the Stock Market Glossary, you must find 10 word to
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Stock Market Glossary
American Stock Exchange (AME)
The American Stock Exchange (see: stock exchange) is the second
largest U.S. stock exchange. It is based in New York city and sometimes
called "the curb". Bud says: "Click on American Stock Exchange and
An increase in any investment's value. For example, if shares
of stock in a company you own have risen from five dollars to ten dollars,
it has "appreciated."
Term describing a long-run, downward-moving securities market.
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.
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.
The last line of a company's profit and loss ledger sheet.
The bottom line usually refers to the net profit or loss of a company at
any given time.
An agent who handles the public's orders to buy and sell stocks,
commodities or other property. Full service brokers are those that provide
a wide range of investment services, research and advice. A full service
account representative usually works on a commission basis, thereby generating
income on the number of their clients' trades. Discount brokers are not
in the business of giving investment advice. They usually work on salary,
limit their services to trade executions and collect substantially lower
fees. Example: E*Trade Securities
Term describing a long-run, upward-moving securities market.
A fee charged by a broker for their service in facilitating
an investment transaction.
Equity, or ownership, in a corporation. Stockholders participate
in a company's profits or losses through dividends and changes in the stock's
A business organization that, for tax purposes, is a legal
entity. A corporation has limited liability (owners can lose only what
they invest), easy transfer of stock, and continuity of existence.
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.
The highest price that was paid for a security during a certain time
period. This can be expressed daily, weekly, monthly, or for a 52 week
period. For example, the high for the day was $20, but the high for the
year was $30.
Any knowledge about a company, its products, or securities not generally
available to the public gained from a source inside the company. It is
illegal for anyone to makes a securities trade based on what they believe
to be inside information.
1) Money charged by a lender to a borrower for the use of his or her
money. 2) Payment on an investment made at periodic intervals.
Anything of value purchased to provide capital appreciation and/or
income. Examples include stocks, bonds, mutual funds, unit investment trusts,
certificates of deposit, money market funds and collectibles. Investments
may also include artwork, antiques and real estate.
A financial obligation or debt.
An order to a broker to buy a certain stock (future, etc.) only if
its price falls to a specified level or to sell a stock only if the price
rises to a specified level.
The lowest price a security or commodity has reached in a certain period
of time such as a daily low or annual low.
NASDAQ (National Association of Securities Dealers Automated
The NASDAQ National Market consists of over 3,000 companies that have
a national or international shareholder base, have applied for listing,
meet stringent financial requirements and agree to specific corporate governance
standards. To list initially, companies are required to have significant
net tangible assets or operating income, a minimum public float of 500,000
shares, at least 400 shareholders, and a bid price of at least $5.
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."
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 (Standard & Poor's 500 Stock Index)
An index of 500 stocks widely traded on the New York Stock This index
is used as a measure of performance of the overall market. Considered by
many to be a much more accurate picture of the market in general.
A transaction fee or commission paid for an investment instrument.
Commonly referred to as the "load" in a mutual fund.
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,
A unit representing a measure of ownership in a corporation. See: stock.
An organization that provides its members with the place and resources
to buy and sell stocks. Example: American Stock Exchange
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.
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.
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.
A ticker is a trading screen information display showing the current
price, volume, etc. of a particular stock, option, future, etc.
A ticker symbol represents a particular security (company, option,
etc.) on the exchange it is trading on and is used to retrieve information
about that security from that exchange. For example: the symbol "f" on
the New York Stock Exchange will bring you information about Ford Motor
Company. Ticker symbols can be used to retrieve information from a financial
publication such as your daily paper's business section or the Wall Street
Journal. Today, ticker symbols can be submitted to an electronic ticker
quote retrieval system to find information about a particular security
The total number of shares, bonds, or other units of a security traded
in a certain time period.
A street in the city of Manhattan, New York where several major brokerage
firms and stock exchanges are located.