Stock Market

Stock Market

A marketplace where buyers and sellers trade ownership shares of companies to raise capital and generate returns

Primary Market

The market where new securities are issued for the first time and sold directly to investors

Secondary Market

The market where previously issued securities are traded among investors without involving the issuing company

Initial Public Offering

The first sale of company shares to the public used to raise capital and establish market valuation

Underwriter

A financial institution that helps a company issue new securities and sets offering price

Exchange

A regulated platform where securities are bought and sold under standardized rules

Over The Counter Market

A decentralized market where securities trade directly between parties without a formal exchange

Bid Price

The highest price a buyer is willing to pay for a security at a given moment

Ask Price

The lowest price a seller is willing to accept for a security at a given moment

Bid Ask Spread

The difference between the bid and ask prices representing transaction cost and liquidity level

Market Order

An order to buy or sell a security immediately at the best available price

Limit Order

An order to buy or sell a security only at a specified price or better

Stop Order

An order that becomes active once a trigger price is reached to limit loss or protect gains

Stop Limit Order

An order that becomes a limit order once a trigger price is reached providing price control

Day Order

An order that expires if not executed by the end of the trading day

Good Till Canceled Order

An order that remains active until executed or manually canceled

Fill Or Kill Order

An order that must be executed immediately in full or canceled

Partial Fill

A situation where only part of an order is executed due to limited liquidity

Market Maker

A firm that provides liquidity by continuously quoting buy and sell prices for securities

Liquidity

The ability to buy or sell a security quickly at a price close to its fair value

Volume

The total number of shares traded during a specific period indicating market activity

Volatility

The degree of price fluctuation in a security or market over time

Market Capitalization

The total value of a company shares calculated by multiplying share price by shares outstanding

Large Cap Stock

A stock issued by a company with a high market capitalization and stable performance

Mid Cap Stock

A stock issued by a company with moderate market capitalization and growth potential

Small Cap Stock

A stock issued by a company with low market capitalization and higher risk

Blue Chip Stock

A stock issued by a large stable company with a long record of reliable performance

Growth Stock

A stock expected to deliver above average earnings growth relative to the market

Value Stock

A stock considered undervalued based on fundamentals relative to its market price

Income Stock

A stock that provides consistent dividend payments to investors

Cyclical Stock

A stock whose performance is strongly influenced by economic cycles

Defensive Stock

A stock that remains stable during economic downturns due to consistent demand

Penny Stock

A low priced high risk stock with limited liquidity and high volatility

Dividend

A distribution of company earnings paid to shareholders as income

Dividend Yield

The ratio of annual dividends to share price indicating income return

Ex Dividend Date

The date after which new buyers are not entitled to the next dividend payment

Record Date

The date when shareholders must be on record to receive a dividend

Declaration Date

The date when a company announces a dividend and payment details

Payment Date

The date when dividend funds are distributed to shareholders

Stock Split

An action that increases the number of shares while reducing share price without changing total value

Reverse Stock Split

An action that reduces the number of shares while increasing share price to meet listing requirements

Share Buyback

A company purchase of its own shares to reduce supply and increase shareholder value

Bull Market

A market characterized by rising prices strong investor confidence and economic expansion

Bear Market

A market characterized by falling prices weak investor confidence and economic contraction

Pig Market

A term describing investors who take excessive risk driven by greed and lack of discipline

Market Sentiment

The overall attitude of investors toward a market or asset based on expectations and emotions

Index

A statistical measure that tracks the performance of a group of securities

Benchmark

A standard used to compare the performance of a security or portfolio

Price Weighted Index

An index where higher priced stocks have greater influence on index movement

Market Weighted Index

An index where larger companies have greater influence based on market capitalization

Equal Weighted Index

An index where each stock has the same influence regardless of size

Dow Jones Industrial Average

A price weighted index of major companies used to gauge market performance

S and P Five Hundred

A market weighted index of large companies used as a benchmark for US equity performance

Nasdaq Composite

An index heavily weighted toward technology companies and growth oriented firms

Russell Two Thousand

An index that tracks small cap companies and measures performance of smaller firms

Trading Session

The period during which an exchange is open for buying and selling securities

Pre Market Trading

Trading that occurs before the official market session begins

After Hours Trading

Trading that occurs after the official market session ends

Circuit Breaker

A mechanism that halts trading when prices move too sharply to maintain market stability

Short Selling

The practice of selling borrowed shares with the intention of buying them back at a lower price

Short Squeeze

A rapid price increase that forces short sellers to buy shares to cover positions

Margin

Borrowed money used to purchase securities with the securities serving as collateral

Margin Call

A demand for additional funds when account equity falls below required levels

Leverage

The use of borrowed funds to increase investment exposure and potential returns

Float

The number of shares available for public trading excluding restricted shares

Outstanding Shares

The total number of shares issued by a company including restricted and publicly traded shares

Insider Trading

The illegal use of nonpublic information to buy or sell securities for personal gain

Market Manipulation

Actions intended to deceive investors or distort market prices

Pump And Dump

A scheme where promoters inflate a stock price before selling their shares at a profit

Spoofing

A manipulation tactic where traders place fake orders to influence prices then cancel them

Arbitrage

The practice of profiting from price differences between markets or securities

High Frequency Trading

A strategy that uses algorithms to execute trades at extremely high speeds

Order Book

A list of buy and sell orders for a security organized by price level

Level Two Data

Detailed market data showing bid and ask prices from multiple market makers

Price Discovery

The process through which market participants determine the fair value of a security

Efficient Market

A market where prices reflect all available information at any given time

Market Depth

The volume of buy and sell orders at various price levels indicating liquidity strength

Support Level

A price level where buying interest tends to prevent further decline

Resistance Level

A price level where selling interest tends to prevent further rise

Breakout

A price movement above resistance or below support indicating potential trend continuation

Correction

A short term decline in market prices following a period of gains

Crash

A sudden and severe drop in market prices caused by panic or economic shock

Rebound

A recovery in market prices after a sharp decline

Volatility Index

A measure of expected market volatility based on options pricing

Sentiment Indicator

A tool that measures investor optimism or pessimism toward the market

Breadth Indicator

A measure of how many stocks are rising or falling to assess market strength

Market Cycle

A recurring pattern of expansion peak contraction and recovery in financial markets

Economic Cycle

A pattern of growth and decline in the economy that influences market performance

Sector Rotation

The movement of investment capital between sectors based on economic conditions

Trading Volume Spike

A sudden increase in trading activity that signals strong interest or news impact

Price Gap

A jump in price between trading sessions caused by news or market imbalance

Liquidity Provider

A participant that ensures continuous trading by offering buy and sell quotes

Dark Pool

A private trading venue where large orders are executed without public visibility

Block Trade

A large transaction executed privately to avoid disrupting market prices

Market Efficiency Level

A classification of how quickly and accurately prices reflect information

Order Execution

The process of completing a buy or sell order in the market

Settlement Cycle

The time required to finalize a trade and transfer ownership