Basic terminology for stock market

As with anything else, mastering the stock market means mastering the lingo — and for traders, that can be a bit confusing at first.

Below, you will find a list of stock market terminology, including the most common stock terms and their definitions for a better grasp of stock market operations. Ask — The price that a seller is willing to take for a share of stock; how much it will cost you to buy stock. Bear Market — A period of declining stock value, usually accompanied by investor pessimism. Block Trade — Buying or selling a large amount of shares; the minimum is 10, shares but most block trades are much larger.

Blue Chip — An established company with a national or international reputation for stability, profitability, and value. Bull Market — A period of rising stock value, usually accompanied by investor optimism.

Bid — The price that a buyer is willing to pay; how much you will make when you sell. Dow Jones Industrial Average — The leading stock market index in the U.

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Electronic Communication Network ECN — Computer system that facilitates stock trading outside of a stock exchange. Fundamental Analysis — Examining the financial health and strength of a company to determine its share price, future value, and earnings expectations.

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Hedge — Limiting your losses or reducing risk by placing orders to cover two or more possible events in the market. Limit Order — When you want to buy or sell a stock at a specific price or better.

Open-high-low-close OHLC — A type of chart that shows you the open, high, low, and close price of a stock for a period of time; a candlestick chart is an OHLC chart.

Quote — The bid, ask, and last price for a stock at a given point during the trading day. Stop Order — When you want to buy or sell a stock after it reaches a certain price; at that time, the order turns into a market order. Used often to limit losses or to protect profits also known as a stop-loss order.

Volume — The amount of shares being traded at a given point in time; this gives you an idea of how much interest there is in the stock. Home Stock Tutorials Stock Brokers Reviews Optionshouse Review TradeKing Review TD Ameritrade Review ETrade Review Scottrade Review Penny Stock Brokers Binary Options Brokers Contact More..

OptionsXpress Review Alternative Investments About. Stock Market Terminology Tweet Tweet As with anything else, mastering the stock market means mastering the lingo — and for traders, that can be a bit confusing at first.

Ask — The price that a seller is willing to take for a share of stock; how much it will cost you to buy stock Back testing — Applying a strategy to historical data to see if it is valid Bear Market — A period of declining stock value, usually accompanied by investor pessimism.