Stock Market Lingo
Updated: May 2
Below are some very common stock market lingo you should familiarize yourself with before trading in the stock market.
52 week high- A 52 week high is the highest price that a stock has traded at in the last year. Many investors use 52 week highs as a factor in determining a stock's current value and as a predictor of future price movements.
After Hours Trading- After-hours trading is buying and selling of stocks that takes place after normal trading hours. Trading occurs through an electronic market between 4:05 p.m. and 8:00 p.m.
Pre Market Trading- Trading occurs between the hours of 4:00am and 9:30am
Analyst Rating- Analyst ratings or stock ratings, such as “Buy”, “Sell”, and “Hold” are an evaluation of a stock's expected performance and/or it's risk level as determined by a rating agency or brokerage firm
Bear Market- A bear market is defined as a market that declines by 20% or more over at least a two-month timeframe.
Bull Market- A bull market occurs when a particular asset class is rising in value. This encourages buying, which then causes the asset class to continue to rise.
Options Trading- Options trading is the sale of a contract between a buyer and a seller in which the buyer of the contract is purchasing the right, but not the obligation, to buy or sell a quantity of a security at a specified price on or before a specified date
Oversold- An asset is considered to be oversold when it is trading at a price that is lower than its perceived intrinsic value.
Pattern Day Trader- One of the most common rules that throw new traders off is the PDT rule, also known as the Pattern Day Trader rule
Price Target- A price target is an investment analyst’s or adviser’s estimate of the future price level of an asset, such as a stock, futures contract, commodity or exchange-traded fund (ETF).
Put Option- A put option is a financial contract between a buyer and a seller. The owner of the put buys the right, but not the obligation, to sell the buyer of the contract 100 shares of a given stock at an agreed-upon price on or before the option's expiration date.
Call Option- The owner of the call option, an investor is buying the right, but not the obligation, to purchase a specific number of shares of a company’s stock at an agreed upon price.
Blue Chip Stocks- Blue-chip stocks are known for their quality and stability. Although there is no single definition, investors typically agree that a blue-chip stock has a market capitalization of over $5 billion dollars