• Brad Collins

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

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Stock Market Lingo
Stock Market Lingo | Stock Trading Terms Every Trader Needs to Know

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