Stock Market Dictionary
Your guide to financial words and phrases.
4
E.g., "Your company matches 50% of your contributions up to 6% of salary. Free money you shouldn't leave on the table!"
A
E.g., "A company's assets are listed on its balance sheet."
E.g., "A balanced asset allocation might be 70% stocks and 30% bonds."
B
E.g., "It's tougher to make a profit in a bear market."
E.g., "A beta of 1.5 means the stock moves 50% more than the market."
E.g., "Many people buy Bitcoin hoping its value will increase over time."
E.g., "I use Robinhood as my online broker to trade stocks."
E.g., "Investors were happy during the bull market as their portfolios grew."
C
E.g., "If you buy a stock for $50 and sell it for $75, your capital gain is $25."
E.g., "You put $1,000 in a 1-year CD at 5% interest. You can't touch it for a year, but you'll earn $50 guaranteed - better than a regular savings account!"
E.g., "Invest $1,000 at 10% annual return. Year 1: $1,100. Year 2: $1,210 (earning on the $100 gain too!)"
E.g., "The stock market crash of 1929 was a major historical event."
E.g., "Bitcoin and Ethereum are examples of cryptocurrencies."
D
E.g., "The stock's daily high was $152.50 before it closed lower."
E.g., "The daily low for the tech company was surprisingly stable."
E.g., "Day trading requires constant market monitoring and quick decisions."
E.g., "Diversification is important so that you don't have all your eggs in one basket."
E.g., "Some companies pay a dividend to their shareholders every quarter."
E.g., "Investing $200 every month in an ETF, buying more shares when prices drop and fewer when they rise."
E
E.g., "The SPDR S&P 500 ETF (SPY) is one of the most popular ETFs."
E.g., "The company's strong earnings report caused the stock price to rise."
E.g., "Microsoft reported earnings per share of $3.05 last quarter."
E.g., "If a company makes $1 million profit and has 1 million shares, the EPS is $1."
E.g., "If your monthly expenses are $2,000, aim for $6,000-$12,000 in a high-yield savings account for emergencies."
E.g., "SPY is an ETF that tracks the S&P 500 and can be traded throughout the day."
E.g., "A 0.05% expense ratio means you pay $5 annually for every $10,000 invested. Lower is better!"
I
E.g., "The tech startup is planning its IPO for next year."
E.g., "An S&P 500 index fund owns shares of all 500 companies in that index."
E.g., "An S&P 500 index fund owns pieces of all 500 largest U.S. companies in one simple investment."
L
E.g., "A company must manage its assets and liabilities carefully."
E.g., "Buying stocks at age 20 and holding them until age 40 is long term growth - you give your money time to multiply."
M
E.g., "Apple has a market cap of over $3 trillion."
E.g., "The Vanguard S&P 500 mutual fund tracks the performance of 500 large companies."
N
E.g., "Many of the world's biggest companies are listed on the NYSE."
O
E.g., "I bought call options on Tesla, betting the price would rise."
P
E.g., "Tesla's P/E ratio is 50, meaning investors pay $50 for every $1 of earnings."
E.g., "Penny stocks are considered very risky investments."
E.g., "It's wise to review your investment portfolio regularly."
R
E.g., "Contribute $6,000 of after-tax money. In 30 years, withdraw $50,000+ completely tax-free!"
S
E.g., "As a shareholder, you get to vote on certain company decisions."
E.g., "Investors who short sold GameStop lost billions in 2021."
E.g., "Buying a stock on Monday and selling it Friday for a quick profit is short term growth - it's faster but riskier."
E.g., "I bought 100 stocks of Apple Inc."
E.g., "She decided to buy stock in a company she believes in."
E.g., "In the past, investors received physical stock certificates."
E.g., "My stockbroker advised me to diversify my investments."
E.g., "I set a stop loss at $90 to protect against further drops."
T
E.g., "To find a stock, you just need to know its ticker symbol."
E.g., "He made a successful trade, selling the stock for more than he paid."
V
E.g., "Tech stocks often have high volatility, while utility stocks tend to have low volatility."
E.g., "Apple had unusually high volume today with 100 million shares traded."
W
E.g., "Wall Street is often used to refer to the entire U.S. financial industry."
