Stock Trading Glossary – Practical Calculators

Comprehensive Glossary of Stock Trading Terms

Ask Price: The lowest price a seller is willing to accept for a stock.
Asset: Anything of value owned by a company or investor.
Arbitrage: The practice of buying a stock in one market and selling it in another for a profit.
Average Daily Volume: The average number of shares traded per day.
After-Hours Trading: Trading that occurs outside regular market hours.

Bear Market: A market characterized by declining stock prices.
Bid Price: The highest price a buyer is willing to pay for a stock.
Blue-Chip Stocks: Stocks of large, established, and financially stable companies.
Broker: A person or firm that facilitates stock trades for investors.
Bull Market: A market characterized by rising stock prices.

Candlestick Chart: A chart that shows price movements over a specific time frame using candlestick patterns.
Capital Gains: Profit made from selling a stock at a higher price than its purchase price.
Circuit Breaker: A regulatory measure that temporarily halts trading when extreme price movements occur.
Commission: A fee charged by a broker for executing a trade.
Common Stock: Shares that represent ownership in a company, with voting rights.

Day Trading: The practice of buying and selling stocks within the same trading day.
Dividend: A portion of a company’s earnings distributed to shareholders.
Dow Jones Industrial Average (DJIA): A stock market index of 30 large, publicly traded U.S. companies.
Drawdown: The peak-to-trough decline in an investment’s value.
Debt-to-Equity Ratio: A financial metric comparing a company’s total debt to its shareholder equity.

Earnings Report: A company’s financial performance report released quarterly.
ETF (Exchange-Traded Fund): A type of investment fund that trades like a stock on an exchange.
Equity: Ownership interest in a company.
Ex-Dividend Date: The date after which a stock is traded without the right to receive the declared dividend.
EPS (Earnings Per Share): A company’s profit divided by its outstanding shares.

Fundamental Analysis: Evaluating a stock by analyzing financial statements and market conditions.
Float: The number of shares available for public trading.
Futures Contract: An agreement to buy or sell a stock at a predetermined price in the future.
Foreign Exchange (Forex): The global marketplace for trading currencies.

Growth Stock: A stock expected to grow at a faster rate than the market average.
Gap Up/Down: A stock opening significantly higher/lower than its previous closing price.
Golden Cross: A bullish chart pattern where a short-term moving average crosses above a long-term moving average.

Hedge Fund: A private investment fund that uses advanced strategies to maximize returns.
High-Frequency Trading (HFT): Automated trading using powerful computers to execute large numbers of orders rapidly.
Holding Period: The length of time an investment is held before being sold.

Index Fund: A mutual fund or ETF that tracks a market index.
Initial Public Offering (IPO): The first sale of a company’s stock to the public.
Insider Trading: Buying or selling stocks based on non-public information, which is illegal.

Junk Bonds: High-risk, high-yield bonds issued by companies with lower credit ratings.

Key Performance Indicator (KPI): A metric used to evaluate a company’s success.
Kicker: An extra feature of a bond or preferred stock that makes it more attractive to investors.

Limit Order: An order to buy or sell a stock at a specific price or better.
Liquidity: The ease with which a stock can be bought or sold without affecting its price.
Leverage: Using borrowed money to increase investment returns.
Long Position: Buying a stock with the expectation that its price will rise.

Market Capitalization (Market Cap): The total value of a company’s outstanding shares.
Margin Trading: Borrowing money from a broker to trade stocks.
Market Order: An order to buy or sell a stock immediately at the best available price.
Moving Average: A stock’s average price over a set period used to identify trends.

NASDAQ: A major U.S. stock exchange focused on technology stocks.
Net Asset Value (NAV): The value of a mutual fund’s assets minus its liabilities.
New York Stock Exchange (NYSE): The largest stock exchange in the world by market capitalization.

Options Contract: A contract giving the buyer the right to buy or sell a stock at a set price before a specific date.
Over-the-Counter (OTC) Market: A decentralized market for trading stocks that are not listed on major exchanges.

Price-to-Earnings (P/E) Ratio: A company’s stock price divided by its earnings per share.
Penny Stocks: Low-priced stocks, often under $5 per share, with high risk.
Portfolio: A collection of investments owned by an individual or institution.
Put Option: A contract giving the owner the right to sell a stock at a specific price before expiration.

Quarterly Earnings: A company’s financial performance report released every three months.

Resistance Level: A price point where a stock tends to face selling pressure.
Return on Investment (ROI): The profit or loss on an investment relative to its cost.
Risk Tolerance: An investor’s ability to endure market fluctuations.

Short Selling: Borrowing and selling a stock with the intention of buying it back at a lower price.
Stock Split: A corporate action that increases the number of shares while reducing their price proportionally.
Stop-Loss Order: An order placed to sell a stock when it reaches a certain price to limit losses.
Swing Trading: A trading strategy that aims to capture short- to medium-term stock movements.

Technical Analysis: Using historical price data and chart patterns to predict future stock movements.
Ticker Symbol: A unique series of letters representing a publicly traded company’s stock.
Trading Volume: The number of shares traded in a given period.
Trailing Stop Order: A stop-loss order that moves with a stock’s price to lock in profits.

Undervalued Stock: A stock that is considered to be priced lower than its intrinsic value.
Unrealized Gain/Loss: Profit or loss on an investment that has not yet been sold.

Wall Street: The financial district in New York City and a term often used to refer to the stock market.
Wash Sale Rule: A tax rule preventing investors from claiming a loss on a stock they repurchase within 30 days.