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Swing Tradr

Basic Stock Market Terminology

Learn about Swing Trading by starting with these definitions.

  1. Bull market: A market characterized by rising prices.
  2. Bear market: A market characterized by falling prices.
  3. Volatility: A measure of the fluctuation in the price of a security or market index.
  4. Portfolio: A collection of investments held by an individual or organization.
  5. Diversification: The practice of spreading out investments in order to minimize risk.
  6. Asset allocation: The process of dividing an investment portfolio among different asset categories, such as stocks, bonds, and cash.
  7. Risk tolerance: An individual's willingness to take on risk in pursuit of potential rewards.
  8. Blue-chip stock: A stock of a well-established and financially stable company with a long track record of strong performance.
  9. IPO: Initial public offering, the first sale of a company's stock to the public.
  10. Stock split: A corporate action in which a company increases the number of its outstanding shares by issuing more shares to current shareholders.
  11. Earnings per share (EPS): A company's profits divided by the number of its outstanding shares of stock.
  12. Market capitalization (market cap): The total value of a company's outstanding shares of stock.
  13. P/E ratio: The price-to-earnings ratio, a measure of a company's stock price relative to its earnings per share.
  14. Broker: An individual or firm that acts as an intermediary between buyers and sellers of securities.
  15. Trade: The buying and selling of securities.
  16. Order: A request to buy or sell securities at a specified price.
  17. Market order: An order to buy or sell a security at the best available price.
  18. Limit order: An order to buy or sell a security at a specified price or better.
  19. Short selling: The sale of a security that is not owned by the seller, with the intention of repurchasing it later at a lower price.
  20. Derivative: A financial instrument whose value is derived from the value of an underlying asset.
  21. Return on investment (ROI): A measure of the profitability of an investment, calculated by dividing the profit by the cost of the investment.
  22. Yield: The return on an investment, expressed as a percentage of the investment's cost.
  23. Dividend: A payment made by a corporation to its shareholders, typically in the form of cash or additional shares of stock.
  24. Growth stock: A stock of a company that is expected to experience rapid earnings growth.
  25. Value stock: A stock that is believed to be undervalued by the market, based on its fundamental characteristics.
  26. Fundamental analysis: The study of a company's financial health and business model in order to determine the intrinsic value of its stock.
  27. Technical analysis: The study of past price and volume data in order to identify patterns and predict future price movements.
  28. Indices: A statistical measure of the change in a securities market. Examples include the S&P 500 and the Dow Jones Industrial Average.
  29. Beta: A measure of a stock's volatility in relation to the overall market.
  30. Alpha: A measure of the excess return of an investment relative to the benchmark it is compared to.
  31. Stock index: A statistical measure of the changes in the value of a group of stocks.
  32. Mutual fund: An investment vehicle that pools together the money of many investors and uses that money to buy a diversified portfolio of stocks, bonds, or other securities.
  33. Exchange-traded fund (ETF): A type of investment fund that tracks the price of a basket of assets and is traded on an exchange like a stock.
  34. Margin: The use of borrowed money to invest in securities.
  35. Margin call: A demand by a broker that an investor deposit additional money or securities to cover potential losses.
  36. Bullish: A positive outlook on the market or a particular security.
  37. Bearish: A negative outlook on the market or a particular security.
  38. Correction: A reverse movement, usually downward, of at least 10% in a stock, bond, commodity, or index to adjust for an overvaluation.
  39. Primary market: The market where new securities are issued and sold to investors.
  40. Secondary market: The market where securities that have been previously issued are bought and sold among investors.
  41. Over-the-counter (OTC): A market where securities are traded directly between buyers and sellers, rather than on a formal exchange.
  42. Penny stock: A stock with a low price per share, usually less than $5.
  43. Day trading: The practice of buying and selling securities within the same day.
  44. Scalping: A type of day trading characterized by the quick buying and selling of securities to profit from small price changes.
  45. Technical analysis: A method of evaluating securities by analyzing statistics generated by market activity, such as past prices and volume.
  46. Fundamental analysis: A method of evaluating securities by examining a company's financial and economic fundamentals, such as its earnings, revenues, and assets.
  47. Insider trading: The buying or selling of securities by someone with access to material, nonpublic information.
  48. Short interest: The total number of shares of a security that have been sold short but have not yet been repurchased.
  49. Swing trading: A style of trading that involves holding positions for a period of a few days to a few weeks, in an attempt to profit from short-term price swings.
  50. Trend: The general direction of a market or the price of a security.
  51. Resistance: A price level at which it is difficult for the price of a security to rise above.
  52. Support: A price level at which it is difficult for the price of a security to fall below.
  53. Moving average: A statistical measure of the average price of a security over a given time period, used to smooth out short-term price fluctuations.
  54. Candlestick chart: A type of chart that shows the high, low, opening, and closing prices of a security for a specific period, with the use of candlestick patterns.
  55. Gap: A sudden and significant price movement outside of the range of the previous day's trading.
  56. Bull trap: A situation where a false signal indicates that a bullish trend is imminent, leading to a decline in the price of a security.
  57. Bear trap: A situation where a false signal indicates that a bearish trend is imminent, leading to an increase in the price of a security.
  58. Bull spread: An option spread strategy that profits from an increase in the price of the underlying security.
  59. 52-week high: The highest price at which a security has traded in the past 52 weeks.
  60. 52-week low: The lowest price at which a security has traded in the past 52 weeks.
  61. Market maker: A financial firm or individual that stands ready to buy and sell securities, typically at all times when the market is open.
  62. Short squeeze: A situation where a sudden increase in demand for a security forces short sellers to buy back their short positions at a higher price, leading to a further increase in the price of the security.
  63. Reverse split: A corporate action in which a company reduces the number of its outstanding shares by consolidating them into fewer, but proportionately more valuable, shares.
  64. Dividend yield: The annual dividend of a company's stock expressed as a percentage of the current market price.
  65. Earnings yield: The earnings per share of a company's stock expressed as a percentage of the current market price.
  66. Price-to-book ratio: The price of a company's stock divided by its book value per share.
  67. Price-to-sales ratio: The price of a company's stock divided by its revenue per share.
  68. Price-to-cash flow ratio: The price of a company's stock divided by its cash flow per share.
  69. Net asset value (NAV): The value of a mutual fund or ETF's assets minus its liabilities, divided by the number of its outstanding shares.
  70. Front-running: The illegal practice of a broker or trader executing trades for their own account based on material, nonpublic information obtained from a client.
  71. Spoofing: The illegal practice of placing orders with the intent to cancel them before they are executed, in order to manipulate the market.
  72. Naked short selling: The illegal practice of selling a security without first borrowing it or ensuring that it can be borrowed.
  73. Pump and dump: The illegal practice of artificially inflating the price of a security through false or misleading statements, in order to sell it at a higher price.
  74. Fraud: A deception or misrepresentation that is made with the intent to mislead or defraud.
  75. Insider trading: The illegal practice of buying or selling securities based on material, nonpublic information.
  76. Money laundering: The illegal practice of disguising the proceeds of crime as legitimate funds.
  77. Market manipulation: The illegal practice of artificially affecting the supply or demand for a security in order to influence its price.
  78. Embezzlement: The illegal practice of misappropriating funds or assets for personal gain.
  79. Asset: Anything that has value and can be owned.
  80. Liability: A financial obligation or debt.
  81. Equity: The ownership interest in a company.
  82. Capital: The money or assets that a company uses to generate income.
  83. Revenue: The income that a company receives from its business activities.
  84. Profit: The excess of revenues over expenses.
  85. Loss: The excess of expenses over revenues.
  86. Expense: An outflow of money or the consumption of assets to generate income.
  87. Capital gain: The profit that results from the sale of a capital asset, such as a stock or real estate.
  88. Capital loss: The loss that results from the sale of a capital asset, such as a stock or real estate.
  89. Return on investment (ROI): The benefit or profit that results from an investment, expressed as a percentage of the cost of the investment.
  90. Gross domestic product (GDP): The total value of goods and services produced within a country in a given year.
  91. Inflation: The general increase in prices and fall in the purchasing value of money.
  92. Deflation: The general decrease in prices and increase in the purchasing value of money.
  93. Consumer price index (CPI): A measure of the average change over time in the prices paid by consumers for a basket of goods and services.
  94. Producer price index (PPI): A measure of the average change over time in the prices received by domestic producers for their output.
  95. Employment: The state of having a job or income.
  96. Unemployment: The state of being without a job or income.
  97. Gross national product (GNP): The total value of goods and services produced by a country's residents, whether they are domestic or abroad.
  98. Balance of trade: The difference between a country's imports and exports.
  99. Current account: The balance of a country's trade in goods and services, plus net income from abroad and net transfer payments.
  100. Trade deficit: The situation where a country's imports exceed its exports.
  101. Trade surplus: The situation where a country's exports exceed its imports.

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