Anyone just starting out with stock market trading may be confused by the complex language used.
The language used is completely different to regular English and this can make understanding exactly what’s going on very difficult.
If you are serious about improving your stock market education and general knowledge, then it’s a good idea to take a look at some of the common terms and what they actually mean in layman’s terms.
Don’t let this worry you though, because this isn’t actually as difficult as it might seem, after a while it will become second nature.
Stock And Shares
It can be confusing for many first time traders to hear about stocks and shares, they are often used interchangeably.
Both of these are actually very similar and both relate to change in ownership of the company.
When using stock market trading language, stocks can mean shares in multiple companies, but if you say that you own shares then this only means that you own a companies individual shares.
Closing Price
The closing price is the price that the shares close at when trading has closed.
Dividend
A dividend is your reward for owning a share in the company. The dividend only needs to be paid if the company is making a profit. A dividend is the shareholders share of the profits that the company has made over the year.
Bull
A bull is a certain type of investor who will purchase shares expecting them to increase in value. The stocks are retained until they increase in value and then they are sold. This will leave the trader with a profit.
A bull is someone who buys shares at a lower price and then tries to sell them at a higher price.
Bear
A bear is someone who will either sell shares that they already own or borrow money and then use this to purchase new shares at a lower price.
If you are serious about succeeding at stock market trading then it’s important that you understand as many of the different terms as possible. Over time you will learn about many new terms which will also need to become part of your vocabulary.
Understanding Stock Market terminology certainly makes it easier to learn stock market strategies.
Another that confuses a lot of people is, what is the different between the Bid and Ask price of a Stock, Option, or Currency pair.
Cade´s last [type] ..Forex Interval Trading System- ‘Sneak Peak’ review
G’day Sean,
You are correct that the Market Language is a bit different, but as a stockmarket investor for some time, I found it all became familiar after a couple of months and was very comfortable for me using the language. Thanks for this great info.
Cheers
Harry
Harry Lynn´s last [type] ..Grand Pianos – Nuts and Bolts Part Three
I find that people some people are afraid to trade the share market because of the terminology used to describe any aspect of share market trading. I find if you dumb it down and compare the terminology to something that they can relate to, then they would start to understand and become more confident to trade the markets. A classic one that springs to mind is covered calls, which is basically share renting which if you compare to property people really get it.
Danny Younes´s last [type] ..Work From Home Part Time- The Hours You Want
I used to be totally ignorant of the stock market jargon but picked it up very quickly with the right education package. It’s even better when the education includes stock recommendations from analysts who have proven themselves over time.