Stock Market Glossary

A security representing ownership in a corporation

A person or entity that owns shares in a company

When a private company first sells shares to the public

Stock Price × Total Shares Outstanding = Company's market value

An index of 500 largest US publicly traded companies

A stock exchange known for technology and growth companies

Stock Price ÷ Earnings Per Share = How many years of earnings equal the price

Stock Price ÷ Book Value Per Share = How many times book value

Net Income ÷ Shares Outstanding = Profit per share

Net Income ÷ Shareholders' Equity × 100 = Return on invested capital

Net Assets ÷ Shares Outstanding = Asset value per share

Annual Dividend Per Share ÷ Stock Price × 100 = Income return

P/E Ratio ÷ EPS Growth Rate = Growth-adjusted valuation

Purchasing shares of a stock

Disposing of shares you own

Borrowing shares to sell now and buy back later at a lower price

An order to buy/sell at a specific price or better

An order to buy/sell immediately at the current market price

Profit from selling an asset for more than you paid

Selling to limit losses when price falls to a set level

Selling to lock in gains when price reaches target

A portion of company profits paid to shareholders

The cutoff date—buy before this to receive the upcoming dividend

Dividends ÷ Net Income × 100 = Percentage of earnings paid as dividends

Stocks that consistently pay dividends

Evaluating a stock by analyzing financial statements and business model

Using price charts and patterns to predict future movements

Average price over a specific period, plotted on a chart

When short-term moving average crosses above long-term MA

Price levels where stocks tend to stop and reverse

A market condition where prices are rising or expected to rise

A market condition where prices are falling or expected to fall

Automatic trading pause when markets fall sharply

Shares of large, well-established, financially sound companies

Very low-priced shares, typically under $5

When a stock is removed from a stock exchange

Borrowing money from your broker to buy stocks

A fund that trades like a stock and tracks an index or sector

A measurement of a section of the stock market