Stock Markets Terms That Are Important

Every industry has a set of jargons used often by experts to communicate within the peer groups, in the securities market, the communication is short and trading terms are used. Amateurs who are new to the financial markets could find it overwhelming to respond to jargons used due to the paucity of timing that is extremely important for stock market live trading sessions. Using terms like charts, patterns spread, and indices could be challenging, learning important terms that are often used will give a good perspective of the stock market in general.

Accelerating the learning process is important for understanding the trading challenges and pick the important terms that are ultimately aimed to generate profit from the selling of the stocks or shares of a company at a higher price, and purchasing them at a lesser price.

Basic Key Terms

  • the exchange that facilitates a set of stocks of a company, equity in terms of every single share or piece of a company, bought and sold at a common medium of exchange with other traders in a global forum is referred as stock markets
  • the annual report of a company is extremely important to know how the financial health of the company is before one has picked up the nuances of skilled trading, the cash flow, the performances, and the financial ratios help in understanding the company
  • buying and selling of the same stocks in different markets, exchanges at different pricing will give the advantage to the trader to sell the stock at a higher price after buying them at a lower price the, difference being the profit on arbitrage
  • the usual practice of buying more shares when the pricing is down and decreasing the average purchase price is a strategy that traders use in a general market scenario, it is better to keep the holding for the pricing to rebound in a bullish market, thus averaging the cost down on the stock
  • when markets are reflecting a downward trend or a brief period of falling prices of stocks, the market is said to be bearish, when the prices are showing an increasing trend they are said to be bullish
  • the measurement of a stock against the physical price value is measured in terms of Beta, the movement of price from 100 to 150 will directly reflect the stock to move by similar value, measured in terms of