What are various basic stock trading terms in financial markets?

Finance ManagementAccountingAcademic Content

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 11:27:49