Understanding Terms And Definitions

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Understanding Terms and Definitions


1. Averaging Down

This is when an investor buys more of a stock as the price goes down. This makes it so your average purchase price decreases.


2. Bear Market

This is trading talk for the stock market being in a down trend, or a period of falling stock prices. This is the opposite of a bull market.


3. Beta

A measurement of the relationship between the price of a stock and the movement of the whole market.


4. Blue Chip Stocks:

These are the large, industry leading companies. They offer a stable record of significant dividend payments and have a reputation of sound fiscal management.


5. Bull Market

This is when the stock market as a whole is in a prolonged period of increasing stock prices.

Opposite of a bear market.


6. Broker

A person who buys or sells an investment for you in exchange for a fee (a commission).


7. Day Trading

The practice of buying and selling within the same trading day, before the close of the markets on that day.


8. Dividend

This is a portion of a company’s earnings that is paid to shareholders, or people that own that company’s stock, on a quarterly or annual basis. Not all companies do this.


9.Exchange

An exchange is a place in which different investments are traded. The most well-known in the United States are the New York Stock Exchange and the Nasdaq.


10. Execution

When an order to buy or sell has been completed. If you put in an order to sell 100 shares, this means that all 100 shares have been sold.


11. Hedge

This is used to limit your losses. You can do this by taking an offsetting position.


12. Index

An index is a benchmark which is used as a reference marker for traders and portfolio managers.


13. Initial Public Offering (IPO)

The first sale or offering of a stock by a company to the public, rather than just being owned by private or inside investors.


14.Margin

A margin account lets a person borrow money (take out a loan essentially) from a broker to

purchase an investment.


15. Moving Average

A stock’s average price-per-share during a specific period of time. Some time frames are 50 and 200 day moving averages.


16. Order

An investor’s bid to buy or sell a certain amount of stock or option contracts. You have to put an order in to buy or sell 100 shares of stock.


17. Portfolio

A collection of investments owned by an investor. You can have as little as one stock in a portfolio to an infinite amount of stocks.


18. Quote

Information on a stock’s latest trading price. This is sometimes delayed by 20 minutes unless you are using an actual broker trading platform.


19. Rally

A rapid increase in the general price level of the market or of the price of a stock.


20. Sector

A group of stocks that are in the same business. An example would be the “Technology” sector including companies like Apple and Microsoft.


https://www.youtube.com/watch?v=eV3TVY4sLPA&t=878s&ab_channel=Speakwithlarry

Click the link to read along:

Understanding Terms and Definitions


1. Averaging Down

This is when an investor buys more of a stock as the price goes down. This makes it so your average purchase price decreases.


2. Bear Market

This is trading talk for the stock market being in a down trend, or a period of falling stock prices. This is the opposite of a bull market.


3. Beta

A measurement of the relationship between the price of a stock and the movement of the whole market.


4. Blue Chip Stocks:

These are the large, industry leading companies. They offer a stable record of significant dividend payments and have a reputation of sound fiscal management.


5. Bull Market

This is when the stock market as a whole is in a prolonged period of increasing stock prices.

Opposite of a bear market.


6. Broker

A person who buys or sells an investment for you in exchange for a fee (a commission).


7. Day Trading

The practice of buying and selling within the same trading day, before the close of the markets on that day.


8. Dividend

This is a portion of a company’s earnings that is paid to shareholders, or people that own that company’s stock, on a quarterly or annual basis. Not all companies do this.


9.Exchange

An exchange is a place in which different investments are traded. The most well-known in the United States are the New York Stock Exchange and the Nasdaq.


10. Execution

When an order to buy or sell has been completed. If you put in an order to sell 100 shares, this means that all 100 shares have been sold.


11. Hedge

This is used to limit your losses. You can do this by taking an offsetting position.


12. Index

An index is a benchmark which is used as a reference marker for traders and portfolio managers.


13. Initial Public Offering (IPO)

The first sale or offering of a stock by a company to the public, rather than just being owned by private or inside investors.


14.Margin

A margin account lets a person borrow money (take out a loan essentially) from a broker to

purchase an investment.


15. Moving Average

A stock’s average price-per-share during a specific period of time. Some time frames are 50 and 200 day moving averages.


16. Order

An investor’s bid to buy or sell a certain amount of stock or option contracts. You have to put an order in to buy or sell 100 shares of stock.


17. Portfolio

A collection of investments owned by an investor. You can have as little as one stock in a portfolio to an infinite amount of stocks.


18. Quote

Information on a stock’s latest trading price. This is sometimes delayed by 20 minutes unless you are using an actual broker trading platform.


19. Rally

A rapid increase in the general price level of the market or of the price of a stock.


20. Sector

A group of stocks that are in the same business. An example would be the “Technology” sector including companies like Apple and Microsoft.