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Basic Financial Terms:
Stock - A share
of ownership in a company that can be bought or sold
Large-Cap Stock
- Shares of ownership in a business with over $5 billion
in assets. Stocks of a large, well known national corporation
that has performed well historically are often called
a "Blue Chip Stock."
Small-Cap Stock -
Shares of ownership in a business with under $75 million
in assets. These are usually from small, not-well-known
corporation that may not have a long record of historical
performance
Mutual Fund
- A professionally managed collection of
investments including stocks, bonds, and real estate.
NASDAQ (Composite Index):
A market-value weighted index of all common stocks listed
on NASDAQ(National Association of Securities
dealers Automated Quotations System). Web
site: http://www.nasdaq.com
DOW (Dow Jones Industrial
Index): A price-weighted average of 30 actively
traded blue chip NYSE stocks. Web
site: http://www.dowjones.com
S&P (Standard and Poor's
500): A market-value weighted index of 500
blue-chip stocks. Web site:
http://www.standardpoor.com
Trading Survival
Terms:
Broker: Your agent who
puts you in touch with the dealer and market maker who sells you the
stock. Brokers charge you a fee for helping you execute your
trades.
Dealer: Buys and sells
securities(stocks)
for a fee. A middle-of-the-trade agent.
Market Maker: A dealer
in the OTC
(over-the-counter)market ready to buy specific securities at
bid prices and sell
at ask
prices.
Shares: shares are securities
offered for public sale / ownership by corporations
Bid Price: Highest
price a market maker is willing to buy a security
Ask Price: Lowest
price a market maker is willing to see a security
Trade (buy / sell):
Purchase or sell of a security
Portfolio: Sum total
of your securities holdings
P/E Ratio:
Price-to-earnings ratio. A ratio of the relationship between
the price of a stock and earnings per share of that stock.
Misc Terms:
NYSE: Oldest and
largest stock exchange in the U.S., located in New York.
Web site: http://www.nyse.com |