Top Terminology of Stock Market

BUY:- When you open a 'buy' position, you are essentially buying an asset from the market. 

SELL:-when you close your position, you 'sell' it back to the market

BID:- The term "bid" refers to the highest price a buyer will pay to buy a specified number of shares of a stock at any given time.

ASK:-The term "ask" refers to the lowest price at which a seller will sell the stock. The bid price will almost always be lower than the ask or “offer,” price.

BID-ASK SPREAD:-a bid-ask spread is the difference between the asking price and the offering price of a security or other asset. The bid-ask spread is the difference between the highest price a buyer will offer (the bid price) and the lowest price a seller will accept (the ask price).

BULL:- A bull market occurs when securities are on the rise,

BEAR:- while a bear market occurs when securities fall for a sustained period of time.

LIMIT OREDERS :- A limit order is an order to buy or sell a stock at a specific price or better.  A buy limit order can only be executed at the limit price or lower, and a sell limit order can only be executed at the limit price or higher.  A limit order is not guaranteed to execute.  A limit order can only be filled if the stock’s market price reaches the limit price.  While limit orders do not guarantee execution, they help ensure that an investor does not pay more than a pre-determined price for a stock.

MARKET ORDER:- A market order is an order to buy or sell a stock at the market’s current best available price. A market order typically ensures an execution, but it does not guarantee a specified price. Market orders are optimal when the primary goal is to execute the trade immediately. A market order is generally appropriate when you think a stock is priced right, when you are sure you want a fill on your order, or when you want an immediate execution.

STOP ORDER:- A stop order is an order to buy or sell a stock at the market price once the stock has traded at or through a specified price (the “stop price”). If the stock reaches the stop price, the order becomes a market order and is filled at the next available market price. If the stock fails to reach the stop price, the order is not executed.

A stop order may be appropriate in these scenarios:

• When a stock you own has risen and you want to attempt to protect your gain should it begin to fall
• When you want to buy a stock as it breaks out above a certain level, believing that it will continue to rise

DAY ORDER:-Unless an investor specifies a time frame for the expiration of an order, orders to buy and sell a stock are “Day” orders, meaning they are good only during that trading day.

VOLATILITY:- Volatility is the rate at which the price of a stock increases or decreases over a particular period.

Higher stock price volatility often means higher risk and helps an investor to estimate the fluctuations that may happen in the future.

LONG POSITION:-Having a “long” position in a security means that you own the security. Investors maintain “long” security positions in the expectation that the stock will rise in value in the future. The opposite of a “long” position is a “short” position.

AVERAGING:- Buying more shares at a lower price than what you previously paid is known as averaging down, or lowering the average price at which you purchased a company's shares. However, even though your average purchase price would've gone down,

MARKET CAPITALIZATION:- refers to the total value of all a company's shares of stock. It is calculated by multiplying the price of a stock by its total number of outstanding shares. 

FLOAT:- The term float refers to the regular shares a company has issued to the public that are available for investors to trade. This figure is derived by taking a company's outstanding shares and subtracting any restricted stock, which is stock that is under some sort of sales restriction.

AUTHORIZED SHARES:- also known as authorized stock or authorized capital stock, are defined as the maximum number of shares that a company is legally allowed to issue to investors, as per its own determinations.

ITNITIAL PUBLIC OFFERING:- When a private company first sells shares of stock to the public, this process is known as an initial public offering (IPO). In essence, an IPO means that a company's ownership is transitioning from private ownership to public ownership. For that reason, the IPO process is sometimes referred to as "going public."

SECONDARY OFFERING:- The term secondary offering refers to the sale of shares owned by an investor to the general public on the secondary market. These are shares that were already sold by the company in an initial public offering (IPO). The proceeds from a secondary offering are paid to the stockholders who sell their shares rather than to the company.

Some companies may offer follow-on offerings, which may also be called secondary offerings. These offerings can take on two different forms: non-dilutive and dilutive secondary offerings.

DIVIDEND:- A dividend is the distribution of corporate profits to eligible shareholders. Dividend payments and amounts are determined by a company's board of directors. Dividends are payments made by publicly listed companies to reward investors for putting their money into the venture.

BROKER:- A broker is an individual or firm that acts as an intermediary between an investor and a securities exchange. Because securities exchanges only accept orders from individuals or firms who are members of that exchange, individual traders and investors need the services of exchange members. Brokers provide that service and are compensated in various ways, either through commissions, fees or through being paid by the exchange itself. 

EXCHANGE:- An exchange is a marketplace where securities, commodities, derivatives and other financial instruments are traded. The core function of an exchange is to ensure fair and orderly trading and the efficient dissemination of price information for any securities trading on that exchange. Exchanges give companies, governments, and other groups a platform from which to sell securities to the investing public.

PORTFOLIO:- A portfolio is a collection of financial investments like stocks, bonds, commodities, cash, and cash equivalents, including closed-end funds and exchange traded funds (ETFs). People generally believe that stocks, bonds, and cash comprise the core of a portfolio. Though this is often the case, it does not need to be the rule. A portfolio may contain a wide range of assets including real estate, art, and private investments.

You may choose to hold and manage your portfolio yourself, or you may allow a money manager, financial advisor, or another finance professional to manage your portfolio.

MARGIN:-Margin refers to the amount of equity an investor has in their brokerage account. "To margin" or "buying on margin" means to use money borrowed from a broker to purchase securities. You must have a margin account to do so, rather than a standard brokerage account. A margin account is a brokerage account in which the broker lends the investor money to buy more securities than what they could otherwise buy with the balance in their account.

STOCK SYMBOL (TICKER):-A stock symbol is a unique series of letters assigned to a security for trading purposes. Stocks listed on the New York Stock Exchange (NYSE) can have four or fewer letters. Nasdaq-listed securities can have up to five characters. Symbols are just a shorthand way of describing a company's stock, so there is no significant difference between those that have three letters and those that have four or five. Stock symbols are also known as ticker symbols.