Stock Market Terminology

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Stock Market

A general term used to describe all transactions involving the buying and selling of stock shares issued by a company.

Beta

A measure of a stock's volatility compared to changes in the overall stock market.

Broker

A person who is licensed to buy and sell stocks, provides investment advice, and collects a commission on each purchase or sale.

Stock

A share of ownership in the assets and earnings of a business.

Growth Stock

A stock from a company which has a consistent record of relatively rapid growth and earnings in all economic conditions.

Cyclical Stock

A stock which is greatly influenced by changes in the economic business cycle.

Income Stock

A stock which pays higher than average dividends because the company chooses to retain only a small portion of the profits.

Stock Ticker Symbol

A stock's abbreviated trading symbol name.

Speculative Stock

A very high risk stock from a company with potential for substantial earnings in the future.

Portfolio Diversification

An individual who has a variety of investments tools to decrease risk.

Net Change

Difference between the closing price of the share from the prior day and the current day.

Dividends

Distributions of earnings paid to stockholders.

High Selling Price

Highest selling price of one share of stock from the previous day.

Earnings Per Share

How much income a company has available to pay in dividends and reinvest as retained earnings on a per share basis.

Standard and Poor's 500

Index Tracks the stock market activity for 500 stocks.

Low Selling Price

Lowest selling price of one share of stock from the previous day.

NASDAQ

Monitors fast moving technology and financial services stocks. Usually the companies are smaller and transactions occur over an electronic market.

Book Value

Net worth of a company.

Volume 100's

Number of transactions to the share on the reported day, represented in hundreds.

Dow Jones Industrial

Oldest indicator of the ups and downs of the stock market. Lists the 30 leading industrial blue chip stocks.

Price/earning Ratio

Relationship between the price of one share of stock and the annual earnings of the company.

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.

Preferred Stock

Shares which pay fixed dividends and have precedence over common stock.

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.

Value Stock

Stock from a company which has a low market price considering historical earning records and value of current assets.

Blue Chip Stock

Stock from nationally recognized companies which dominate the industry often having annual revenue of $1 billion or more.

Year to Date

Stock price percent change from January 1st.

Regional Stock Exchange

Stocks traded to investors who are living in a specific geographical area.

Market Price

The amount a willing buyer will pay a willing seller for a stock.

Dividend Yield Percentage

The dividend expressed as a percentage of the price of the share.

Par Value

The fixed value stated on a preferred stock certificate which indicates the dividends which will be paid to the shareholder.

52 Week High

The highest price a stock was sold for in the past 52 weeks.

Rate of Return

The increase or decrease in the original purchase price of an investment.

52 Week Low

The lowest price a stock was sold for in the past 52 weeks.

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.

New York Stock Exchange

The oldest and largest exchange with the strictest company standards.

Stock Certificate

The piece of paper a shareholder receives representing their ownership of a stock.

Close

The price of the last share sold for the day.

American Stock Exchange

The second largest exchange with less stringent requirements allowing for younger, smaller companies to be listed.

Investment Risk

The uncertainty about the outcome of an investment.

Dividends per Share

Total cash paid to common stockholders per share.


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