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Stock Market Lingo
Vocabulary from our unit on Language of the Stock Market
Question | Answer |
---|---|
Stock Market | A general term used to describe all transactions involving the buying and selling of stock shares issued by a company. |
Stock | A share of ownership in the assets and earnings of a business. |
Stock Certificate | The piece of paper a shareholder receives representing their ownership of a stock. |
Portfolio Diversification | An individual who has a variety of investments tools to decrease risk. |
Investment Risk | The uncertainty about the outcome of an investment. |
Rate of Return | The increase or decrease in the original purchase price of an investment. |
Common Stock | Shares or units of ownership in a public corporation. The shareholder has voting rights in the corporation. |
Stock Split | Shares owned by existing stockholders are divided into a larger number of shares. |
Dividends | Distributions of earnings paid to stockholders. |
Preferred Stock | Shares which pay fixed dividends and have precedence over common stock. |
Par Value | The fixed value stated on a preferred stock certificate which indicates the dividends which will be paid to the shareholder. |
Market Price | The amount a willing buyer will pay a willing seller for a stock. |
Growth Stock | A stock from a company which has a consistent record of relatively rapid growth and earnings in all economic conditions. |
Income Stock | A stock which pays higher than average dividends because the company chooses to retain only a small portion of the profits. |
Value Stock | Stock from a company which has a low market price considering historical earning records and value of current assets. |
Countercyclical Stock | Stock from a company which gives consistent records of returns even when the economy is suffering because their product is always in demand. |
Cyclical Stock | A stock which is greatly influenced by changes in the economic business cycle. |
Speculative Stock | A very high risk stock from a company with potential for substantial earnings in the future. |
Blue Chip Stock | Stock from nationally recognized companies which dominate the industry often having annual revenue of $1 billion or more. |
Book Value | Net worth of a company. |
Earnings Per Share | How much income a company has available to pay in dividends and reinvest as retained earnings on a per share basis. |
Price/earning Ratio | Relationship between the price of one share of stock and the annual earnings of the company. |
Beta | A measure of a stock’s volatility compared to changes in the overall stock market. |
Year to Date | Stock price percent change from January 1st. |
52 Week High | The highest price a stock was sold for in the past 52 weeks. |
52 Week Low | The lowest price a stock was sold for in the past 52 weeks. |
Stock Ticker Symbol | A stock's abbreviated trading symbol name. |
Dividends per Share | Total cash paid to common stockholders per share. |
Dividend Yield Percentage | The dividend expressed as a percentage of the price of the share. |
Volume 100’s | Number of transactions to the share on the reported day, represented in hundreds. |
High Selling Price | Highest selling price of one share of stock from the previous day. |
Low Selling Price | Lowest selling price of one share of stock from the previous day. |
Close | The price of the last share sold for the day. |
Net Change | Difference between the closing price of the share from the prior day and the current day. |
Dow Jones Industrial | Oldest indicator of the ups and downs of the stock market. Lists the 30 leading industrial blue chip stocks. |
Standard and Poor’s 500 Index | Tracks the stock market activity for 500 stocks. |
NASDAQ | Monitors fast moving technology and financial services stocks. Usually the companies are smaller and transactions occur over an electronic market. |
Bear Market | The market is doing poorly and investors are not confident in the economy. Investors are not purchasing stocks and are selling what is already owned. |
Bull Market | The market is doing well and investors are optimistic about the economy and purchasing stocks. |
Broker | A person who is licensed to buy and sell stocks, provides investment advice, and collects a commission on each purchase or sale. |
New York Stock Exchange | The oldest and largest exchange with the strictest company standards. |
American Stock Exchange | The second largest exchange with less stringent requirements allowing for younger, smaller companies to be listed. |
Regional Stock Exchange | Stocks traded to investors who are living in a specific geographical area. |