Stock Market Terms

Invest - putting your money where it can grow 

Stock - a share in the company

Dividends - the amount of money paid by the company to its shareholders

Common Stock - the type of stock that is least prioritized when declaring dividends, mostly profit from price appreciation

Preferred Stock - the type of stock that is first prioritized when declaring dividends

Risk - the potential of gaining profits and losing your capital, the more the risk, the more the reward

Returns/Rewards - profits earned by investors in their investment either through dividends or price growth

Short Term - less than six weeks

Medium Term - six weeks to nine months

Long Term - more than nine months

Investors - people who invests their money with the expectation of gaining returns over longer timeframe

Traders - people who buy and sell stocks and earn from price growth over a shorter timeframe

Blue-Chip Stocks - stocks of the biggest companies in the country

Growth Stocks - stocks which have high growth potential

Value Stocks - stocks which have low P/E ratio

Speculative Stocks - stocks which are overpriced compared to its similar stocks

Defensive Stocks - stocks which does not decrease its price immediately even when the market is down

Penny Stocks - stocks which have small market capitalization and trade at very low price

Stock Market - where investors or traders buy and sell company stocks

Stock Market Index - a measurement of the value of the entire stock market or a particular industry in the market  

PSEi (aka PSE Composite Index) - the stock market index of Philippine Stock Exchange which consists of top 30 listed companies based on market capitalization 

Industry Index - the index of a group of companies which are classified based on their business activities (i.e. Financial, Holdings, Industries, Mining & Oil, Properties, Services)

Bullish - when a particular stock market or stock is uptrend

Bearish - when a particular stock market or stock is downtrend

Initial Public Offering (IPO) - when firms are selling their company shares for the first time in the public to raise capital

Market Value - the value at which a stock can be sold in the market

Unrealized P/L - profits or losses which are not yet realized until the investor has sold the stock

Buying Power - the available money an investor has in his account for buying stocks

Buy Order - a type of order when the investor wants to buy stocks

Sell Order - a type of order when the investor wants to sell stocks

Volume - number of shares bought and sold in a particular day

Bid - the prices at which the buyers want to buy a particular stock, arranged in descending order

Ask - the prices at which the sellers want to sell a particular stock, arranged in ascending order

Trade - made when the bid and ask price have matched

Brokers - firms who execute the buy and sell orders and get commission fees for every transaction

Portfolio - a group of financial assets such as stocks held by the investor 

Average Cost/Price - the price at which you bought the market plus the commission fees Shares - the number of stocks you bought

Board Lot - the standardized minimum and multiple number of shares to be traded for a particular stock, depends per price range

Stock Order - ordering stock, either buy or sell order  

Normal Orders - orders which follow the normal board lot

Oddlot Orders - orders which are less than the minimum board lot

Good to Day (GTD) - an option in ordering where your order will expire at the end of trading day when not fulfilled

Good to Week (GTW) - an option in ordering where your order will last for a week

Good to Month (GTM) - an option in ordering where your order will last for a month

Good to Cancel (GTC) - an option in ordering where your order will last until you cancel

Cash Dividends - dividends declared through cash

Stock Dividends - dividends declared through additional shares of stocks

Profits/Gains - the amount that an investor earns when he sells stocks at a price higher than his average costs

Losses - the amount that an investor losses in his capital when he sells stocks at price lower than his average costs  

Stock Split - when a company decides to split its stocks in a particular ratio to increase liquidity (i.e. 1 to 2)  

Reverse Stock Split - opposite of stock split, when a company decides to combine its stocks in a particular ratio to decrease number of shares (i.e. 2 to 1)

Most Active - most active stocks in a particular day in terms of volume traded

Top Gainers - list of stocks which has increased in price in a particular day

Worst Losers - list of stocks which has decreased in price in a particular day

Year to Date (YTD) - the period from the beginning of the year (January 1) to present

Investment Strategy - set of rules and behaviors an investor practices towards his investment portfolio 

Peso Cost Averaging - an investment strategy where you put the same amount of money into a particular stock in a regular schedule

Value Investing - an investment strategy where investors look for undervalued stocks

Growth Investing - an investment strategy where investors look for companies which have a high growth potential

Cut Loss - realizing your loss by selling the stock to save you from a bigger loss

Average Down - buying a stock for a lower price than your average cost  

Long Position - A long (or long position) is the buying of a security such as a stock, commodity or currency with the expectation that the asset will rise in value.  

Short Position - A short, or short position, is a directional trading or investment strategy where the investor sells shares of borrowed stock in the open market. The expectation of the investor is that the price of the stock will decrease over time, at which point the he will purchase the shares in the open market and return the shares to the broker which he borrowed them from.