Crystal Academy | Trading Vocab

Bid

The price at which buyers are willing to pay for a stock or an option contract.

Ask

The price at which sellers are willing to be paid or sell a stock or an option contract.

Spread

The difference in value between the Bid and the Ask.

Long

A bullish position in which you think the stock will rise or the value of the option premium will increase.

Short

A bearish position in which you think the stock will fall or the value of the option premium will decrease.

Equity

Ownership of stock.

Options

Contracts that allow you to buy or sell shares of an underlying security at a specified price in the future.

Call Option

Bullish contracts that you buy if you think the value of the underlying security or stock is going to rise within the specified time frame.

Put Option

Bearish contracts that you buy if you think the value of the underlying security or stock is going to fall within the specified time frame.

The Greeks

Refer to how an option contract is priced and how the value or the premium of the option contract will be affected based on future stock movement.

Delta

Measures the expected movement in the value of the option premium per $1 move in the value of the underlying security.

Theta

A Greek value that measures the rate of decline in the value of an option due to the passage of time.

Strike Price

The price at which the underlying security or stock should move toward as indicated by the option contract you select.

Expiration Date

The date in which your option contract expires.

Implied Volatility

A mechanism within an option contract that influences the value of the contract and indicates the expected move in the underlying security over a period of time.

Scalping

A trading strategy that involves rapid buying and selling of shares or option contracts within a very small time frame, typically less than an hour.

Margin Account

An account that allows you to trade on leverage, requiring a minimum balance of $25,000 to trade unlimited.

Cash Account

An account that allows you to trade using only the cash/funds available at the time of purchase or sale.

Volatility

The term that refers to the movement of a stock or the market, with higher volatility indicating greater price range and difference.

Volume

A term that refers to the number of shares or option contracts that have been exchanged between buyer's and seller's over a specified period of time.

Price Action

A broad term that refers to supply and demand and the exchange between buyers and sellers.

Confluence

a term used for when you combine more than one trading technique or analysis to increase your odds of a winning trade.

Technical Analysis

the practice of using charts and data provided by charts to predict stock movement and market trends.

Supply Zone

a price area where traders tend to sell their assets.

Demand Zone

a price area in the stock where there is a high demand for the stock and buyers are ready to purchase at different levels.

Support

a level at which demand is strong enough to stop the stock from falling any further.

Resistance

a level or price zone above the current market that contains the upside movement of an asset.

Moving Average

a widely used technical indicator that smooths out price trends by filtering out the noise from random short-term price fluctuations.

Trendline

lines that traders draw on their chart to connect higher lows or lower highs within a trend

Candlestick

a visual representation of buying and selling that displays the high, low, open, and closing prices of a security for a specific period.

Bounce

when price falls to a specific level on the chart and price quickly rises afterward

Rejection

when price hits a certain level and then sellers step in and push prices lower

High of Day

the highest point price has gone to for that specific day.

Low of Day

the lowest point price has gone to for that specific day.

Break and Hold

when a candlestick closes above or below a certain level

ATH

All time highs - refers to the highest point a stock has reached in all it's time of existence

PMH

Pre-market highs - refers to the highest point reached within pre-market

PML

Pre-market lows - refers to the lowest point reached within pre-market