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What are various basic stock trading terms in financial markets?
Below are the basic stock trading terms −
- Buy − Buy shares in company.
- Sell − Selling of shares after meeting the target (personal) or to minimise loss.
- Ask − People are looking to sell their shares or looking get for their shares.
- Bid − Willing to pay for a stock.
- Ask – Bid spread − Difference between what people are spending and what they want to get.
- Bull − Investors will expect prices rise.
- Bear − Investors will expect price fall.
- Limit order − Order that tells about a price to buy or sell.
- Market order − Executes order as quickly as possible.
- Day order − It tells a broker to trade at a particular price, which expires at the end of day.
- Volatility − Traded price of a stock. It may be high or low.
- Going long − Gambling on a stock price which makes you buy a stock at low price and sells when its high.
- Averaging down − Investors buys when stock is down so as to increase the price when purchased
- Capitalization − Company’s value.
- Float − Number of share traded after inside shares.
- Authorised shares − Number of shares a company can trade.
- IPO − When a private company is converted into public company Initial Public Offering (IPO) will happen.
- Secondary offering − Sell more to raise more money from public.
- Dividend − Amount issued by company from its earnings to buy or sell stock.
- Broker − A person who buy or sells stocks on behalf a person.
- Exchange − Different types of investments are traded.
- Portfolio − Investments which are owned by a person.
- Margin − Money borrowed from a broker to buy stocks.
- Sector − Group of stocks with similar business background.
- Stock symbol − It’s an alphabet which represents a listed company in stock exchange.
- Short selling − Borrowing of shares for short span and sell them for profits and buy them back when price is low.
- Quote − Tells about latest trading price of a stock.
- Index − It is used as reference for traders and portfolio managers.
- Haircut − A minute difference between bid and ask price.
- Blue chip stocks − Shares of a company whose fiscal management is good.
- Beta − Measures how price of a stock is going.
- Arbitrage − Buying and selling of same securities in different markets at different points.
- Open − Time at which share market will open.
- Close − Time at which share market will close.
Updated on: 13-Aug-2020
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