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