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Glossary of some of the terms used on this website

All Or None - AON
A condition used on a buy or sell order to instruct the broker to fill the order completely or not at all. If there is insufficient supply to meet the quantity requested by the order then it is canceled at the close of the market.

AMEX
Stock exchange with the third highest volume of trading in the U.S. Located at 86 Trinity Place in downtown Manhattan. The bulk of trading on AMEX consists of index options (computer technology index, institutional index, major market index) and shares of small to medium-sized companies are predominant. Recently merged with Nasdaq

Bear Market
Term describing a long-run, downward-moving securities market.

Blue-Chip Stock
Large, financially strong corporations with little investment risk, and good records of earnings and dividend payments. Traditionally the stock shares of these corporations trade on the New York Stock Exchange or other major exchanges and generally trade at a price of $50.00 and above.

Bond
A bond is a debt instrument issued by an entity for the purpose of raising capital. A bond might be issued by a corporation or other entities such as state or municipal governments. Bonds normally have a set maturity (term) and interest (coupon) rate associated with them.

Bull market
Term describing a long-run, upward-moving securities market.

Common stock
Equity, or ownership, in a corporation. Stockholders participate in a company's profits or losses through dividends and changes in the stock's "market value."

Day Trading
Day traders rapidly buy and sell stocks throughout the day in the hope that their stocks will continue climbing or falling in value for the seconds to minutes they own the stock, allowing them to lock in quick profits. Day trading is extremely risky and can result in substantial financial losses in a very short period of time.

Dividend
Payment made to the owners of common or preferred stock shares in a corporation. Cash dividends are paid out of corporate earnings and the percentage of earnings paid out varies from corporation to corporation. Generally, the percentage of corporate earnings paid out runs from 40 to 80 percent, but many times is zero, where the corporation keeps its entire earnings. A stock dividend pays the shareholders additional shares of stock or a fraction thereof, rather than cash. It is not mandatory for a company to distribute dividends.

Dow Jones Industrial Average (DJIA)
A stock index (one of many) commonly used as an indicator of changes in the general level of the stock market or stock prices in the United States. In this index, there are 30 industrial stocks thought to be representative of industrial stocks in general. Dow Jones & Company , a financial and investment publisher based in New York, also calculates averages for utility stocks, transportation stocks and bonds. Just a few of the 30 companies in the DJIA are: American Express, AT&T, Bethlehem Steel, Boeing, Chevron, Disney, Coca-Cola, General Motors and IBM.

Long Term Trading
Long term trading involves holding a stock for longer periods of time. This is often done with the view that a company’s value will increase over time. Long term trading requires less time than day trading or short term trading.

Market Open/Close Price
It is the last price a particular stock sold for the previous day.

Market value
The price at which a security is trading and could presumably be purchased or sold.

New York Stock Exchange
The New York Stock Exchange is located on Wall Street in New York City. It is the largest securities exchange in the United States. Bud says: "Visit the New York Stock Exchange now."

Nasdaq
National Association of Securities Dealers Automatic Quotation System - An electronic quotation system that provides price quotations to market participants about the more actively traded common stock issues in the OTC market.

Penny Stock
A stock that trades at a relatively low price and market capitalization, usually outside of the major market exchanges. These types of stocks are generally considered to be highly speculative and high risk because of their lack of liquidity, large bid-ask spreads, small capitalization and limited following and disclosure. They will often trade over the counter through the OTCBB and pink sheets.

Preferred stock
Stock that receives preferential treatment over common stock with respect both to dividends and claims on assets in the event that the corporation goes out of business.

S&P 500 Composite Index
Index of 500 widely held common stocks that measures the general performance of the market.

S&P Rating
Rating service provided by S&P that indicates the amount of risk involved with different securities.

Selling short
The reverse of the usual stock market technique, short selling is based on the anticipation that a particular security price will go down. The practice of short selling involves borrowing shares of a security from your broker and immediately selling them at the current price. Then, as the price of that security declines, you buy back an equal number of shares on the open market and use them to cover the shares you borrowed from your broker, and make a profit. For instance, if you sell short 100 shares of XYZ Corporation at $50.00 a share and the price of the stock drops to $35.00, your profit is $15.00 a share, or $1500.00. Short sellers lose when the price of the stock ascends rather than descends. Theoretically, there is more risk involved with short selling because a stock price could continue to rise forever. A stock purchased at $10.00 a share can only fall to zero. A stock sold short at $10.00 could go to $20.00, $30.00, $40.00, etc.

Short Term Trading
Short term trading involves holding a stock for several days. It is less time consuming than day trading but is still relatively risky given the short time frame of holding the stock.

Stock Exchange
An organization that provides its members with the place and resources to buy and sell stocks. Example: American Stock Exchange

Stock Market
The market in which shares are issued and traded either through exchanges or over-the-counter markets. Also known as the equity market. This market can be split into two main sections: the primary and secondary market. The primary market is where new issues are first offered, with any subsequent trading going on in the secondary market.

Stock Price Change
The change in stock price is recorded in points. Each full point is measured by dollars. The change in stock price is the difference between the opening stock price and the current price the stock is selling at. For example, if stock XYZ opened at 10 dollars even and was now selling for 11.50 it would be up +1.50 (1 and a half). The +1.50 is the change in stock price.

Stock Split
An increase in the number of outstanding shares in a corporation. This is usually brought about by the division of existing shares. For example, a two-for-one split means that shareholders will receive two new shares for each old share, making a total of three. Alternately, a reverse stock split brings about the decrease in the numbers of shares in a corporation.

Stock symbol
A unique lettering system assigned to a particular stock or mutual fund. For U.S. securities, one, two and three letter symbols indicate that the security is listed and trades on an exchange. NASDAQ traded securities have a four or five letters assigned to them. If a fifth letter appears on a NASDAQ security, it identifies the issue as other than a single issue of common stock or capital stock. Stock symbols are used so people can easily and quickly identify stocks without having to look or write sometimes long or similar company names.

Stop Order
An order to buy or sell a security conditioned on a specific price. This order is very often referred to as a "stop loss" order. because it prevents the security from falling below a certain price.

Ticker
A ticker is a trading screen information display showing the current price, volume, etc. of a particular stock, option, future, etc.