37 Stock market terms that every trader/Investor must know before investing
Here are some stock market terms that you should know if you want to be a profitable trader. I will also provide brief definitions of each to help you become familiar with them. Learn them all.
Table of Contents
What is the stock market?
The stock market is any exchange that allows people to buy and sell shares and companies issue shares. An action represents the capital of the company, and the shares are parts of the company.
When people talk about buying and selling stocks, they mean they bought or sold one or more shares of a particular stock. The purpose of the merchant is to earn money.
- For example, if I buy 2,000 Apple shares at Rs 190 and sell it six months later at Rs 210 per share, I will earn money. If Apple tanks (which is not likely), I could lose money, in which case I would like to sell quickly to limit my losses.
What do the terms of stock trading mean?
The terms of the stock market are industry specific jargon for the stock industry. When experts and amateurs talk about stock trading, they use these stock market terms to talk specifically about strategies, graphics, patterns, indices and other elements of the stock trading industry.
“Learning the terms of the stock market will allow you to accelerate the learning process. I tell my trade Challenge students again and again to investigate first. If you know the stock market, you can benefit much more than if you trade based on instinct or “popular elections.”
Some terms of the stock market, such as bull and bear, which I will cover below, also apply to other investment vehicles, such as real estate. I will only cover their relationship with the actions, but you may see them appear in other conversations.
37 Key basic terms of the stock market
Let’s look at some of the most important stock market terms you will find as you learn to trade stocks. Feel free to bookmark this page so you can come back to it later as a useful reference.
1. Annual report
An annual report is a report prepared by a company that intends to impress shareholders. It contains tons of infor-mation about the company, from its cash flow performance to its management strategy . When you analyze an annual report, you are judging the financial and solvency situation of the company.
Arbitration refers to buying and selling the same value in different markets and at different prices. For example, if the XYZ share is trading at rs10 in one market and rs 10.50 in another, the operator could buy X shares for Rs 10 and sell them for Rs. 10.50 in the other market, pocketing the difference.
3. Average down
When an investor buys more shares as the price falls. This causes your average purchase price to decrease. You can use this strategy if you believe that the general consensus on a company is incorrect, so you expect the share price to recover later.
4. Bear market
Trade negotiations for the stock market are in a downward trend, or a period of falling stock prices. This is the opposite of a bull market. If the price of a stock plummets, it is very bearish.
A measure of the relationship between the price of a share and the movement of the entire market. If the XYZ share has a beta of 1.5, that means that for every 1-point move in the market, the XYZ share moves 1.5 points, and vice versa.
6. Blue Chip Actions
The actions behind large industry leading companies. They offer a stable record of payments of significant dividends and have a reputation for good fiscal management. It is believed that the expression is derived from blue gambling chips, which is the highest denomination of chips used in casinos.
This stock market term is a bit murky. Technically, it is just another name for the stock market and originates from a house in which rich men gathered to exchange shares. However, when you hear it in today’s conversations about the stock market, it generally refers to the Paris stock exchange or a non-US stock exchange. UU.
8. Bull Market
When the stock market as a whole is in a prolonged period of rising stock prices. It is the opposite of a bear market. An individual action can also be bullish or bearish, as well as a sector, which I will describe later.
A person who buys or sells an investment in exchange for a fee (a commission).
The offer is the amount of money that a trader is willing to pay per share for a given action. It is balanced with the sale price, which is what a seller wants per share of that same share, and the differential is the difference between those two prices.
The NSE and the BSE close at 3.30 p.m., The closing simply refers to the moment at which a stock exchange closes on a quote.
12. Day Trading
The practice of buying and selling within the same trading day, before the end of the markets on that day, is called day trading. This is my main commercial strategy, although I also have a long-term portfolio. Traders who participate in daily trading are often referred to as “active traders” or “daily traders.”
A portion of the profits of a company that is paid to shareholders, or people who own the shares of that company, quarterly or annually. Not all companies pay dividends. For example, if you exchange penny stocks, you may not seek dividends.
A place where different investments are negotiated. The best known exchanges in the United States are the NSE(NSE) and the BSE.
When a purchase or sale order is completed, the merchant has executed the transaction. If you ordered to sell 100 shares, this means that the 100 shares have been sold.
In its simplest terms of the stock market, a haircut is an extremely thin extension between the supply and demand prices of a given stock. It can also refer to a situation in which the price of a share is reduced by a specific percentage for margin operations or other purposes.
A high value refers to a market milestone in which an action or index reaches a price point higher than before. Historical highs may indicate that a stock or index has never reached the current price point, but there are also time-limited highs, such as 30-day highs.
A benchmark that is used as a benchmark for merchants and portfolio managers. A 10 percent return may sound good, but if the market index threw 12 percent, then it did not do very well, since it could have invested in an indexed fund and save time by not negotiating frequently.
19. Initial public offering (IPO)
Initial public offer IPO Stock market terms
An IPO is the first sale or offer of a share by a company to the public. It occurs when a company decides to go public instead of remaining the exclusive property of private or internal investors. The Securities and Exchange Commission (SEC) has strict rules that companies must follow before issuing an IPO.
I am not a fan of leverage, but it is good that you know this term of the stock market. When he uses leverage, he borrows shares of an action from his broker in order to increase his earnings. If you borrow shares and sell them at a higher price, return the shares and keep the difference. It is a dangerous game that I urge you to avoid playing.
Low is the opposite of high. Represents a lowest price point for a stock or index .
A margin account allows a person to borrow money (take out a loan, essentially) from a broker to buy an investment. The difference between the loan amount and the price of the securities is called margin.
Trading with margin can be dangerous because, if you are wrong about the direction in which the actions will go, you can lose significant cash. You must maintain a minimum balance in a margin account.
23. Moving average
The average price per share of a share during a specific period of time is called the moving average. Some common deadlines to study in terms of the moving average of an action include moving averages of 50 and 200 days.
In theIndia, the stock market opens at 9:30 a.m., every day. It is based on the commercial hours of BSEand NSE. Trading hours prior to marketing begin at 9:30 a.m time, but most merchants do not start paying attention until approximately 10 a.m.
An investor’s offer to buy or sell a particular amount of stock or option contracts constituted an order. You must place an order to buy or sell 100 shares, for example.
26. Pink Leaf Stock
The term “pink leaves” most commonly refers to penny stocks, which are traded at Rs 5 per share or less. They are also called over-the-counter shares because this is how they are traded. You will not find them in the BSEor NSE, or in any other major exchanges, and they are often smaller companies.
A collection of investments owned by an investor forms its portfolio. You can have only one share in a portfolio, but you can also have an infinite amount of shares or other securities.
The information on the last trading price of a share indicates its price sometimes this is delay twenty minutes unless you are using a real broker trading platform.
A rapid increase in the general level of market prices or the price of a share is known as a rebound. Depending on the general environment, it could be called a bull rally or a bear rally. In a bear market, upward trends of only 10 percent may qualify as a rally.
A group of actions that are in the same industry belong to the same sector. An example would be the technology sector, which includes companies such as Apple and Microsoft. Some stock traders prefer to trade in a specific sector, such as energy,infra, banking , because they know the industry well and can better predict stock price fluctuations.
31. Stock market
Any market in which shares of a company are bought and sold. The stock market is an example, and probably the most significant example, of a stock market.
32. Short sale
When he sells a share short, he borrows shares from another person with the promise to return them in a moment. Then you sell the shares for profit. It is a way to take advantage of an action that you think will decrease in price. After selling short, you can buy back the shares at the lowest price and take the price difference as your profit.
This is the difference between the supply and demand prices of a share, or the amount for which someone is willing to buy it and the amount for which someone is willing to sell it. For example, if a trader is willing to trade XYZ shares for Rs 10 and a buyer is willing to pay Rs 9 for him, the spread is Rs 1.
34. Stock symbol
A stock symbol is an alphabetic root symbol of one to four characters that represents a publicly traded company on a stock exchange.
The price fluctuation of a stock or the stock market as whole. Highly volatile stocks are those with extreme daily movements up and down and wide intraday trading ranges. This is often common with stocks that are little traded or have low trading volumes.
I am a big fan of high volatility stocks because I can make huge profits from spikes or falls, depending on how I am trading, in a short period of time. High volatility often makes trading more exciting, but it is also risky if you have no experience.
The number of shares traded during a particular period of time, usually measured in the average daily trading volume. The volume can also mean the amount of shares you buy from a given stock. For example, buying 2,000 shares of a company is a larger purchase than buying 20 shares.
It often refers to the measure of the return on an investment that is received from the payment of a dividend. This is determined by dividing the amount of the annual dividend by the price paid for the share. If you bought XYZ shares for Rs 40 per share and pay a dividend of Rs 1.00 per year, you have a “return” of 2.5 percent.
The bottom line
Knowing the terms of your stock market will make you a better operator. It takes time to understand the complexities of stock trading/investing, but once you do, the terms of the previous stock market will become part of your daily vocabulary.
I urge you to question the terms of the stock market until you are familiar with all of them. You can also explore other terms of the stock market as they appear in your research so you don’t get confused.