36 Key Stock Trading Terms You Should Know – Timothy Sykes
In order to learn how to trade, you have to continue to learn the terminology and strategies that go with it…here’s 21 basic stock market trading terms and here’s 25 more stock trading terms.
The more you know, the better prepared you will be to jump into action and predict which direction stocks are going to move in.
Do you think me, the other guru’s on Profitly or my successful students were just born with this knowledge?
NO!
We all had to take the time to learn it. Thankfully, I’m here to make it easy for you through my blog, my video lessons, my newsletters and my DVDs — start with these free video lessons and follow these 5 steps
I go all over the internet gathering terms and basic knowledge that I know will help my students the same way that it helped me make my first million.
I already have 2 millionaire trading challenge students, see millionaire #1 HERE and millionaire student #2 has now turned $1,500 into $1.7 million in 3 years…who will be my 3rd millionaire?
Here are some terms you should all familiarize yourself with if you want to be a successful trader.
Account-this is a where brokerage firm has a record of your transactions.
Asked Price-this is the lowest price you can expect to purchase a security. The current ask price is the lowest that someone is will to sell the security for.
Annual Report-this is the yearly financial statement that shows the corporation’s financial condition. There is also a 10K, which contains more detail than the annual report. There, you will find information like company history, organizational structure, equity, holdings, earnings per share, and subsidiaries.
At The Market-this is a stock order that tells the broker to buy or sell a security at the current trading price.
Bid Price-this is the highest price that you can currently sell a security at.
Bear-this is a person that expects the market or a stock to fall in value. (Bear down)
Bull-this is a person that expects the market or a security to rise in value.
Book Value-this is the total value of assets of a company minus their liabilities and shares of preferred stock.
Broker-this is someone that acts as a sort of agent in the buying and selling of securities.
Bond-this is a promissory note of a corporation. There are also government bonds in which it is a promissory note from the government.
Collateral-this is securities or other assets that are pledged by a borrower to ensure the repayment of a loan.
Commission-this is the broker’s fee for buying or selling a security. This can vary a lot based on which broker you use, how many shares you are trading, and how you place the trade (on the phone, on a trading platform, etc).
Dividend- this is a payment made by the company to the shareholders.
Diversification-this is said to lower the risk of your portfolio. It spreads out your capital among many different types of investments.
Earnings Per Share- this is the amount of net income that a company earns divided by the amount of common stock after they pay any dividends to preferred stockholders.
Fiscal Year- this is a corporation’s accounting year based on a 12-month time period. Not necessarily January 1 to December 31.
Float-this is the number of shares of a company that is generally available for buying and selling.
Floor Trader-a stock exchange member who trades on the floor of an exchange. There are fewer and fewer of these people following the increase in technology.
Fundamental Analysis- this is the process of evaluating a company by studying management and financial conditions in order to gauge the company’s true value.
Good ’Til Canceled-this is a stock order to either buy or sell that stays in effect until you cancel it.
Growth Stock-this is a company that has shown the ability to increase profits, generally over at least a five year period of time.
Hype-I deal with this a lot. It is when those scummy stock promoters mislead investors by throwing around misleading and inaccurate information used to increase a stock’s price.
Leverage-this is when a trader uses borrowed funds to increase the rate of return on an investment.
Limit Order-this is a type of order where an individual instructs their broker to buy or sell a security at a clearly stated price, or better. I use orders like this, NEVER market orders.
Margin-this is when a trader borrows money from a brokerage firm in order to buy securities.
Net Income-this is a company’s profits from operations.
Net Worth-this is a company’s assets minus liabilities.
Open Order-this is an order that a trader has given to buy or sell stock, but has not yet been completed or filled. So if you have an order to buy stock XYZ at $50 but the order is still open, you still do not own stock XYZ.
Portfolio-this is all the specific securities you currently hold.
Public Offering-this is the sale of securities to the general public.
Rally-a sudden increase in the market value of a company.
Reverse Split-this is when a company reduces the total number of outstanding shares.
Shares Outstanding-this is the number of shares owned by the public and not held by the company.
Stock Split-this is dividing existing stock into more shares. It reduces the price per share.
Stop Order-this is an order buy or sell a security when its price surpasses a particular point in order to increase profitability. These orders are not a 100% guarantee since the stock must trade at the price that you entered your order to get filled.
Volume-this is the number of shares of stock traded.
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36 Key Stock Trading Terms You Should Know – Timothy Sykes
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