what are terms used in stock market

101 Stock Market Terms Every Good Trader & Investor Knows

• Algorithmic Trading. Algorithmic Trading is the use of pattern recognition & analysis software to execute trading...
• Alpha. Alpha is a term used to describe the ability of a portfolio, fund, or strategy to beat the market, e.g.,...
• Automated Trading System. An Automated Trading System is a platform that allows...

Full Answer

What are stock terms?

Stock Terms Flashcards. A stock symbol or ticker symbol is an abbreviation of the company name to be used for purposes of trading. The highest and lowest price of the stock in the most recent 52 week period. the annual payment per share to owners of stock. Usually paid quarterly (three months).

What is stock market terminology?

Stock futures opened lower on Thursday ... "The two things we're most concerned about right now in terms of headwinds for the market and causes for volatility, are clearly tensions with Russia ...

What is basic stock market?

The stock market is where shares are bought and sold by individual and institutional investors. In the modern era, the process is conducted electronically through major stock indices such as the Nasdaq 100, FTSE 100 and DAX, each of which represent the performance of a basket of constituent stocks.

Is the stock market open or closed?

which is open on most federal holidays, will also be closed. Market Watch reported that financial markets will be closed on Thanksgiving Day and reopen the day after Thanksgiving, however, stock ...

What are the terms that use in stock market?

Basic Stock Market Terms you should knowAgent: An agent is a stock brokerage firm which does the buying/selling of shares on behalf of the investor in the stock market.Ask/Offer: ... At the money: ... Broker. ... Bear Market: ... Bull Market: ... Beta: ... Bid:More items...•

What are the 4 types of stocks?

Here are four types of stocks that every savvy investor should own for a balanced hand.Growth stocks. These are the shares you buy for capital growth, rather than dividends. ... Dividend aka yield stocks. ... New issues. ... Defensive stocks. ... Strategy or Stock Picking?

What are the 7 types of stocks?

7 Categories of Stocks that Every Investor Should KnowIncome Stocks. An income stock is an equity security that offer high yield that may generate from the majority of security's overall returns. ... Penny Stocks. ... Speculative Stocks. ... Growth Stocks. ... Cyclical Stocks. ... Value Stocks. ... Defensive Stocks.

What is nifty and sensex?

Sensex stands for Stock Exchange Sensitive Index and it is a stock market index for BSE, whereas, Nifty stands for National Stock Exchange Fifty and it is a stock market index of NSE. Nifty is operated by a subsidiary of NSE called NSE Indices Ltd. On the other hand, Sensex is operated by BSE.

What is difference between share and stock?

Definition: 'Stock' represents the holder's part-ownership in one or several companies. Meanwhile, 'share' refers to a single unit of ownership in a company. For example, if X has invested in stocks, it could mean that X has a portfolio of shares across different companies.

Which type of share is best?

Best stocks for beginnersReliance Industries Limited. Reliance Industries stock. Reliance Industries Limited (RIL) is India's largest private sector company. ... Tata Consultancy Services. TCS stock. ... HDFC Bank. HDFC Bank stock. ... Hindustan Unilever Limited. HUL stock. ... Maruti Suzuki India Limited. Maruti Suzuki stock.

What are the 2 types of stocks?

There are two main types of stocks: common stock and preferred stock.Common Stock. Common stock is, well, common. ... Preferred Stock. Preferred stock represents some degree of ownership in a company but usually doesn't come with the same voting rights. ... Different Classes of Stock.

What NYSE means?

New York Stock ExchangeNew York Stock Exchange (NYSE), one of the world's largest marketplaces for securities and other exchange-traded investments. The exchange evolved from a meeting of 24 stockbrokers under a buttonwood tree in 1792 on what is now Wall Street in New York City.

What is the Stock Market?

The stock market is a place where parties (both individuals and institutions) buy and sell stocks. There are several world-renowned exchanges like the New York Stock Exchange and the NASDAQ.

Why do you need to know stock terms?

If you are an active investor, knowing these stock terms will help you see additional pathways for increasing your cash flow. When there’s a term you don’t understand, you can go down that proverbial rabbit hole and learn a whole new way of trading.

What is Stock Trading?

Stock trading is the act of buying or selling stock. A trader may buy shares of stock and hold on to them for long periods of time, letting the price appreciate and/or collecting dividends. There is nothing wrong with this strategy, which has been used by great investors like Warren Buffet to build sizeable wealth.

What is blue chip stock?

Blue-Chip Stocks - Blue-chip stocks are known for their quality and stability. Although there is no single definition, investors typically agree that a blue-chip stock has a market capitalization of over $5 billion dollars

What is beta in stock?

Beta - Beta is the result of a calculation that measures the relative volatility of a stock in correlation to a particular standard.

How often do active traders trade?

Active traders place trades at least 10 times per month. They may follow current events, general market trends, and company activity to time their moves.

What is market maker?

Market makers used to pack onto the floor of the stock exchange and fight through the frenzied mob of other stock brokers until they connected with a willing party to the transaction. Today, most matchmaking between buyers and sellers is done electronically.

What is the stock market?

A stock market is a highly organised and sophisticated set-up where investors or traders acquire or surrender a piece of ownership in the company by purchasing and selling of shares, in exchange for funds. First, let us understand the key term “Shares” that form the basis of other stock market terms.

What is the stock market language?

A language is often a corridor to a new world, a new vision. Similarly, stock market terms constitute the language of the stock market universe. The stock market terms are the lexica of the financial world. These are industry-specific jargons to describe the various phenomena of the stock market. These are the terms used by amateurs as well as the bellwethers of the financial world to explain an array of products in the stock market, market patterns, investing strategies, charts, indices, trading strategies etc. The stock market terms are like a window to the securities market. The terms will help you to see and perceive the stock market through the broad lens of an investor.

What is volatility in stock market?

Volatility refers to the degree or the extent in fluctuation in the prices of the stock. Highly volatile stock witness abnormal highs and lows during the trading session, while low volatile stocks experience ups and downs to a lesser degree. Investing in highly volatile stocks can result in enormous gains or tremendous losses.

What is arbitrage in securities?

Arbitrage is the simultaneous purchase and sale of the same securities in different markets to benefit from the momentary price variations prevailing in different markets. Arbitrage ensures that the minor price differences in the same securities in different markets are eliminated, leading to uniformed prices across market exchanges.

What happens when you buy a put option?

The buyer of the put option expects the price of the underlying asset to go down. If the price of the underlying asset is below the strike price, the gain is the difference between the strike price and current price of the stock, multiplied by the lot size. In case the strike price is above the stock price, the buyer loses the premium paid.

What is call option?

A call option gives the buyer the right but not the obligation to buy an underlying asset at the strike price on or before the expiry date. The buyer of a call option speculates that the market is bullish, and the prices of the underlying asset will increase. If at the expiry date, the price of the underlying asset is below the strike price, the buyer refuses to exercise his right. His loss is limited to the premium paid. If the price of the underlying asset is above the strike price, the profit is the current stock price minus the strike price, multiplied by the lot size, with the premium deducted as a cost of the call option.

What is derivative financial?

A derivative is a financial instrument that derives its value from the underlying asset or group of assets. Futures and options are examples of derivatives. Usually, underlying assets are market indexes, shares, commodities, currencies ..

What are the terms used in the stock market?

Most people understand basic stock market terms like Bulls, Bear, Long & Short. But most do not know important terms like 10-K Report, Alpha, Bid-Ask Spread, Debt to Equity, or Fair Value. Other critical lingo includes Earnings Per Share, Margin of Safety, Discounted Cash Flow, or EBITDA. Understanding this jargon is important for your success.

What is the stock market?

The Stock Market is a general term for all trading centers (stock exchanges) that enable the exchange of shares of public companies. Today, the term Stock Market refers to all the stock exchanges in all the countries of the world. We can view all Stock Exchanges around the world as part of one giant global Stock Market.

What is common stock?

Common Stock is another term for publicly traded shares of stock. Companies list Common Stocks on exchanges. Anybody can buy Common Stock. Common Stockholders usually have voting rights in a company.

What does it mean to beat the market?

To beat the market means that your stock investments will need to outperform the underlying index of stocks. In the USA, the market to beat is generally the 8% annual return of the S&P500 index. Anyone could beat the market in a single year, but outperforming the market over the long term is the challenge.

What does a bear market show?

A Bear Market does not show the health of the overall economy. Instead, the market shows investors’ view of the economy’s health. If investors think the economy is bad, they sell, creating a Bear Market. If investors believe the economy is good, they buy, creating a Bull Market.

What does Alpha mean in investing?

Alpha is a term used to describe the ability of a portfolio, fund, or strategy to beat the market, e.g., outperform the underlying index. If a strategy beats the market, usually the S&P500, by 2% in a year, it is awarded an Alpha of 2.

Why do stocks bubble?

Investor overconfidence and fear of being left out of moneymaking opportunities drive Bubbles. Bubbles sometimes occur when prices for only one class of investments grows. For instance, Stock Market Bubbles often occur when interest rates are low and the real estate and commodities markets are stagnant.

What is the difference between GDP and market cap?

A company’s market cap is a proxy of its net worth in the eyes of public markets and changes constantly, while GDP measures the economic output of a country in a given year. But companies directly and indirectly affect the economies of countries around the world.

How many stocks are dividend aristocrats?

The U.S. Dividend Aristocrats are a basket of 65 stocks in the S&P 500 index. These companies have been growing their dividend per share consecutively, for a minimum of 25 years. This is easier said than done, since companies often distribute dividends quarterly.

Who said "Investing should be boring"?

Legendary investor George Soros once said, “Good investing should be boring”. But an increase in volatile themes today suggests this maxim has gone ignored by at least some market participants.

Is the stock market a daunting task?

Understanding the stock market can be a daunting task for any new investor.

What is stock market terminology?

Stock market terminologies are industry-specific stock market terms that are frequently used when we read or talk about the stock market.

What is the Stock Market?

The stock market is a type of exchange that allows traders to buy and sell stocks as well as companies to issue stocks.

What is a broker?

Broker – A broker is a person who buys or sells stocks on your behalf.

What is the second purpose of the stock market?

The second purpose that the stock market serves is to give the investors an opportunity to share in the profits of companies that are listed on the stock exchange.

What is market order?

Market Order – A market order is a type of order which executes as quickly as possible at the market price.

What does "sell" mean in stock market?

Sell – Getting rid of the shares as you have achieved your goal or want to cut down losses.

What is the stock symbol?

Stock Symbol – A one to three-character alphabet root symbol which represents a company listed on the exchange.