Economics Stock Market Vocab

Bear Market

Bad Market

Bull Market

Good Market

Preferred Stock

a class of ownership in a corporation that has a higher claim on the assests and earnings than common stock.

Public Company

a company that has issued securities through an initial public offering (IPO) and is traded on at least one stock or in the over the counter market. Being a public company the market determines the value of the entire company through daily trading.

Dividend

a distribution of company's earnings, decided by the board of directors.

NASDAQ

a global electronic marketplace for buying and selling securities, as well as the benchmark index for the U.S. technology stocks.

Primary Markets

a market that issues new securities on exchange

Secondary Markets

a market where investors purchase securities or assets from investors

Exchanges

a marketplace in which securities, commodities,derivatives and other financial instruments are traded

Yield

a method of quoting the price of a fixed income security as a yield percentage, rather than in dollars.

Big Board

a nickname for the NYSE, located on 11 Wall Street, New York City. Oldest stock exchange in the US

Common Stock

a security that represents ownership in a corporation. Holders of common stock exercise control by electing a board of directors and voting on corporate policy.

Commission

a service charge assessed by a broker or investment advisor in return for providing investment advice and/or handling the purchase or sale of security

NYSE

a stock exchange based in NY, considered the largest equities based exchange in the world based on total market capitalization of its listed securities

Penny Stocks

a stock that trades at relatively low price and market capitalization

Disposable Income

amount of money that a household has for spending and saving after income taxes

Income Stocks

an equity security that pays regular, often steadily increasing dividends

Cyclical Stock

an equity security whose price is affected by ups and downs in the overall economy.

Brokers

an individual or firm that charges a fee or commission for executing buy and sell orders submitted by an investor

Investment Banker

an individual who works in a financial institution that is in the business primarily for raising capital for companies, government and other entities, or who works in a large bank division that is involved with these activities.

Limit Orders

an order placed with a brokerage to buy or sell a set number of shares at a specified price or better.

Good Till Canceled

an order to buy or sell a security at a set price that is active until the investor decides to cancel it or the trade is executed

Day Order

an order to buy or sell security that automatically expires the day the order was placed

Technology Stock

company engaged in a technology related business

Defensive Stocks

company whose sales and earnings remain relatively stable during both economic upturns and downturns

Fixed Expenses

costs of owning and operating property that are not discretionary, do not change from month to month. EX: Realty taxes, insurance costs

P/E

expected value of new business opportunities available to a business

Long Position

holding an asset for an extended period of time.

Open Cry Auction

method of trading on a financial market where people shout of their bids and offers, rather than trading online or using the phone

Private Company

owned by either non-government organizations or by small number of shareholders. Ownership is private

Mutual Funds

pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and similar assets.

Over the Counter Bulletin Board

regulated electronic trading service offered by the National Association of Securities Dealers that show real time quotes, last sale prices and volumes information over the counter equity securities.

Growth Stocks

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

Blue Chip Stocks

stock of a large, well0established and financially sound company that has operated for many years. Typically has a market capitalization in the billions. (Household name)

Investing

the act of committing money or capital with the expectation of gaining more money

Earnings

the amount of profit that a company produces during a specific period.

Range

the difference between the low and high prices for a security or index over a specific time period.

Initial Public Offering (IPO)

the first sale of stock by a private company to the public

Volume

the number of shares or contracts traded in a security or an entire market during a given period of time.

Short Selling

the sale of a security that is not owned by the seller, or that the seller has borrowed.

Short Position

the sale of borrowed security, commodity or currency with expectation that the asset will fall in value

AMEX

the third largest stock exchange by trading volume in the United States

Market Capitalization

the total dollar market value of all of the company's outstanding shares.

New York Mercantile Exchange

the worlds largest physical commodity futures exchange

Curbside Trading

trading that occurs outside the general market regulations.

Stock

type of security that signifies ownership in a corporation and represents a claim on part of the corporations asses and earnings.

Listing Requirements

various standards that are established by the stock exchange