Stock Market Terms

Six largest stock markets and location in order

New York Stock Exchange (NYSE)-U.S Tokyo Stock Exchange- Japan NASDAQ- U.S Euronext- Europe London (FTSE)- U.K Shanghai Stock Exchange- China

OTC market

a decentralized market of securities not listed on an exchange where market participants trade over the telephone all the electronic instead of a trading floor

Futures

a financial contract obligating the buyer to purchase an asset (or the seller to sell an asset), such as a physical commodity or a financial instrument, at a predetermined date and price

Brokerage firm

a financial institution that facilitates the buying and selling of financial securities between a buyer and serve a clientele of investors

Berkshire Hathaway

a holding company owned by Warren Buffer that specializes in insurance-related companies but has a wide array of interests, making a conglomerate

Buying on margin

a risky way to pump up a potential return on an investment. It involves borrowing money from a broker to purchase an investment

Growth stock

a share in a company whose earnings are expected to grow at an above average rate relative to the market

S&P 500

a stock market index based on the market capitalizations of 500 leading companies publicly traded in the U.S stock market

DOW (DJIA)

a stock market index, it is an index that shows how 30 large publicly owned companies based in the United States have traded during a standard trading session in the stock market

TSX index

an index of the stock (equity) prices of the largest companies on the Toronto Stock Exchange

Limit order

an order placed with a brokerage to buy or sell a set number of shares for a certain amount of time and at a specified price or better

Bonds

certificates promising to repay a loan at a stated interest rate to the government or a business

Prospectus

disclosure document that describes a financial security for potential buyers. it commonly provides investors with material information about mutual funds, stocks, bonds and other investments

Securities and Exchange Comission

federal agency that holds primary responsibility for enforcing the federal laws and regulations

Liquidity

how quickly and cheaply an asset can be converted into cash

Mutual funds

investment companies that combine many investors funds to buy a large variety and quantity

Insider trading

is the illegal practice of trading on the stock exchange to one's own advantage through having access to confidential information

Hedge funds

privately actively managed investment funds. they invest in a diverse range of markets investment instruments, and strategies and are subject to the regulatory restrictions of their country

NASDAQ

second (and sometimes third) largest stock exchange by market capitalization in the world, just after New York stock exchange

Short selling

shares that you don't own, with the intention of re-purchasing or "covering" them at a lower price

Blue chip stocks

stocks in a well-established and financially sound company that has operated for many years and has a market capitalization in the billions

Common shares or common stock

stocks where, in public corporations, shareholders are entitled to vote at shareholder meetings

Hostile takeover

the acquisition of one company by another that is accomplished not by coming to an agreement with the target company's management

Ticker tape

the earliest digital electronic communications medium. It transmuted stock price information over telegraph lines

Venture capital

the money provided by investors to startup firms and small businesses with perceived long-term growth potential