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Stock Market Vocab
For Senior Economics
Question | Answer |
---|---|
Ask | the price at which a trader offers to sell their shares |
Bear Market | A market condition in which prices are expected to fall |
Bid | The price a trader is willing to pay for shares of a stock |
Blue chip stocks | Stocks of well-known companies known for their quality and stability |
Bond | a type of security loaned by an investor to a borrower like a company or government used to fund its operations |
Bull Market | A market condition in which prices are expected to rise |
Capital Gains | the profit earned after selling an asset or investment for a higher price than you paid for it |
Common Stock | type of security that represents ownership in a company |
Day trading | practice of buying and selling shares of stock within a single day |
Diversification | investment strategy that divides investment funds across a variety of assets in order to minimize overall risk |
Dividend | a portion of earnings paid out to a company's shareholders |
Dow Jones Industrial Average (DJIA) | stock market index consisting of the 30 most-traded blue-chip stocks on the NYSE |
Stock exchange | a marketplace where investors and traders buy and sell stocks. Examples include the NYSE and Nasdaq. |
Exchange-Traded Fund (ETF) | collection of stocks or bonds combined in a single fund that can be purchased and traded on major stock exchanges. |
Expense Ratio | measures the cost of owning a mutual fund, including expenses like the management of the fund, overhead fees, and any other costs associated with running the fund (on a $10,000 dollar investment with a .20% expense ratio, you'll pay $20 plus the stock) |
Futures | contract that requires a buyer to purchase a specific asset, and the seller to sell that asset at a certain future date at an agreed-upon price. |
Buying Long | The act of buying stock shares with the expectation that the price will rise, resulting in profit |
Buying short | The act of selling stock shares with the expectation that the asset's price will fall. When an investor goes short on an asset, they borrow that asset, sell it, and hopefully purchase it later at a lower price, resulting in profit |
Index Funds | investment funds that follow the performance of a specific stock market index |
IPO | Initial Public Offering, refers to a previously private company that becomes public by selling shares on the stock market |
Limit Order | an order to buy or sell a stock at or below a specific price |
Liquidity | measures how quickly and easily a stock can be bought or sold |
Margin | refers to investing in stock on borrowed money |
Mutual Fund | pools of investments from shareholders to buy securities together |
NASDAQ | National Associaction of Securites Dealers Automated Quotations, 2nd largest stock exchange after NYSE (also an index of 3,300 companies traded on the NASDAQ) |
P/E Ratio | price-earnings ratio, the ratio of a company's share price to the company's earnings per share |
Sector | a group of companies with similar business products, services, or characteristics. The stock market is |
Portfolio | an individual's collection of investments, including stocks, bonds, mutual funds & other financial assets. |
Volume | measure of how much a certain stock or other investment has been traded over a certain period of time |
Yield | the income earned on an investment over a set period of time, expressed as a percentage of your original investment |
52-week range | The 52-week range is a technical indicator that measures the lowest and highest price of a stock traded during a 52-week period |
S&P 500 | a stock market index tracking the stock performance of 500 of the largest companies listed on stock exchanges in the United States |