy stocks, someone will do it for you usually for a fee. This is called a broker. Nowadays, they are mostly online platforms.
21. Going long
betting that a company’s stock price will increase so that you can buy low and sell high.
22. Asset
source with economic value that someone owns or controls with the expectation that it will provide a future benefit.
23. Commodity
basic goods interchangeable between producers such as grains, gold, beef, oil, and natural gas. It usually refers to raw materials.
24. Yield
It’s what you earn from an investment.
25. Pe ratio
The price-to-earnings ratio is one of the most widely used tools that investors and analysts use to determine a stock’s valuation. It’s one indicator of whether a stock is overvalued or undervalued. However, the pe ratio can mislead investors because past earnings do not guarantee future earnings will be the same. Likewise, projected earnings may not happen.
26. Index
It’s a method to track the performance of a group of assets indexes typically measure the performance of a basket of stocks intended to replicate a certain area of the market. The most famous index is the S and P 500 which tracks the 500 largest US companies.
27. Futures
contracts that obligate parties to buy or sell an asset at a predetermined future date and price the buyer must purchase or the seller must sell the underlying Guarantee of the purchase (or sale) of an asset at a specific price, no matter what the market price is later.
28. Options
options, and contracts give buyers the right but not the obligation to buy or sell depending on the type of contract, an underlying asset at an agreed-upon price, and date-call options allow the holder to buy the asset at a stated price within a specific time frame. But with put options, you can sell the asset at a certain price by a certain date.
29. ETFs
baskets of stocks that trade like regular stocks can be passively or actively managed, passively managed. ETFs just tries to match the underlying stocks, actively managed ETFs has a manager or team making decisions on what stocks to put in the basket.
30. IRAs
is a long-term savings account that allows individuals with earned income to save for retirement and potentially enjoy tax benefits.
31. liability
something a person or company owes.
32. Penny stocks
shares valued at less than $5. They are usually considered highly risky.
33. Market cap
It refers to how much a company is worth as determined by the stock market.
34. leverage
It refers to using borrowed money from a lender to invest. It’s done to increase the potential return on investment. It also greatly increases the risks.
35. Balance sheet
which shows what a company owns (assets), owes (liabilities), and the investment from shareholders (equity) on a specific date. It provides a list of what a company owns and owes as well as the amount invested by shareholders.
36. Inflation
The general increase in prices erodes your purchasing power over time. Money becomes less valuable.
37. Bid
the highest price at which a buyer is willing to pay.
38. Ask
for the seller’s lowest price.
39. Bid-ask Spread
calculate the difference between the asking and bidding prices. It has to be resolved before the transaction can take place.
40. Black Swan
It’s slang for a completely unforeseen and unexpected event.
41. Dead cat bounce
It’s like a stock price hiccup before continuing its downward spiral.
42. Wales
It’s slang for investors or corporations with such large capital that their buys and sells make waves in the market. Only animals of gigantic size can.
43. UNICORNS
Startsups that have some to be valued at $1 billion or more named like this for their incredible rarity.
44. To the moon
it’s slang for a stock or asset rising in price stratospherically often quickly.
45. Tanking
the opposite of to the moon stocks depreciating in value, often quite significantly and quite quickly.
46. Jigged out
when a market moves into an unfavorable position and you close out your trade only for the market to rally into a position where you would have made a profit or at least not a loss.
47. Pump and Dump
form of fraud that involves artificially inflating the price of an owned stock through false and misleading positive statements pump in order to sell the cheaply purchased stock at a higher price dump. Once the operators of the scheme dump, sell their overvalued shares, the price falls and the other investors lose their money.
48. Rug pool
a pump and dump in new small cryptocurrencies usually done their creators.
49. Panic selling
widespread sell off of a stock a sector or an entire market due to fear or overreaction. Rather than reasoned analysis usually happens when prices start to decrease a lot which makes the price decrease even more stock exchanges temporarily halt trading when panic selling reaches a specified level in an attempt to break the cycle of fear and selling.
50. Shorting
investment strategy that speculates on the decline of a stock’s price. The investor borrows shares of a stock from a lender and instantly sells them when it’s time to give them back. The investor has to buy back the shares to reive them to the lender. If the price has gone down, he keeps the difference between the initial price and the new price. This however comes with unlimited risk as the stock price can go up infinitely and the investor is forced to buy it back.
51. Short squeeze
When the stock’s price unexpectedly increases drastically over a short period of time, the investors who were shorting are forced to cut losses by exiting their positions, which means buying back the stocks to reive them to the lender. This makes those investors lose money and it makes the stock’s price increase even more. Since all of the short investors have to buy it.
52. Limit order
It’s an order to buy or sell a stock at a specific price or better.
53. Stop loss order
order place to buy or sell a specific stock. Once the stock reaches a certain price.
54. Long squeeze
basically the same thing as the short squeeze. But those who are going long get squeezed. This is usually caused by the trigger of many stop loss orders and by people panic selling.
55. Market order
It’s an order to buy or sell a stock at the best available price in the market. It typically ensures execution but it doesn’t guarantee a specified price. It’s kind of like buying a product without negotiating.
56. Good till canceled order
It’s an order to buy or sell stock that lasts until the order is completed or canceled.
57. Day order
It’s an order to buy or sell a stock at a specific price that expires at the end of the trading day if not completed.
58. Averaging down
it’s a strategy that involves a stock owner purchasing even more stocks when the price drops. As the name says, it decreases the average price at which the investor purchases, the stock.
59. Fading
A trader who deliberately goes against market sentiment or trends.
60. Hedge fund
limited partnership of private investors whose money is managed by professional fund managers who use a wide range of risky strategies to earn above average investment returns. They usually require a high minimum investment or net worth and they often target wealthy clients.
61. Mutual fund
they pool assets from shareholders to invest in stocks. They are operated by professional money managers who allocate the fund’s assets and attempt to produce gains for the fund’s investors. Mutual funds give small or individual investors access to professionally managed portfolios. Each shareholder therefore participates proportionally in the gains or losses of the fund.
62. Control
Stock refers to shares owned by major shareholders of a company. These shareholders will have either a majority of the shares outstanding or a portion of the shares that is significant enough to allow them to exert a controlling influence on the decisions made by the company.
63. Holding company
businesses that don’t produce or sell anything but they hold the controlling stock in other companies. The company owned by a holding company are called subsidiaries. While it may oversee the company’s management decisions, it does not actively participate in running the day to day operations of its subsidiaries.
64. Index fund
type of mutual fund or ETF with a portfolio constructed to match or track the components of an index such as the S and P 500.
65. Day trading
It’s a fast paced trading strategy where individuals buy and sell stocks within the same trading day. The primary goal of day traders is to profit from short term price movements.
66. Swing trading
swing trading is a medium paced trading strategy with trades that last from a couple of days to several months. The goal is to profit from an anticipated price move.
67. Intrinsic value
measure of what an asset is worth. It’s usually different from the current market price of that asset.
68. Book value
It’s the value of a business according to its books, it theoretically represents what investors would get if they sold all of the company’s assets and paid all its debts. While intrinsic value takes into account estimates for the future book value only measures the present.
69. Price to book ratio
It compares a share market price to its book value.
70. Value investing
It’s a trading strategy that involves selecting stocks that seem to be priced below their intrinsic or book value. Investors usually believe that the market overreacts to good and bad news and buy stocks that they think the market is underestimating.
71. Growth investing
growth Investors typically invest in young and small companies whose earnings are expected to increase at an above-average rate compared to the market. This can provide better returns but it also often comes with more risk.
72. Earnings per share
It indicates how much money a company makes for each share of its stock by dividing its net profit by the number of common shares. It has outstanding.
73. Technical analysis
It’s a trading strategy employed to identify trading opportunities by analyzing statistical trends.
74. Fundamental analysis
Fundamental analysts identify trading opportunities by analyzing the actual factors of the company such as its competitors, its management effectiveness, the state of its industry.
75. Efficient market hypothesis
It’s the hypothesis that share prices reflect all available information making it impossible to beat the market consistently.
76. Supply and demand
Supply denotes the amount of a good or service that is available. While demand is the quantity that people want. If demand is high and supply is low, prices tend to rise. When supply is high and demand is low, prices usually decrease.
77. Insider trading
It’s the activity of trading in a public company’s stock by using information that is not available to the public. This information is usually gathered from employees of that company managers, et cetera. This is illegal most of the time.
78. Ticker symbol
it’s just an abbreviation used to uniquely identify publicly traded companies.
79. Compound interest
It means earning interest, not just on your original investment but also on the interest you earned over time. This creates an exponential curve of earnings over long periods.
80. Profit margin
It’s the percentage of profit a company makes from its revenue after subtracting all of its costs.
81. Dollar cost averaging
It’s a strategy that consists of investing a fixed amount of money at regular intervals regardless of the asset’s price. This helps reduce the impact of market volatility.
82. Return on investment
It’s how much profit or loss you’ve made on an investment relative to its cost.
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