Popular Stock Market Terminology

There’s a lot of different stock market terminology and lingo in the industry. Stock market terms such as bid and ask, level 1, level 2, premarket and aftermarket hours, float, technical analysis, and candlestick chart patterns etc. Having a solid comprehension of these terms will help you to become a better trader. Just be aware that it takes time to understand all of the lingo so give yourself a break if it takes a bit of a learning curve.

The market is confusing enough without understanding the stock market terminology and lingo that everyone is using. Below is a short list of the most common terms that you will hear as a trader.

Having a solid understanding of these terms will allow you to communicate in the chat rooms, understand the Bullish Bears lessons, and become an overall more efficient trader. We can’t stress enough how  very important it is to learn the basics of the stock market before trading!

Most Popular Stock Market Terms

  1. 52-week high/low When a stock hits a yearly high or low
  2. After Hours Trading done after the market closes
  3. Ask The price a seller is willing to sell for. (The lowest ask price is most commonly referenced)
  4. Bid The price a buyer is willing to buy for. (The highest bid price is most commonly referenced)
  5. Breakouts When a stock “breaks out” above it’s previous resistance level
  6. Candlesticks A type of chart where each candle represents the high, low, open & close for a given period
  7. Covering Buying back the shares that were sold short
  8. ETF An exchange traded fund comprised of a set of equities
  9. Earnings Reports (E/R) A company’s quarterly/annual report of their financials
  10. Filing A document filed with the SEC regarding company updates
  11. Float The amount of shares available for public trading
  12. Fundamental Analysis Analyzing a company & its industry (financials, filings, sector, etc.)

Gap’s, Float, PDT: Stock Market Terms

  1. Gap Up/Down When a stock opens above or below its previous closing price
  2. Going Long Buying a stock with intentions of selling at a higher price
  3. High/Low of Day (HOD/LOD) A stock’s highest or lowest price for the day
  4. Hard-to-borrow A stock that is not readily available to short. Brokers will often charge an additional fee to those trying to short hard to borrow stocks.
  5. Liquidity The ease with which a stock can be bought or sold without drastically affecting the stock’s price
  6. Low Float – A stock with a low amount of publicly traded shares, often times experiencing higher volatility
  7. Market makers The firms responsible for facilitating buy & sell orders and maintaining liquidity in the markets.
  8. Market Cap – The total dollar value of a company based on the stock’s price and outstanding shares.
  9. Outstanding Shares The total amount of shares issued, including both the float and institutional ownership
  10. Pre-Market Trading done before the market opens
  11. Profits & Losses (P&L) A portfolio’s gains/losses for a given period
  12. Pattern Day Trader Rule (PDT) An SEC rule limiting traders with under $25,000 in their accounts to a maximum of four day trades in five days.
stock market terms

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Reward & Support

PR A press release issued by a company

Red-to-Green & Green-to-Red When a stock goes from being up on the day to down on the day (or vice versa)

Resistance A price level at which sellers repeatedly overpower buyers, making it difficult for the stock to increase in price.

Risk/Reward How much money you plan to risk on a trade compared to how much you expect to gain

Scalp Taking advantage of very small price changes

Short SellingSelling shares of a stock that you do not own in hopes of buying the shares back at a lower price (the opposite of going long). Very popular when trading penny stocks.

Spread – The price difference between the bid and the ask

Support A price level at which buyers repeatedly overwhelm sellers, making it difficult for the stock to drop lower in price.

Technical Analysis Analyzing a stock’s historical price action (using charts and technical indicators) to predict future movement.

What Are the 4 Types of Stocks?

  1. There are more than 4 types of stocks. Here are the most popular:
  2. Dividend stocks.
  3. Blue chip stocks.
  4. Biotech stocks.
  5. Gold stocks.
  6. Oil stocks.
  7. Bank stocks.
  8. Tech stocks.
  9. Defense stocks.
  10. Consumer staples and discretionary.

What Is It Called When a Stock Goes Up?

  1. There are several terms for when a stock goes up:
  2. Bullish.
  3. Gap up.
  4. Uptick.
  5. Uptrend.

Volume, Long, Short: Stock Market Terms

Trend The general direction of a stock’s price movement. A stock can be in an uptrend or downtrend.

Volume The amount of shares a stock trades for a given time period

Long  – When a trader buys a position in a stock or option.

Short When a trader sells (borrows from their broker to sell the position on the open market) a position in a stock or option.

Level 2Level 2 trading is a tool used by traders to see bid ask spreads. Breaking down how to trade level 2 allows you to see what others are looking at when buying a stock.

We will continue to add to this list of stock market terms as time goes on. The world is always changing and we need to keep up to date! Remember, with learning the stock market, it takes time! You may feel overwhelmed on where to start. No problem! We all have felt that way and we wrote a page on getting started just for YOU right here.

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