40 Terms Every Trader Should Know – External Marketing When a stock sells additional shares to the stock market to raise more capital for business growth. 40 Terms Every Trader Should Know Stock Symbol Bear Market Bid Trading Volume Yield Short Interest Quote Going Long Ask Liquidity Forex IPO Bull Market Day Order Portfolio Market Order Going Short Bid-Ask Spread Blue Chip Stocks ETF SecondaryOffering A short string of letters that represents a publicly traded company. For example, AMZN is the stock symbol for Amazon. A limit order will only get filled at the price you set or better; you should always use limit orders to avoid getting filled at an unfavorable price. A market of declining stock prices that are expected to keep declining. The price you’re willing to pay for a stock or option. Pricing information on a stock; make sure you’re looking atreal-time data (not delayed) for pricing when placing a trade. GTC orders won’t be cancelled until you cancel it, so they can be filled even weeks after being placed if the stock hits your set price. You think the stock price is going up, so you buy stock shares or enter an options trade that benefits from an increase in price in the stock. The price other people are willing to sell their stock or option for. Stocks that trade a lot of shares each day are liquid, meaning you can get in and out of the stock quickly; stocks that trade low volume are harder to get in and out of, so they’re less liquid. Foreign Exchange, pairs of currencies that are traded against each other. Initial Public Offering, when a company issues shares to the stock market for the first time to raise capital for business growth. You think the stock price is going down, so you short stock shares or enter an options trade that benefits from a decrease in price in the stock. The difference between what people can sell a stock or option for and what they can buy a stock or option for; we typically set our limit orders for somewhere in the middle. These are valuable, stable companies that often perform better in rough market conditions; for example, Microsoft (MSFT), Apple (AAPL), and Chase (JPM) are blue chip stocks. Exchange Traded Funds trade like regular shares of stock, but they represent baskets of stocks, or track an index like SPY, which tracks the S&P 500 index. Filled immediately after placed at whatever the current price is; don’t use market orders because stock and option prices can bounce around quite a lot, possibly giving you a bad price. A market of rising stock prices that are expected to keep rising. This order is only good for the day that it is placed and will be cancelled if not filled by the end of the day. The group of stocks held in an investor’s account. Averaging Down Volatility Market Cap ADR Dividend Buying more of a stock or option as price decreases, resulting in a lower trade entry price. How fast a stock can move up and down; for example, TSLA is a very volatile stock, it makes big moves fast. Market Capitalization, how much a company is worth, which is calculated by multiplying the number of shares outstanding by the price per share. American Depository Receipts are foreign stocks trading in the U.S. marketsHedge Funds/Mutual Funds. A percentage of profits paid to shareholders of a stock; for example, if you own Microsoft stock, you get 0.97% dividend paid to you for the shares you own. Limit Order Good TillCancelled Order The amount of shares of stock trade per day; this can tell you if a stock is relatively liquid or illiquid. Yield is the percentage of return investors receive from dividends on stocks they own. Percentage of shares of a company that are sold short;. people sell shares short when they think the stock is going down. Hedge Funds/Mutual Funds Beta Beta is how closely correlated a stock is with the market; if a stock has a beta of 1.5, that means when the stock market moves 1 point, the stock moves 1.5 points. Broker On the platform where you buy and sell stocks and other securities, your broker makes the transaction happen for a small fee for options, but there is no longer a fee for stocks. Day Trading A day trade is when you buy and sell a stock or option on the same trading day. Pattern DayTrading Rule Accounts below $25,000 can only do 3 day trades in a 5 day period; exceeding this comes with penalties. Exchange Where securities are traded, like the NASDAQ; our Simpler Trading traders don’t choose what exchange they trade on, they just let the broker choose. Execution When you enter a trade, you wait for it to be executed; once your order is filled, you bought/sold the stock or option, meaning your order was executed. Margin Trading on margin means you’re trading on money borrowed from your broker; this comes with fees, much like credit card interest. Moving Average A stock’s average price over time; i.e. a 50-period moving average on the daily chart is the stock’s average price over the last 50 days; we look at moving averages to identify the trend. Rally Upward price movement in a stock or the market, that happens relatively quick. Sector Want to learn more? Visit us at www.SimplerTrading.com or email us at [email protected] The industry/business a stock is in; for example, Facebook stock is in the technology sector. Honey Badger A Simpler Trading term meaning a stock that doesn’t care what the rest of the market is doing, it’s going to do what it wants; for example, a stock rallying when the market is down. Hedge funds and mutual funds are ways to invest your money in baskets of stocks. These funds invests your money into many different stocks.