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Stock Market Terminology
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Stock Market Terms
Aa
American-Style Options
Options that can be exercised any time during their lifetime. These are also known as open options.
Annual Report
A publication, including financial statements and a report on operations, issued by a company to its shareholders at the company’s fiscal year-end.
Arbitrage
The simultaneous purchase of a security on one stock market and the sale of the same security on another stock market at prices which yield a profit.
Assets
Everything a company or person owns, including money, securities, equipment and real estate. Assets include everything that is owed to the company or person. Assets are listed on a company’s balance sheet or an individual’s net worth statement.
At-the-Money
When the price of the underlying equity, index or commodity equals the strike price of the option.
Averaging Down
Buying more of a security at a price that is lower than the price paid for the initial investment. The aim of averaging down is to reduce the average cost per unit of the investment.
Bb
Basis Point
One-hundredth of a percentage point. For example, the difference between 5.25% and 5.50% is 25 basis points.
Bear Market
A market in which stock prices are falling.
Beta
A measurement of the relationship between the price of a stock and the movement of the whole market.
Better-Price-Limit Orders
An order with a limit price better than the best price on the opposite side of the market. A better-priced buy order has a limit price higher than the best offering. A better-priced sell order has a limit price lower than the best bid. These are available only at the opening.
Bid
The highest price a buyer is willing to pay for a stock. When combined with the ask price information, it forms the basis of a stock quote.
Block Trades
Trades greater than or equal to 10,000 shares in size and greater than or equal to a certain value in monetry term.
Blue Chip Stocks
Stocks of leading and nationally known companies that offer a record of continuous dividend payments and other strong investment qualities.
Bonds
Promissory notes issued by a corporation or government to its lenders, usually with a specified amount of interest for a specified length of time.
Book
An electronic record of all pending buy and sell orders for a particular stock.
Booked Orders
Orders that do not trade immediately upon entry. These orders are also known as outstanding orders.
Broker or Brokerage Firm
A securities firm or a registered investment advisor af |
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