Stock Market KeyWords

By: ShortMeTina

Stock market keywords fly around the stock market community all the time; as a trader (newbie or seasoned) it makes sense to know them; if you want to partake in conversations and not come off completely out of touch.  Find below stock market keywords I believe every trader should know.  This is NOT an entire list but something to get you started. 

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Analyst
An individual who looks at fundamentals and/or technical analysis of a company and makes recommendations to either buy, sell or hold securities.
 
Ask
Price you’re willing to sell your security.
 
Bear
An investor who feels a particular security will decline in value. 
 
Bear Market
A prolonged period in which investment prices decline.  Technically defined as a decline of more than 20%  (from its highs) in the major indexes.
 
Bid
What you’re willing to pay for a security or an offer to purchase a specified security at a specified price. 
 
Breakout
When a security passes a previous point of resistance or resistance level.
 
Broker
An individual who works with securities and/or commodities. 
 
Bond
An I.O.U from the issuer. 
 
Bull
An investor who fells a particular security will increase in value. 
 
Bull Market
A prolonged period in which investment prices rise.

Buy and Hold
An investment strategy in which a person buys a security and holds it over an extended period of time.  Popularized by investors such as Warren Buffett and William Graham. 
 
Correction
Technically defined as a decline of less than 20% over a short period of time. 
 
Cover (Covering)
When a short seller purchases shares on the open market; he has covered the shares he sold short (sold on the open market). 
 
Day Trade
A trade that an individual open and closes on the same day. 
 
Day Trader
A person who strictly daytrades. 
 
Equity
Is defined as the amount of money you hold in your investing or trading account.

Fundamental Analysis
An analysis of a companies fundamental picture, such as future earnings potential, ROI, revenue, price-to-earnings (P/E) ratio, debt, dividends, etc.

Gap
Opening price of a stock is higher than the prior days high or low.

Illiquid
A market with an insufficient amount of volume or buyers to sell to. 

IPO (Initial Public Offering)
An initial public offering of a stock, where the general public can purchase these shares for the first time. 
 
Limit Order
A specified price (including shares) you’re willing to sell or buy a security at.   
 
Liquid
A market with a sufficient amount of volume.

Lock-up Period
A set time frame (typically 90 to 180 days) where majority share holders are restricted from selling their shares. 

Market Order
Is an action, which tells your broker to buy or sell a particular security at its current price (whatever that may be).  Typically filled immediately. 

Overbought
Stock has appreciated too much, too fast and generally is considered set for a pull-back.

Oversold
Stock has depreciated too much, too fast and generally is considered set for a bounce or rise in share price.

Over-trading
Getting In/out of trades for the sake of trading.

Quote
Current price (bid/offer) of a stock.

Resistance
A price point that serves as a "wall".  When reached; sellers step in and the stock typically declines. 

Sell-off
A steadfast decline in share prices.

Short
Selling a stock you do not own; in hopes of repurchasing it at a lower price point. 

Spread
The difference between the Bid and Ask.
 
Stock
Partial ownership in a company.
 
Stop-Loss
A specified price you’re willing to sell your security at to limit losses.

Support
A price point that serves as "support".  When reached, buyers generally step-in and hold up the price of the stock. 

Technical Analysis
Utilization of charts to determine where a stock price will be in the future. 

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