Stock exchange vocabulary exercises

A lot of people today invest their own money in shares owning a small part of a company either directly through buying the shares themselves on the stock market or indirectly through the people managing their pension scheme investing their money on the stock market for them.

The stock market seems to have its own vocabulary which can be confusing for even people who work in the stock market. In this first of three online exercises on stock market and share vocabulary, we will look at and explain the meaning of some essential terminology that is used in English when talking about the stock market and shares. Some of the vocabulary you will learn here is a little basic. I have included them in this exercise because it is essential to understand what they mean when learning the more advanced stock market vocabulary in the later exercises.

In the following conversation between two work colleagues, Peter explains to Juan how the stock market works and the meaning of some different words and terms used when talking about it.

Then do the quiz at the end to check if you are right. The problem is that I have no idea about it. For example, what's the difference between stocks and shares?

They mean the ownership of part of a company. In Britain, we normally say shares, but in North America they use both. These are generally big companies which allow anybody to buy shares in them.

In fact, only companies which are public limited companies are on the stock market. The majority of companies in the world are private limited companies called 'private corporations' in America , which don't sell their shares on the stock market. Can I do it myself by calling the companies? So you have to set up an account with a stockbroker.

So what's the difference between a stock exchange and the stock market? In New York, you have the New York Stock Exchange and the Nasdaq Stock Exchange. All three stock exchanges are part of the stock market. Each stock exchange has different companies listed on them.

So, if you want to buy shares in Google your stockbroker has to use the Nasdaq Stock Exchange, because that's where Google is listed and their shares are traded. But if you want to buy shares in Ford, your stockbroker has to use the New York Stock Exchange, because that's the stock exchange where Ford is listed. I would like get a good return from the shares, I want to make a lot of money. Do you have any recommendations on what company's shares I should buy?

You should get advice from a stockbroker or look at how a company's shares are performing. Check to see if the share value has increased or decreased. When you own shares in a company you will become a shareholder which means you are a part owner of the company and can vote on who manages or directs the company. You will also receive a dividend on each share you own, which is an extra payment.

If the company is making a profit they normally give some of this profit to their shareholders as a dividend. So your return with be a combination of the dividend and the increase or decrease in the share price. If you want to see how much money you earn on each dollar or pound you have invested, you have to look at the yield.

For dividends you have to divide the yearly dividend per share by the amount you paid for the share. So this shows you would make a higher return on your money from investing in this company's shares than by putting your money in the the bank. Click on the "Check answers" button at the bottom of the quiz to check your answers. For investing their money in a company by buying shares , 'shareholders' normally receive an extra payment called a 'dividend' if the company makes a profit i.

A type of company where its shares are not sold on the stock market, are called. Companies whose shares can be sold on the stock market to the public are called 'public limited companies'. The name 'private limited company' is used in the majority of countries where English is spoken except for America.

In America, they are often called 'private corporations', but they can also be called other names there as well. The name for the money that a company pays to its shareholders, is called the. When a company makes a profit, it has to decide what it wants to do with the money. Normally, companies give some of this profit to their shareholders as a 'dividend' on each share they own.

But often companies keep or retain some of this profit.

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This is called 'retained earnings'. Normally, companies use the money they keep as 'retained earnings' to reinvest in the company e. The actual place where the shares of a company are bought and sold, is called a. This is called a 'stock exchange'. There are over a different 'stock exchanges' in the world. New York has 3 different 'stock exchanges' of which the 'New York Stock Exchange' and the 'NASDAQ' are the two most famous.

Although not common, some companies shares are traded bought and sold on more than one 'stock exchange'. For example, the shares for the oil company BP are traded on both the London Stock Exchange and the New York Stock Exchange. The 'stock market' has a different meaning to 'stock exchange'. A different name for 'shares' that is commonly used in America, is. In this context it means to have an investment in a company where you own a part of the company. It has the same meaning as 'shares'.

For example, 'I own a lot stock in the company' has the same meaning as 'I own a lot shares in the company'.

But there is a difference between the use of 'stocks' and 'shares'. Each unit or piece of ownership in a company is called a 'share' in both North America and the rest of the world. So, both 'I have stock in Apple' and 'I have shares in Apple' are correct.

It is a little confusing.

A type of company where its shares are sold on the stock market, are called. The name 'public limited company' is used in the majority of countries where English is spoken except for America.

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In America, they are often called 'public corporations', but they can also be called other names there as well. A verb that means 'to buy' and 'to sell' that is used in the stock market, is. This verb is commonly used in the stock market. It basically means the process of 'buying' and 'selling'.

To do this, you have to place the preposition 'at' between the verb and the price, e. A different way to say 'profit' when talking about investing your money, is. This can be from buying and selling stocks and shares, bonds, investing in a company, putting your money in a bank etc Normally, a 'return' is measured as a percentage.

Business English Vocabulary: The Stock Market · engVid

With stocks and shares, the 'return' combines the 'dividend' the extra payment you receive for owning a share and the increase in the share's value on the stock market. With 'yield', only the 'dividend' is used to calculate it and not the increase in share value.

A way to say that a company 'is on' a stock exchange, is. It's a different way of saying that the company is a 'public limited company', e. New York Stock Exchange, London Stock Exchange etc This verb is used to talk about companies and is normally used in the passive to be listed , followed by the preposition 'on' and the name of the stock exchange, e. Unless you are licensed as 'stockbroker', you can not buy or sell stocks and shares directly.

Some 'stockbrokers' offer their clients advice on which stocks and shares they should buy and sell these 'stockbrokers' are often called 'full-service brokers'.

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Other 'stockbrokers' only trade stocks and shares for their clients and don't offer any advice. When you want to compare shares in companies to find out which will make the most money for you, you don't look at the dividend, but at the.

Normally, a 'yield' is measured as a percentage. This is me, Chris Clayton, the owner and main writer for Blair English. I'm also a part-time English teacher in sunny Spain. I have a love of history and the web. I hope you find the website useful. Explaining stock market terminology In the following conversation between two work colleagues, Peter explains to Juan how the stock market works and the meaning of some different words and terms used when talking about it.

A type of company where its shares are not sold on the stock market, are called stocks public limited companies private limited companies stockbroker. The name for the money that a company pays to its shareholders, is called the return shareholder dividend yield. The actual place where the shares of a company are bought and sold, is called a trade stock exchange listed return. A different name for 'shares' that is commonly used in America, is stocks public limited companies private limited companies stockbroker.

A type of company where its shares are sold on the stock market, are called stocks public limited companies private limited companies stockbroker. A verb that means 'to buy' and 'to sell' that is used in the stock market, is stockbroker trade stock exchange listed. A different way to say 'profit' when talking about investing your money, is stock exchange listed return shareholder. A way to say that a company 'is on' a stock exchange, is listed return shareholder dividend.

When you want to compare shares in companies to find out which will make the most money for you, you don't look at the dividend, but at the listed return shareholder yield. Click to see more financial English exercises.