19 Stock Market Terms to Know

It’s important to know Wall Street terminology so you can can have a better understanding of what’s going with your investments and choose more wisely.

The truth is Wall Street likes to use big, confusing terms to make things sound more complicated then they are but don’t worry, we are going to break them down for you right now.

1.) Buy

Take a position in a company. After you buy shares you now own shares of their stock.

2.) Sell

Getting rid of the shares you purchased, this could be for good or bad reasons.

3.) Day Trade

Buying and selling the same shares within the same market day

4.) Swing Trade

Short-term trading method that can be used when trading stocks and options.

Whereas Day Trading positions last less than one day, Swing Trading positions typically last two to six days, but may last as long as two weeks.

5.) Forex

The trading of different world currencies

6.) Volume

The number of shares that changed hands during a given day

7.) Float

The number of shares actually available for trading.

Float is calculated by subtracting closely held shares — owned by insiders, employees, the company’s Employee Stock Ownership Plan or other major long-term shareholders — from the total shares outstanding.

Courtesy of RightLine.net

8.) Support

Support or support level refers to the price level below which, historically, a stock has had difficulty falling.

It is the level at which buyers tend to enter the stock. If the price of a stock falls toward a support level, it is a test for the stock: the support is either confirmed or eradicated

9.) Resistance

Resistance or resistance level is a price point on a bar chart for a security in which upward price movement is impeded by an overwhelming level of supply for the security that accumulates at a particular price level.

This is the opposite of support.

10.) Volatility

How fast the stock moves up and down

11.) Financial Statements 

Records that a company must share that give investors an inside look at the business’s, expenses, revenue, and overall numbers. (LEARN TO READ THESE!)

12.) Catalyst

Any news or reason the stock has for it to go a certain direction, example of a positive catalyst would be positive earnings for the company

13.) Bullish

When a stock is moving higher and investors have a positive sentiment on the stock’s price

14.) Bearish

 when a stock is moving lower and investors have a negative sentiment on the stock’s price

15.) Long

Buying a stock at a lower price in hopes that it will go up, if you’re in a long position, support is your friend

16.) Short

Betting against a stock by borrowing shares from your broker and selling them at a higher price, hoping the price falls, if you’re in a short position resistance is your friend

17.) Offering

The issuance of new stock for public sale from a company that has already made its initial public offering (IPO).

Usually, these kinds of public offerings are made by companies wishing to refinance, or raise capital for growth.

18.) IPO

which stands for ‘Initial public offering’ is the first time a company sells their stock to public investors

19.) Earnings

The earnings of a business are the same as its net income or its profit. Either term means the same thing.

Earnings are usually calculated as all revenues (sales) minus cost of sales, operating expenses, and taxes, over a given period of time (usually a quarter or a year)

3 thoughts on “19 Stock Market Terms to Know

  1. You have a bit of adsense code on this article, might want to remove it bro, otherwise, love this article and the simple definition of the terms. Thanks!

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