- Ask price: The lowest price at which a seller is willing to sell a share of stock.
- Bid price: The highest price at which a buyer is willing to buy a share of stock.
- Broker: A licensed individual or firm that buys and sells securities on behalf of investors.
- Bull market: A period of time when stock prices are rising consistently.
- Bear market: A period of time when stock prices are falling consistently.
- Circuit breaker: A temporary halt in trading that occurs when the stock market moves down or up by a certain percentage in a single day.
- Dividend: A portion of a company’s profits that is paid out to shareholders on a quarterly or annual basis.
- Earnings per share (EPS): A measure of a company’s profitability per share of stock.
- Exchange-traded fund (ETF): A basket of securities that trades on an exchange like a stock.
- Initial public offering (IPO): The first time that a private company sells its shares to the public.
- Limit order: An order to buy or sell a security at a specific price or better.
- Market order: An order to buy or sell a security at the best available price.
- Margin: Money that an investor borrows from a broker to buy securities.
- Mutual fund: A professionally managed investment company that pools money from investors and invests it in a variety of securities.
- Nasdaq: A stock exchange that specializes in technology and other growth stocks.
- New York Stock Exchange (NYSE): The largest stock exchange in the world.
- Order book: A list of all the buy and sell orders for a security, ranked by price.
- Over-the-counter (OTC) market: A decentralized market where securities are traded directly between buyers and sellers.
- Portfolio: A collection of all the investments that an investor owns.
- Price-to-earnings ratio (P/E ratio): A valuation ratio that compares a company’s stock price to its earnings per share.
- Resistance level: A price level at which a stock’s upward momentum is expected to slow or stop.
- Support level: A price level at which a stock’s downward momentum is expected to slow or stop.
- Ticker symbol: A unique identifier for a security.
- Volatility: A measure of how much the price of a security fluctuates over time.
- READ MORE TERMS RELATED TO STOCK AND INVESTMENT
These terms are essential for understanding the stock market and making informed investment decisions. If you are new to investing, I recommend that you learn more about these terms before you start putting your money at risk.