S&P 500   4,298.86
DOW   33,876.78
QQQ   354.50
3 EV Stocks You Need To Have On Your Watchlist
"Unknown laser company making HUGE profit from Russia-Ukraine War" (Ad)
Will NIO Partake In China's Economic Awakening?
BJ's Restaurants' Approaching Buy Point As Earnings Surge 150%
66,000% upside on tiny biotech? (Ad)
Cactus Opens The Cash Flow Wellhead With Flexsteel Acquisition 
Tax Software Specialist Vertex In Buy Zone After Base Breakout
Trade Smarter: Discover Hidden Opportunities w/ A.I. (Ad)
How to Choose a Brokerage Account or Online Broker
Will Plug Power’s Deal With Energy Vault Move The Needle? 
S&P 500   4,298.86
DOW   33,876.78
QQQ   354.50
3 EV Stocks You Need To Have On Your Watchlist
"Unknown laser company making HUGE profit from Russia-Ukraine War" (Ad)
Will NIO Partake In China's Economic Awakening?
BJ's Restaurants' Approaching Buy Point As Earnings Surge 150%
66,000% upside on tiny biotech? (Ad)
Cactus Opens The Cash Flow Wellhead With Flexsteel Acquisition 
Tax Software Specialist Vertex In Buy Zone After Base Breakout
Trade Smarter: Discover Hidden Opportunities w/ A.I. (Ad)
How to Choose a Brokerage Account or Online Broker
Will Plug Power’s Deal With Energy Vault Move The Needle? 
S&P 500   4,298.86
DOW   33,876.78
QQQ   354.50
3 EV Stocks You Need To Have On Your Watchlist
"Unknown laser company making HUGE profit from Russia-Ukraine War" (Ad)
Will NIO Partake In China's Economic Awakening?
BJ's Restaurants' Approaching Buy Point As Earnings Surge 150%
66,000% upside on tiny biotech? (Ad)
Cactus Opens The Cash Flow Wellhead With Flexsteel Acquisition 
Tax Software Specialist Vertex In Buy Zone After Base Breakout
Trade Smarter: Discover Hidden Opportunities w/ A.I. (Ad)
How to Choose a Brokerage Account or Online Broker
Will Plug Power’s Deal With Energy Vault Move The Needle? 
S&P 500   4,298.86
DOW   33,876.78
QQQ   354.50
3 EV Stocks You Need To Have On Your Watchlist
"Unknown laser company making HUGE profit from Russia-Ukraine War" (Ad)
Will NIO Partake In China's Economic Awakening?
BJ's Restaurants' Approaching Buy Point As Earnings Surge 150%
66,000% upside on tiny biotech? (Ad)
Cactus Opens The Cash Flow Wellhead With Flexsteel Acquisition 
Tax Software Specialist Vertex In Buy Zone After Base Breakout
Trade Smarter: Discover Hidden Opportunities w/ A.I. (Ad)
How to Choose a Brokerage Account or Online Broker
Will Plug Power’s Deal With Energy Vault Move The Needle? 

Stock Market Terms

MarketBeat is providing this page as a way for investors to become familiar with basic investing terms. Terms are listed in alphabetical order to make the list easily searchable.

12b-1 Fees

A 12b-1 fee is a fee charged by a mutual fund that covers the marketing and distribution costs of the fund as well as some service fees. Read more on 12b-1 Fees
Profitably Trade Stocks at 52-Week Highs

52-week Highs

A 52 week high is the highest price that a stock has traded at in the last year. Many investors use 52 week highs as a factor in determining a stock's current value and as a predictor of future price movements. Read more on 52-week Highs
Profitably Trade Stocks at 52-Week Lows

52-week Lows

By using the 52 week low indicator, you can determine which stocks might be underpriced and are likely to increase in value. Strong financial gains are well within your reach, even if the market is not moving in a bullish direction. Though this indicator alone will require additional analysis in order to be truly effective, it is certainly one of the most useful—and accessible—indicators currently in use. Read more on 52-week Lows


Accumulation/distribution looks at the proximity of a closing price to its high and low price to determine if more traders are buying (accumulating) or selling a particular security. Read more on Accumulation/Distribution

After-Hours Trading

After-hours trading is buying and selling of stocks that takes place after normal trading hours. Trading occurs through an electronic market between 4:05 p.m. and 8:00 p.m. Read more on After-Hours Trading
Stock Ratings and Recommendations: Understanding Analyst Ratings

Analyst Ratings

Analyst ratings or stock ratings, such as “Buy”, “Sell”, and “Hold” are an evaluation of a stock's expected performance and/or it's risk level as determined by a rating agency or brokerage firm Read more on Analyst Ratings

Analyst Ratings Trading

The traditional ratings an analyst uses are “buy”, “sell”, and “hold” although they may use additional categories such as “underperform” and “outperform” to show a broader spectrum of potential outcomes to investors. Read more on Analyst Ratings Trading


Arbitrage is a trading strategy in which there is an attempt to profit from momentary price differences that can develop when a security or commodity trades on two different exchanges. Read more on Arbitrage

Asset Allocation

Asset allocation is an investment strategy that purposes to balance risk versus reward by adjusting the percentage of each asset Read more on Asset Allocation
Why Average Daily Trading Volume Matters to Every Investor

Average Daily Trade Volume - ADTV

Average daily trading volume (ADTV) is a calculation that identifies the number of individual securities traded over a specified amount of time, divided by the number of days in that time period. Read more on Average Daily Trade Volume - ADTV

Backdoor Roth IRA

A backdoor Roth IRA is not a financial product, but rather a strategy that high-income earners can use to put retirement savings into a Roth IRA Read more on Backdoor Roth IRA

Back-End Load

A back-end load is a sales charge (or commission) that an investor pays when they sell shares in a mutual fund. Read more on Back-End Load

Balance Sheet

A company’s balance sheet gives an accounting of what a company owns (its assets), what it owes (its liabilities), and the amount of capital that the company receives from its shareholders. Read more on Balance Sheet

Balanced Fund

A balanced fund is a kind of mutual fund that has a mix of both equities (such as stocks or commodities) and bonds. Read more on Balanced Fund

Bar Chart

For investors, a bar chart is a price evaluation tool that serves as a visual representation of the price of a security over a period of time. Read more on Bar Chart
What is basic economics?

Basic Economics

Basic economics is the study of how societies allocate a limited amount of resources which can have alternative uses. Read more on Basic Economics

Bear Market

A bear market is defined as a market that declines by 20% or more over at least a two-month timeframe. Read more on Bear Market
What is a Bear Trap

Bear Trap

This article defines what a bear trap is and explains how the practice of short selling can amplify a bear trap and compares it to a bull trap Read more on Bear Trap

Beige Book

The Beige Book is a leading economic indicator of the United States economy and is published eight times a year. Read more on Beige Book


Beta is the result of a calculation that measures the relative volatility of a stock in correlation to a particular standard. Read more on Beta

Bid-Ask Spread

The bid-ask spread is a tool that market makers at financial institutions use to facilitate buying and selling in a way that facilitates orderly trading. Read more on Bid-Ask Spread
What’s a Black Swan?

Black Swan

With the rapid worldwide spread of COVID-19 making hourly headlines, the term black swan is becoming a recurring theme. Black swan is used to describe an extremely rare and unpredictable event Read more on Black Swan


Blockchain is a decentralized record-keeping technology that provides accurate and secure data storage on a digital ledger. Read more on Blockchain

Bollinger Bands

Bollinger bands are a technical analysis tool that clarifies the price action of a security by showing its volatility through the expansion or contraction of the bands over a period of time. Read more on Bollinger Bands


A bond is a type of fixed-income security that can be thought of like a credit instrument by the issuing party. Read more on Bond

Book Value Per Share – BVPS

Book value per share (BVPS) is a ratio used to compare a firm's common shareholder's equity to the number of shares outstanding. Read more on Book Value Per Share – BVPS
Understanding and Trading Breakout Stocks

Breakout Stocks

Trading breakout stocks is popular.To identify potential breakout stocks it’s important to understand the concepts of support and resistance Read more on Breakout Stocks

Bull Market

A bull market occurs when a particular asset class is rising in value. This encourages buying, which then causes the asset class to continue to rise. Read more on Bull Market
What is a Bull Trap

Bull Trap

This article defines what a bull trap is and the role of fundamental analysis in causing investors to fall prey to this false signal. It also provides strategies that can help you avoid falling into a bull trap Read more on Bull Trap

Buy Rating

In the case of a buy rating, an analyst is indicating that the price of an asset is likely to move higher over a period of time. Read more on Buy Rating
Are Stock Buybacks Good for the Average Investor?


In a stock buyback, or share repurchase program, a company repurchases their shares in the marketplace Read more on Buyback

Buy-Side Analysts

A buy-side analyst performs equity research for institutional investors that work for firms such as hedge funds, pension funds or mutual funds. Read more on Buy-Side Analysts

What is the CAC 40 Index?

CAC 40 Index

The CAC 40 is a market-cap weighted index of 40 of the 100 companies with the highest market cap on the Euronext, similar tp the Dow Jones Industrial Average. Read more on CAC 40 Index

Call Option

The owner of the call option, an investor is buying the right, but not the obligation, to purchase a specific number of shares of a company’s stock at an agreed upon price. Read more on Call Option
Why Understanding Call Option Volume is Essential to Successful Options Trading

Call Option Volume

Volume is the amount of buying and selling that is being done by a security. Equities, such as stocks along with futures, currencies and other investments all measure trading volume. Read more on Call Option Volume


A candlestick is a technical indicator that shows traders the opening and closing price of a stock for a specific period. Read more on Candlestick

Capital Gains

A capital gain is an increase in value between the price an asset (such as real estate or stocks) is sold for and the price that an investor paid for the asset. Read more on Capital Gains

Capital Gains Distribution

A capital gains distribution is a payment to shareholders of a mutual fund that is the result of a liquidation of either the underlying stocks and securities or the dividend and interest earned by the fund’s holdings. Read more on Capital Gains Distribution

Cash Asset Ratio

The cash asset ratio is a fundamental measurement tool that represents, as a percentage, the amount of highly liquid assets versus the amount of short-term liabilities. Read more on Cash Asset Ratio

Cash Flow

Cash flow is a measurement of how much cash and cash equivalents a company is receiving and how much it is sending out. Read more on Cash Flow

Catch-Up Contributions

Catch-up contributions are deposits that are made above and beyond what is allowed in an employer-sponsored retirement plan. Read more on Catch-Up Contributions

CBOE Russell 2000® Volatility Index

This index is an indicator of the short-term expectation of volatility in the stock market as it relates to option prices for the Russell 2000 Index. Read more on CBOE Russell 2000® Volatility Index

CD Ladder

A CD ladder is an investment strategy in which a fixed amount of money is divided equally among multiple certificates of deposit purchased at varying maturity dates. Read more on CD Ladder

Certificate of Deposit (CD)

A certificate of deposit (CD) is a financial product that allows a financial institution to hold a depositor’s funds until a fixed maturity date Read more on Certificate of Deposit (CD)

Channel Trading

Channel trading is a trading strategy that relies on technical analysis based on defined trading channels created by price movement patterns. Read more on Channel Trading
Stock Market - What is a circuit breaker?

Circuit Breakers

Circuit breakers are a security measure that has been put in place by the Securities & Exchange Commission (SEC) as an effort to reduce panic-selling on U.S. stock exchanges. Read more on Circuit Breakers

Closed-End Mutual Funds

Closed-end mutual funds (CEFs) are a special type of mutual fund, an investment structure, with shares traded in the open market, like stocks or ETFs Read more on Closed-End Mutual Funds
What are Commodities and are they Safe Investments?


Commodities are raw materials that are used every day by millions, if not billions of consumers. Commodities are priced based on supply and demand. Read more on Commodities

Compound Annual Growth Rate (CAGR)

The compound annual growth rate is a value that represents the arithmetic mean of an investment’s annual growth rate over a specified period of time. Read more on Compound Annual Growth Rate (CAGR)

Compound Interest

Compound interest is calculated on an additional principal balance that includes the interest on all the interest that has accumulated Read more on Compound Interest

Conference Calls

A conference call is an event that allows companies to provide information to any interested party. This includes institutional investors (such as the large investment banks and stock analysts) but is also available to individual investors. Read more on Conference Calls

Consumer Price Index (CPI)

The consumer price index examines the average cost of a select group of consumer goods and services that range from food and beverages to smartphones and medical care. Read more on Consumer Price Index (CPI)

Convertible Shares

Convertible shares are a class of a company’s preferred shares. Like common shares, convertible shares give shareholders an ownership stake in the company Read more on Convertible Shares


In investing terms, a correction is defined as a statistical event where the price of a security or asset class experiences a decline of at least 10% (although it could be more) from its most recent peak. Read more on Correction
What is Cost Basis

Cost Basis

As part of every investor’s due diligence, they should pay attention to the cost basis of every security they purchase. Read more on Cost Basis

Cost of Capital

The cost of capital is the amount of money needed to make a capital budgeting project worthwhile. Read more on Cost of Capital

Cost of Debt

In its simplest form, cost of debt is the effective interest rate that a company will pay on all of its debt obligations. The cost of debt is expressed as a percentage. Read more on Cost of Debt

Cost of Equity

The cost of equity is the expected return that they will get in exchange for their investment in a business in the form of buying shares Read more on Cost of Equity

Cost of Goods Sold (COGS)

Cost of goods sold (COGS) is essentially how much it costs a business to make a sale. This is why COGS is also referred to as the cost of sales. Read more on Cost of Goods Sold (COGS)

Coverage Ratio

The coverage ratio is actually a series of ratios that are used by investors to determine a company’s ability to meet their financial obligations. Read more on Coverage Ratio


Cryptocurrency is a digital currency that exists as a series of coded transactions on a blockchain (or digital ledger). Read more on Cryptocurrencies

Current Ratio

The current ratio (also known as the working capital ratio) is a tool that allows investors to assess the liquidity of a company. Read more on Current Ratio
Cyclical Stocks - What You Should Know

Cyclical Stocks

Cyclical stocks are stocks of those companies that move with a high correlation to the broader economy. Read more on Cyclical Stocks

Day Trading

Day trading is the practice of buying and selling securities within a single day and frequently enter and exit trades within several hours, or even minutes. Read more on Day Trading

Dead Cat Bounce

A dead cat bounce is an event that takes place as part of a prolonged price downtrend. After a gap where the price of an asset falls significantly from its previous high, the price may appear to recover or signify a trend reversal. Read more on Dead Cat Bounce

Death Cross

The death cross is a technical chart pattern that indicates an asset has the potential to be exposed to major selling pressure. Read more on Death Cross

Debt-To-Equity Ratio

A company’s debt-to-equity ratio is a performance metric that measures a company’s level of debt in relation to the overall value of their stock Read more on Debt-To-Equity Ratio


Depreciation is an accounting practice that allows a company to record, as an expense, only a portion of an asset’s cost over the period of that asset’s useful life. Read more on Depreciation


A derivative is a contractual agreement between two parties. The value of the derivative is determined by the value of an underlying asset such as stocks, bonds, commodities (oil, wheat, soybeans, etc.) or precious metals (gold, silver, etc.) Read more on Derivative

Diluted Earnings Per Share

Diluted earnings per share is a metric that helps analysts and investors estimate the quality of a company’s basic earnings per share (EPS). Read more on Diluted Earnings Per Share

Discount Rate

The most common definition is when referring to the interest rate the Federal Reserve Banks charge to financial institutions who borrow money Read more on Discount Rate
Understanding Disruptive Technology and How to Invest In It

Disruptive Technology

In this article, we’ll identify examples of disruptive technology and give investors some key takeaways that can help them decide whether a disruptive technology has staying power Read more on Disruptive Technology


Diversification in investing is the method of allocating capital that reduces the exposure to any one particular asset or risk. Read more on Diversification
Why Special Dividends Can be a Delightful Surprise for Income Investors

Dividend Achievers

Dividend achievers are a group of companies that have increased their dividend payout for 10 consecutive years. Dividend achievers fall into a special category of companies that make issuing, and growing, dividend payments a priority. Read more on Dividend Achievers
How to Build Wealth with the Dividend Aristocrat Index

Dividend Aristocrat Index

The dividend aristocrat index is a group of blue-chip S&P 500 companies that have a documented history of delivering increased dividends for at least 25 consecutive years. Read more on Dividend Aristocrat Index
How to Capture the Benefits of Dividend Increases

dividend increases

Increasing dividends can help you grow your portfolio. Learn more about how to capture the benefits of dividend increases on MarketBeat. Read more on dividend increases
The Dividend Kings With Highest Yield

Dividend Kings

Dividend Kings are companies who have increased their dividend payout for at least 50 consecutive years, but it is one tracked by a large portion of the market Read more on Dividend Kings
What is a dividend reinvestment plan?

Dividend Reinvestment Plan (DRIP)

A dividend reinvestment plan (DRIP) is a program that gives investors the opportunity to reinvest their cash dividends. Read more on Dividend Reinvestment Plan (DRIP)
What Makes a Stock a Good Dividend Stock?

Dividend Stocks

Dividend stocks provide investors with a regular source of income that they can either receive as income or they can reinvest to increase their position. Read more on Dividend Stocks
Investing in Dividend Stocks

Dividend Stocks

Dividend investing focuses either on collecting high dividend yield stocks or stocks with fast-growing dividends. Dividend stocks are stocks issued by companies who redistribute a portion of their profits to their shareholders on a regular basis. Read more on Dividend Stocks

Dividend Yield

A dividend yield (also called the dividend-price ratio) is simply a company’s dividend expressed as a percentage of its stock price. Read more on Dividend Yield
What Is Dividend Yield and How Do You Calculate It?

Dividend Yield Calculator

Dividend yield is a calculation of the amount (in dollars) of a company’s current annual dividend per share divided by its current stock price: Read more on Dividend Yield Calculator
How Can Investors Use the Dogs of the Dow Strategy?

Dogs of the Dow

The Dogs of the Dow is a dividend investing strategy that has a goal of beating the Dow Jones Industrial Average (DJIA) on an annual basis Read more on Dogs of the Dow

Dollar Cost Averaging

Dollar cost averaging is an investment strategy where an investor buys a fixed dollar amount of a security at regular intervals regardless of the price. Read more on Dollar Cost Averaging
Dual Listing What You Need to Know

Dual Listing

A dual listing occurs when a publicly-traded company decides to list its publicly traded shares on more than one global stock exchange. Read more on Dual Listing

Earnings Per Share

Earnings per share (EPS) is an investment metric determines a company's profit divided by its number of common outstanding shares. Read more on Earnings Per Share
What are stock market earnings reports?

Earnings Reports

Earnings reports are part of the legal requirements that publicly held companies follow when disclosing their company performance. These reports are issued quarterly during what investors call the “earnings season”. Read more on Earnings Reports
What is an Earnings Surprise?

Earnings Surprise

What is an earnings surprise? An earnings surprise means that a company reports figures completely different from analyst estimates. Learn more. Read more on Earnings Surprise
What is EBITDA and Why Does it Matter?


EBITDA is one of the most important terms to understand when analyzing if a stock is a good buy. This article provides a brief explanation of the term EBITDA including why it matters to investors Read more on EBITDA

Economic Bubble

An economic bubble is a condition caused when an asset rises in value based on investor sentiment that is not supported by fundamental or technical analysis of the stock. Read more on Economic Bubble
The Role Economic Reports Play in a Successful Investment Strategy

Economic Reports

Economic reports contain data about various sectors of the U.S. and global economy. These reports are published on a set schedule by different departments of the Federal Government. Read more on Economic Reports

Elliott Wave Theory

Elliott Wave Theory is a market forecasting tool that was developed in the 1930s by Ralph Nelson Elliott. Read more on Elliott Wave Theory

Equal Weight Rating

When an analyst gives an equal weight rating, they are expecting a stock’s performance to be in line with the average return of the other stocks that the analysts cover. Read more on Equal Weight Rating

Equity Income

Equity income is primarily referred to as income that is generated from stock dividends, a portion of a company’s earnings that is paid back to shareholders Read more on Equity Income
 Environmental, Social, and Governance (ESG) Investing

ESG Score

A company’s environmental, social, and governance (ESG) score is a key component used by some investors and fund managers. Read more on ESG Score
What is the Euro STOXX 50 Index?

Euro STOXX 50 Index

The Euro STOXX 50 Index is a market-weighted index of the 50 largest companies in the 11 Eurozone countries (Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal, and Spain. Read more on Euro STOXX 50 Index
EV Stocks and How to Profit from Them

EV Stocks

The EV market is no longer a niche market. What was once a side gig and nod to the green movement is becoming a revolution and double-digit growth opportunity Read more on EV Stocks

FAANG Stocks

FAANG is an acronym for five individual companies: Facebook, Amazon, Apple, Netflix, and Google (now Alphabet). Read more on FAANG Stocks

Federal Reserve

The Federal Reserve is the central bank of the United States of America. The Federal Reserve (The Fed) plays an important role in formulating and guiding our nation’s monetary policy. Read more on Federal Reserve

Fibonacci Channel

A Fibonacci channel is a technical indicator of price movement. Lines that form inside a Fibonacci channel estimate likely areas of support and resistance. Read more on Fibonacci Channel


A fiduciary is someone who has a legal responsibility to put your needs above their own. A broker or financial planner working under a fiduciary standard is ethically bound to act in his or her client’s best interests. Read more on Fiduciary
What is FinTech?


Cheaper. Better. Faster. We hear those words so often they become a cliché. But in the world of financial technology (or FinTech), Read more on FinTech


Float refers to the number of shares that a company issues that are available for trading on secondary markets without restriction. Read more on Float
What is Forex: A Practical Guide on How to Trade Forex for Retail Investors


Forex (FX) is an abbreviation for the foreign exchange market. The forex market is the largest in the world and has the highest liquidity. Read more on Forex

Front-End Load

A front-end load is a sales charge that an investor pays at the time they purchase shares in a mutual fund. Read more on Front-End Load
What is the FTSE 100 index?

FTSE 100 Index

The FTSE 100 is the United Kingdom’s (UK) equivalent to the S&P 500. It is looked at as a leading indicator of the UK economy. Read more on FTSE 100 Index

Fundamental Analysis

Fundamental analysis, like technical analysis, attempts to predict which stocks are valuable and which are not, through analyzing a number of factors. Read more on Fundamental Analysis

Futures Contract

A futures contract, otherwise known as trading futures involves a buyer and a seller who enter a legally binding contract to trade a specified amount of an asset at a particular date for a specific price. Read more on Futures Contract


The G-20 (an abbreviation for The Group of 20) is a group of finance ministers and central bank governors from 19 countries that serve as the main economic council of nations. Read more on G-20
How Investors Can Identify and Successfully Trade Gap-Down Stocks

Gap Down Stocks

Gap-down stocks are stocks that open at a lower level, often signified by a sharp price move, with no other trading occurring before or after, therefore creating a price gap. Read more on Gap Down Stocks
How Investors Can Identify and Successfully Trade Gap-Up Stocks

Gap Up Stocks

A gap-up stock is one that opens at a higher level, often signified by a sharp move, with no other trading occurring before or after the gap. Read more on Gap Up Stocks
Why the Golden Cross is a Significant Trading Signal

Golden Cross

The golden cross is a technical indicator that can be seen on a candlestick chart when a relatively short-term moving average crosses a long-term moving average. Read more on Golden Cross

Google Finance

Google Finance is a search tab within Google.com that allows investors to track investment and screen stocks according to the relevance of their preferences. Read more on Google Finance

Google Finance Portfolio

Google Finance portfolio allows investors to add an investment portfolio or stock watchlist and track the day-to-day performance of current holdings, and get individual charting. Read more on Google Finance Portfolio

Green Investing

Green investing is an investment strategy that focuses on companies and financial instruments, such as mutual funds, ETFs and bond funds that have as their underlying assets companies or projects committed to the conserving natural resources, producing and discovering alternative energy sources, implementing clean air and water projects. Read more on Green Investing

Gross Domestic Product (GDP)

Gross domestic product is a measurement of the monetary value of all the final goods and services that a country produces within its borders over a specific time period. Read more on Gross Domestic Product (GDP)

Growth and Income Funds

A growth and income fund is either a mutual fund or exchange-traded fund (ETF) that, as the name states, attempts to simultaneously achieve two goals for shareholders. Read more on Growth and Income Funds

Growth Stocks

What is a growth stock? A growth stock should grow at a rate above average growth of the market but may not pay dividends. Learn more about growth stocks. Read more on Growth Stocks
What is the Hang Seng index?  

Hang Seng Index (HSI)

The Hang Seng Index (HSI) is a market capitalization-weighted index that is made up of the 50 largest companies that trade on the Hong Kong stock exchange Read more on Hang Seng Index (HSI)
What is the Significance of a Head and Shoulders Pattern in Technical Analysis?

Head and Shoulders Pattern

A head and shoulders pattern is a well-known technical indicator that identifies the emergence of a bullish-to-bearish trend. This article breaks down the components of the head and shoulders pattern and how to set up a trade based on the indicator Read more on Head and Shoulders Pattern
Hedge Funds - How They Work For Investors

Hedge Funds

Hedge funds use a pool of funds from investors who meet certain criteria in an effort to achieve a positive absolute return for their investors. Read more on Hedge Funds

Hold Rating

Since no security will stay at a constant price, a hold rating is used to indicate a company’s price targets more than to provide a trading signal. Read more on Hold Rating

Holder of Record

A holder of record is the individual or entity that is considered to be the registered owner of a security. Read more on Holder of Record
What is a Hostile Takeover and Can it Ever Be Effective?

Hostile Takeover

In this article, we define a hostile takeover, the tactics that an acquiring company may use, and the tactics that the target company may use to defend itself Read more on Hostile Takeover
What Does a Housing Bubble Mean and How Does it Impact Investors?

Housing Bubble

In this article we’ll explain what a housing bubble means and review the steps retail investors should take to protect and grow their portfolios when the bubble is inflating and deflating. Read more on Housing Bubble
Investing in Blue-Chip Stocks

how to invest in blue chip stocks

Blue-chip stocks offer stability, safety and dividends through companies with well-entrenched businesses. Learn more about how to invest in blue chip stocks. Read more on how to invest in blue chip stocks

Index Funds

An index fund is a type of mutual fund that includes a portfolio of equities designed to match or track a specific market index. Read more on Index Funds


Inflation is a general rise in the cost of goods and services which is offset by a symmetrical decline in the purchasing power of a currency. Read more on Inflation
What is an Initial Coin Offering (ICO)?

Initial Coin Offering (ICO)

An initial coin offering (sometimes called a token offering) is a crowdfunding tool whereby an investor gives a business an existing cryptocurrency (usually Bitcoin or Ethereum) and in some cases traditional fiat currency (i.e. U.S. dollars) in exchange for tokens Read more on Initial Coin Offering (ICO)
What is an Initial Public Offering (IPO)?

Initial Public Offering (IPO)

An Initial Public Offering (IPO) is a formal process in which a previously private company for the first time raises money through the sale of shares to institutional (and on rare occasions) retail investors on a major stock exchange Read more on Initial Public Offering (IPO)
Insider Trading - What You Need to Know

Insider Trading

Insider trading is the action of buying or selling (“trading”) a security based on material information that is not available to the public. Read more on Insider Trading

Institutional Investors

Institutional investors are large firms that buy and sell securities and make other investment decisions, on behalf of individual members or shareholders. Read more on Institutional Investors

Intrinsic Value

In simple terms, intrinsic value helps an investor determine whether a company’s stock is overvalued or undervalued. Determining a stock’s intrinsic value is one way to do this. Read more on Intrinsic Value
What is an inverted yield curve?

Inverted Yield Curve

An inverted yield curve is an indicator of a market condition in which long-term debt instruments (such as 10-year U.S. Treasury Bonds) have a lower yield than short-term debt instruments of the same credit quality (such as 2-year U.S. Treasury Bonds). Read more on Inverted Yield Curve

Leveraged Buyout (LBO)

A leveraged buyout (LBO) is a financial transaction, an acquisition of a company that is financed almost entirely by debt. The concept of a buyer being able to “take over” another entity without putting a lot of their capital at risk is why this is referred to as a “leveraged” buyout. Read more on Leveraged Buyout (LBO)


The London Interbank Offered Rate is the lowest rate that banks charge to lend to each other. Read more on LIBOR
Understanding Limit Orders and How to Use Them

Limit Order

In this article, we’ll review limit orders in detail including the two most common type of limit orders, the benefits and risks of using limit orders, and the purpose of a stop-limit order. Read more on Limit Order


Liquidity is a non-statistical measurement of how easily an asset (cash, securities, collectibles, real estate, etc.) can be bought or sold without affecting the asset’s price. Read more on Liquidity
What is a Lock-Up Period Expiration and Why Should Individual Investors Care?

Lock-Up Period Expiration

A lock-up period (also known as a lock-up agreement) is a period of time (usually between 90-180 days) when investors are not allowed to buy or redeem shares. Read more on Lock-Up Period Expiration

Management Fee

A management fee is a compensation that is charged by an investment manager for their role in managing an investment fund. Read more on Management Fee


Margin in the context of trading is collateral that a trader supplies to a broker in order to trade currencies, commodities, futures, and marginable stocks. Read more on Margin
How to Invest in Marijuana Stocks

Marijuana Stocks

When looking at marijuana stocks, you’re looking for the same fundamentals that you would with any other business including their growth opportunities, the quality of the product, their location and their management team.  Read more on Marijuana Stocks

Market Capitalization

Market capitalization is the market value of a company's outstanding shares and is used by the investment community in ranking the size of companies, as opposed to sales or total asset figures. Read more on Market Capitalization
Using Market Indexes For Investing

Market Indexes

A market index is a theoretical portfolio of investment holdings that represent a particular segment of the financial market. Read more on Market Indexes

Market Perform

The market perform rating is given by a stock analyst to suggest a neutral outlook for a stock’s performance when compared to a benchmark index such as the S&P 500 or the Dow Jones Industrial Average (DJIA). Read more on Market Perform

Market Timing

Market timing is an investing and trading strategy that involves shifting the assets inside a portfolio to take advantage of pricing inequities within different asset classes. Read more on Market Timing

Momentum Indicators

Momentum indicators are technical indicators that help traders confirm the quality of a buy signal or sell signal. Read more on Momentum Indicators

Momentum Investing

Momentum investing is a trading strategy that requires investors to identify chart patterns for indications of stocks that are riding a trend. Read more on Momentum Investing
Pros And Cons Of Monthly Dividend Stocks

Monthly Dividend Stocks

Investors who want income and reasonable growth are attracted to dividend stocks. Companies that issue dividends are generally not growth stocks Read more on Monthly Dividend Stocks
Most Active Stocks: Dollar Volume vs Share Volume

Most Active Stocks

The list of most active stocks can be a useful guide for investors. It is sometimes called a road map for day traders. Read more on Most Active Stocks

Moving Average (MA)

A moving average is a lagging indicator that is intended to give investors a view of where a security is trending without the outlying moves in price Read more on Moving Average (MA)

Moving Average Convergence Divergence (MACD)

The moving average convergence divergence (MACD) oscillator is a technical analysis tool that is an indicator of momentum that provides traders with a visual indicator of buying and selling trends. Read more on Moving Average Convergence Divergence (MACD)
How interest rates affect municipal bond prices

Municipal Bonds

Municipal bonds are government-issued debt securities used to fund day-to-day operations or to fund large-scale capital projects. Learn more about munis. Read more on Municipal Bonds

Mutual Funds

Every mutual fund is a company that combines money from multiple investors and invests those funds into securities that are dictated by the fund’s prospectus. Read more on Mutual Funds


The Nasdaq Stock Market or NASDAQ. is an American stock exchange. It is the second-largest exchange in the world by market capitalization, Read more on NASDAQ

Net Asset Value

Net asset value is the value of a fund’s assets minus its liabilities (i.e. net assets) relative to their outstanding shares. Read more on Net Asset Value

Net Income

Net income is the measurement of whether or not a company is making money and, if so, how much profit they are retaining. Read more on Net Income

Net Margin

Net margin (also known as net profit margin) is the amount of revenues that remains as profit after a given period of time. Read more on Net Margin

Neutral Rating

When an analyst rates a stock as neutral they do so with the expectation that the stock is going to trade in a tight range. Read more on Neutral Rating
Market News Sentiment in Investing

News Sentiment

News sentiment is one component of market sentiment and can be bullish or bearish. Keeping track of breaking news, and what that news may mean for a stock, Read more on News Sentiment
What is the Nikkei 225 index?    

Nikkei 225 Index

The Nikkei index is a price-weighted (as opposed to market-cap-weighted index) that tracks the performance of Japan’s top 225 blue-chip companies. Read more on Nikkei 225 Index

No Load Funds

The standard load for most funds is somewhere between 4% and 6%. A no-load fund, by contrast, does not charge a sales fee for transactions. Read more on No Load Funds
Non-Fungible Token (NFT) Explained

Non-Fungible Token (NFT)

We’ll attempt to explain what an NFT is, when it originated, and how to purchase one. We’ll also wade into the debate about whether NFTs are collectibles or something more and present the opinions of NFT advocates and critics. Read more on Non-Fungible Token (NFT)

Operating Income

Operating income is the amount of profit a business realizes from its operations after deducting operating expenses. Read more on Operating Income

Options Trading

Options trading is the sale of a contract between a buyer and a seller in which the buyer of the contract is purchasing the right, but not the obligation, to buy or sell a quantity of a security at a specified price on or before a specified date. Read more on Options Trading
What Investors Need to Understand About Order Imbalance

Order Imbalance

This article defines how order imbalances impact stock trades including the immutable role of supply and demand and why the concept of liquidity is so important. Read more on Order Imbalance

Outperform Rating

When an analyst gives a stock an outperform rating, it is an indication that the analyst expects the stock to beat the market or market index for that stock Read more on Outperform Rating

Outstanding Shares

Outstanding shares are all the shares of a corporation or financial asset that have been authorized, issued and purchased by investors and are held by them. They have rights and represent ownership in the corporation by the person who holds the shares. Read more on Outstanding Shares


When a security is said to be overbought it is said to be trading above its intrinsic value. Read more on Overbought


An asset is considered to be oversold when it is trading at a price that is lower than its perceived intrinsic value. Read more on Oversold
What Does An Overweight Rating Mean?


We’ll take a closer look at the overweight rating. In addition to defining what the rating means and where it fits on the spectrum of ratings, we’ll go over why it has advantages as well as limitations, we’ll look at why an analyst may issue an overweight rating and review the other meanings that the term overweight has for investors.  Read more on Overweight
What is the price-to-earnings growth (PEG) ratio?

P/E Growth (PEG)

The P/E growth ratio (or PEG) was developed and is used as a refinement of the standard P/E ratio that is used in fundamental analysis. Read more on P/E Growth (PEG)
Pattern Day Trader - What is the PDT Rule?

Pattern Day Trader

One of the most common rules that throw new traders off is the PDT rule, also known as the Pattern Day Trader rule Read more on Pattern Day Trader
Biggest Stock Losers - Today’s Biggest Percentage Decliners

Percentage Decliners

Trading percentage decliners fit the traditional notion of buying low and selling high because of the theory that most stocks—similar to weather patterns and life events—will seek to find a stable state. That’s why buying stocks that show the biggest declines are often the ones with the biggest upside potential. Read more on Percentage Decliners
What Percentage Gainers Tell Investors and Why They Don’t Tell the Whole Story

Percentage Gainers

Percentage gainers are the stocks that are up the most in terms of their percent change. Percentage gainers do not take into account trading volume. Read more on Percentage Gainers

Portfolio Manager

A portfolio manager is a financial professional or group of professionals who are responsible for purchasing and selling assets in a mutual fund, closed-end fund or exchange-traded fund (ETF). Read more on Portfolio Manager

Preferred Stock

Preferred stock is a class of stock that has a higher (or preferred) claim to the assets and earnings of a corporation than owners of common stock. Read more on Preferred Stock

Price Target

A price target is an investment analyst’s or adviser’s estimate of the future price level of an asset, such as a stock, futures contract, commodity or exchange-traded fund (ETF). Read more on Price Target
What the Price to Earnings (P/E) Ratio Tells Investors and Why That Matters

Price to Earnings Ratio (PE)

The price to earnings ratio (P/E) measures its current share price relative to its per-share earnings. The ratio is used in valuing companies. Read more on Price to Earnings Ratio (PE)

Price-Sales Ratio

Valuation is a term investors use to indicate the degree to which a stock is accurately priced. The price-sales ratio does this by comparing a company’s stock price to its revenues. Read more on Price-Sales Ratio
The Role of Price-to-Book Ratio in Fundamental Analysis

Price-to-Book Ratio

In this article, we'll explain how when used in the right context the price-to-book (P/B) ratio can help value investors identify quality stocks Read more on Price-to-Book Ratio

Producer Price Index (PPI)

The Producer Price Index (PPI) is a weighted index of prices from the perspective of the producer or wholesaler. The index is released once a month by the Bureau of Labor Statistics (BLS). Read more on Producer Price Index (PPI)

Profit Margin

Profit margin is one of the most commonly used profitability ratios that help investors understand what percentage of their sales has become profitable. Read more on Profit Margin

Put Option

A put option is a financial contract between a buyer and a seller. The owner of the put buys the right, but not the obligation, to sell the buyer of the contract 100 shares of a given stock at an agreed-upon price on or before the option's expiration date. Read more on Put Option
What is Put Option Volume?

Put Option Volume

Put option volume means the amount of buying or selling for a particular contract. It is usually similar to the volume of the underlying asset. Read more on Put Option Volume


The QQQ ETF is also known as the PowerShares QQQ. This is one of the most widely held and traded exchange-traded funds (ETF) Read more on QQQ ETF

Quantitative Easing

A quantitative easing program is one in which a nation’s central bank uses a supply of newly created money to purchase assets, typically in the form of government bonds, from institutions such as commercial banks, pension funds, and insurance companies. Read more on Quantitative Easing

Quick Ratio

The quick ratio (also known as the acid-test ratio) is a liquidity ratio that can be used as a stand-alone metric of liquidity or used to refine the current ratio. Read more on Quick Ratio
How Does the Quiet Period Work?

quiet period

Businesses pursuing an initial public offering (IPO) must enter the quiet period as well as corporate insiders prior to a company's earnings report. Read more on quiet period
Quiet Period Expirations Explained

Quiet Period Expirations

Quiet period expirations are the dates upon which a company’s registration for an Initial Public Offering (IPO) has been approved by the Securities & Exchange Commission (SEC). Read more on Quiet Period Expirations

Range Trading

Range trading is a trading strategy based on technical analysis of price movement between a defined level of support and resistance. Read more on Range Trading
Do Real Estate Investment Trusts Deserve a Place in Your Portfolio?

Real Estate Investment Trust (REIT) ETF

A Real Estate Investment Trust (or REIT) is made up of a number of real estate companies that own a portfolio of income-producing real estate assets. Read more on Real Estate Investment Trust (REIT) ETF


A recession is a downturn in the economy marked by multiple consecutive quarters of declining economic activity. Read more on Recession

Relative Strength Index

Relative Strength Index (RSI) is a momentum oscillator that measures the speed and change of price movements. The RSI oscillates between zero and 100. Read more on Relative Strength Index

Resistance Level

An asset’s resistance level is the price point at which its rise in price is slowed, or reversed when the volume of sellers increases. Read more on Resistance Level
Why the Best Days for Retail Investors May be Yet to Come

Retail Investor

In this article, we’ll define the retail investor and the pros and cons of being a retail investor. We’ll also go into more detail about why it’s never been a better time to be a retail investor Read more on Retail Investor

Retained Earnings

Retained earnings tell you how much profit a company has left over after they have paid out dividends. Retained earnings are different from revenue in the way that disposable income is different from salary. Read more on Retained Earnings

Retirement Calculator

The MarketBeat retirement calculator requires you to provide some basic information and the calculator does the rest. Read more on Retirement Calculator

Return On Assets

The return on assets (ROA) ratio is one of several profitability measures that investors use to measure their return on investment (ROI). Read more on Return On Assets

Return on Equity (ROE)

Return on equity is a measurement of how efficient a company is in using its assets from their shareholders to create earnings. Read more on Return on Equity (ROE)

Return on Investment (ROI)

Return on investment (ROI) is a performance measurement that shows your profit on an investment as a percentage of your overall investment. Read more on Return on Investment (ROI)

Reverse Stock Split

A reverse stock split is a deliberate corporate action where a company reduces the number of outstanding shares in the market while increasing the price per share by a proportional amount, therefore, keeping the market value of the shares the same. Read more on Reverse Stock Split

Risk Tolerance

Risk tolerance is a measurement of an investor’s willingness to accept a degree of variability in their investment returns Read more on Risk Tolerance

Roth IRA income limits

Is a Roth IRA right for you? A Roth IRA is a special type of tax-advantaged individual retirement account for contributing after-tax dollars. Learn more. Read more on Roth IRA income limits

Rule of 72

The Rule of 72 is a simplified equation that can help estimate the number of years required to double the money that is growing at a specified rate of return. Read more on Rule of 72

S&P 500 Index

The Standard and Poor’s (S&P) 500 index is a widely used stock market index that follows the stock price performance of 500 large cap companies. Read more on S&P 500 Index
What is the S&P/ASX 200 Index?

S&P/ASX 200 Index

The S&P/ASX 200 Index is Australia’s equivalent to the S&P 500 in the United States. It is the benchmark institutional investable stock market index in Australia. Read more on S&P/ASX 200 Index
What is the S&P/TSX Index?

S&P/TSX Index

The S&P/TSX Index is essentially Canada’s version of the S&P 500 in the United States. The index tracks the performance of approximately 250 of the largest and most prominent Canadian companies. Read more on S&P/TSX Index
What is a SEC Filing?

SEC Filing

An SEC filing is a series of documents that a publicly traded company must file with the United States Securities & Exchange Commission (SEC). Read more on SEC Filing
The Good and the Bad of Secondary Public Offerings

Secondary Public Offerings

A secondary public offering (SPO) is, as the name suggests, a secondary issuing of common shares after the company’s initial public offering (IPO). Read more on Secondary Public Offerings

Sell-Side Analysts

Sell-side analysts work for institutions (such as an investment bank or brokerage firm) that receive money from investors. The job of a sell-side analyst is to track the performance of various securities Read more on Sell-Side Analysts
What is the Shanghai Stock Exchange Composite Index?

Shanghai Stock Exchange Composite Index

The Shanghai Stock Exchange Composite Index (or SSE) is the closest approximation to the S&P 500 Index or Dow Jones industrial Average (DJIA) in the United States. Read more on Shanghai Stock Exchange Composite Index
Short Selling - Explanation For Shorting Stocks

Short Selling

Short selling refers to the sale of a security, such as a stock, not owned by the seller or that the seller has borrowed. Read more on Short Selling
What is a Special Dividend?

Special Dividends

A special dividend is a cash payment made by a company to its shareholders that is separate from any regular dividend the company is currently paying. Special dividends are typically the result of an earnings period in which a company received a windfall profit. Special dividends Read more on Special Dividends
Special Purpose Acquisition Company (SPAC) What You Need to Know

Special Purpose Acquisition Company (SPAC)

A special purpose acquisition company (SPAC) is an alternative to the traditional initial public offering process that public companies use to raise capital Read more on Special Purpose Acquisition Company (SPAC)
What is Stagflation and How Can it Affect Your Investments?


Stagflation is a combination of high unemployment combined with slow (or stagnant) economic growth. In this article, we'll look at the relationship between inflation and stagflation and why you can't have one without the other Read more on Stagflation

Stochastic Momentum Index (SMI)

The Stochastic Momentum Index (SMI) is an indicator of momentum for a security. The SMI is used in technical analysis as a refined alternative to a traditional stochastic oscillator. Read more on Stochastic Momentum Index (SMI)

Stock Portfolio Tracker

A portfolio tracker is an online tool that takes the place of manual spreadsheets and paper statements by giving investors up-to-the-minute information on all of the investments that make up their portfolio. Read more on Stock Portfolio Tracker
Stock Splits, Do They Really Impact Investors?

Stock Split

A stock split is an action taken by a corporation through which they increase the number of their outstanding shares by dividing (or splitting) each share. Read more on Stock Split

Stock Symbol

A stock symbol is an abbreviation used to identify publicly traded shares of a particular stock on a particular stock market. A stock symbol may consist of letters, numbers or a combination of both. Read more on Stock Symbol

Stop Order

A stop order is a trading mechanism that automatically issues a market order to buy or sell a stock once its price reaches a predetermined target. Read more on Stop Order


A straddle is an options trading strategy that takes advantage of the implied volatility (i.e. the price movement) of an underlying asset even when they do not know the exact direction of that movement. Read more on Straddles


The strangle strategy in trading options is premised on the anticipation of strong price movement in one direction or another by a particular security. Read more on Strangles

Street Name

To have a security held in street name means an investor, although the real (or beneficial) owner of the security will not have their name listed with the company’s books. Read more on Street Name

Strike Price

The strike price is the price at which the buyer of the option can exercise his option. This is why the strike price is called the exercise price. Read more on Strike Price

Support Level

A support level is a technical indicator of price movement. When an asset is said to be at a support level, it has reached a price floor. Read more on Support Level


A swap is a form of a derivative instrument where two parties enter into a contract to exchange a sequence of cash flows. This exchange takes place on a specific date or at specific intervals as specified in the contract.  Read more on Swap

Systematic Risk

Systematic risk is most simply defined as the inherent risk an investor takes by having money invested into a specific asset class. Read more on Systematic Risk


A tariff is a tax (also referred to as a customs duty) that is applied to foreign goods entering another country. Read more on Tariff

Technical Analysis

Technical analysis is the interpretation of the price action of a company's underlying stock using various charts and statistical indicators to determine price support/resistance, range, and trends. Read more on Technical Analysis

Total Return

Total return is a performance metric that expresses the actual rate of return of an investment or of a portfolio over a period of time. Read more on Total Return

Trade Deficit

A trade deficit is a condition in which one country is importing more goods and services from all the other countries it trades with than it is sending to other country’s (i.e. exporting). Read more on Trade Deficit

Trade War

A trade war is an economic policy that is instituted when one country responds to a trade imbalance by raising import tariffs on the goods and services from one or more countries. Read more on Trade War

Trading Ex-Dividend

Trading ex-dividend means to enter a trade prior to a stock’s ex-dividend date and closing the trade shortly after the date. Read more on Trading Ex-Dividend
Trading Halts Explained

Trading Halts

In rare circumstances, it has been necessary to suspend trading in a particular stock, or in even rarer occasions, the entire market. Read more on Trading Halts

Trading Strategy

A trading strategy in the stock market is simply a plan designed to make a profit in the stock market by selling short or buying long. Read more on Trading Strategy

Treasury Bonds

A treasury bond is a government bond issued by the United States Treasury Department. Treasury bonds are one fixed-rate security that the United States issues to fund its national debt. Read more on Treasury Bonds
Upside/Downside Explained


Analysts use either fundamental or technical analysis to arrive at conclusions about a stock’s future price movement. When a stock has upside, analysts will typically upgrade the stock. Conversely, when a stock has downside, an analyst may downgrade the stock. Read more on Upside/Downside
Learning About the VIX - Volatility Index

VIX - Volatility Index

The VIX, or Volatility Index, was introduced by the Chicago Board Options Exchange (CBOE) as a means of gauging the market’s expectations of forward-looking volatility. Read more on VIX - Volatility Index
Most Volatile Stocks, What Investors Need to Know

Volatile Stocks

Most-volatile stocks are companies that have had large price swings, leading to a significant gap between these companies' intraday highs and intraday lows. Read more on Volatile Stocks
What is Volume-Weighted Average Price (VWAP) and How Does it Benefit Traders?

Volume-weighted average price (VWAP)

Volume-weighted average price (VWAP) is a technical indicator used by traders to analyze the intraday price of a stock relative to volume throughout a trading session Read more on Volume-weighted average price (VWAP)

What is an Exchange-Traded Fund (ETF)?

what is an ETF investment

What is an ETF investment and how does it work? ETFs, a type of pooled investment security, operate similar to mutual funds. Learn more with MarketBeat. Read more on what is an ETF investment

what is the dow jones industrial average

“The Dow” is shorthand for the Dow Jones Industrial Average and one of the most-watched stock market indices in the world. Learn more with MarketBeat. Read more on what is the dow jones industrial average
Why is the Ex-Dividend Date Significant to Investors?

what is the ex dividend date

The ex-dividend date is the first-day stock will be trading “ex-dividend” , once the company announces a date of record for their dividend. Read more on what is the ex dividend date
How Year-over-Year (YOY) Measurements Can Make You a Smarter Investor

Year-over-Year (YOY)

In this article, we’ll help investors understand what the year-over-year comparison attempts to measure, the benefits of this measurement to investors, as well as how to calculate YOY when it’s not readily provided Read more on Year-over-Year (YOY)

Yield Curve

The yield curve is a visual representation of the relationship between bond yields and the maturity length of different bonds. Read more on Yield Curve

Here are terms both novice investors and seasoned pros should understand

Every profession, passion project, and hobby has its own terminology. The same is true of the stock market. So if you’re going to invest in the stock market, it’s important to know some of the basic terminologies. Understanding these terms can help provide insight into how the stock market works.

In this article, we’ll review some basics about investing in the stock market including how to go about buying stocks. At the end of the article, we’ve compiled a master list of stock market terms. We encourage you to return to this link regularly as a handy reference.

Let’s start with a basic question, what is the stock market? The key thing to understand is that “the market” is not one single entity. It’s a marketplace of all the individuals and institutions that buy and sell stocks. These investors do their trading on several stock market exchanges. Some of the most commonly referenced exchanges are the New York Stock Exchange (NYSE) and the NASDAQ.

Stocks listed on an exchange can be bought and sold. These stocks represent shares of ownership in a company. Companies are willing to sell shares of their company in order to raise capital to fund their own operating expenses or grow the business.

Companies with stocks for purchase on a publicly-traded market must follow certain rules set forth by regulatory agencies like the SEC (Securities and Exchange Commission). They must be transparent about their accounting and make their business operations public.

Investors can also purchase stocks privately—they don’t have to be traded on a trading platform like the NYSE or the NASDAQ. However, this carries a bit more risk because privately held companies are not subject to the same regulatory requirements as publicly traded companies.

Despite the myriad complexities of the stock market, learning how to buy stock is not difficult. You can go online or onto an app on your phone, search for a company, and place your trade. The brokerage firm may or may not charge you a small, nominal fee to make the trade. These stocks then go into your portfolio. You can hold on to them as long as you like or sell them when you feel the time is right.

That’s all there is to it.

On the back end, it’s a little more complicated, but you don’t have to worry about any of it. In case you’re curious though, once you indicate an interest in buying or selling a certain stock, a broker finds a buyer or seller on your behalf. Market makers used to pack onto the floor of the stock exchange and fight through the frenzied mob of other stock brokers until they connected with a willing party to the transaction. Today, most matchmaking between buyers and sellers is done electronically.

But as mentioned, from your end, there is not much to it other than clicking on which stocks you want to buy and hitting submit.

The stocks you buy will be common shares. These shares give holders voting rights in the activities of the company. If you own enough shares, you can even effectively take ownership of the company.

There are also preferred shares of stock, which are not readily available to retail investors. These preferred stocks do not carry voting rights, but they do get preferential treatment in regard to dividends, receiving company payouts first. If the company is liquidated, preferred stockholders will also get their money first.

Stock trading is the act of buying or selling stock. Every time an investor buys shares, or fractional shares, of a stock, they make a stock trade. But not all stock traders have the same objectives.

Some investors buy shares of stock with the intention of holding on to them for long periods of time. This is called taking a long position. The objective is to let the stock price appreciate and/or collect dividends. Taking a long position doesn’t necessarily mean these investors are holding the stock forever. However, it’s generally understood that a long position means holding the stock for more than 12 months.

There is nothing wrong with this strategy. In fact, it’s been used by great investors like Warren Buffet to build sizeable wealth.

Other investors take a more active approach to stock trading. Their objective is to capitalize on market fluctuations. The strategy is to buy low and sell high as stock prices go up and down.

Active traders place trades at least 10 times per month. They may follow current events, general market trends, and company activity to time their moves.

Day traders are even more active traders. As the name implies, day traders spend the whole day buying and selling stocks. They may not even need to invest attention in global, market, or company events—they can just watch stock prices. In fact, the most experienced traders can even just rely on stats, trends, and math to make their move.

Of course, without a working, ingrained knowledge of stock trading terminology, everything they know would just be theory. After all, how would a trader know how to make the right type of transaction if they don’t even know what it’s called?

You may not be a day trader, but if you have any interest in dabbling with stocks, you need to know the rules of the game. Even if you’re a passive investor who invests 10% of their income into a mutual fund managed by someone else, you should get to know stock market trading terms. For one thing, you’ll be able to have a more nuanced conversation with your financial advisor. But you’ll also be more likely to identify additional opportunities for income growth as they become available.

If you are an active investor, knowing these stock terms will help you see additional pathways for increasing your cash flow. When there’s a term you don’t understand, you can go down that proverbial rabbit hole and learn a whole new way of trading.

Just keep in mind that the more you know, the more you can leverage your knowledge into profit. The basic stock trading terms are your starting point for this growth.

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