Why you should know about Stock Market terminology?
Understanding stock market jargon will improve your understanding of Stock markets Related terms and help you make wise financial choices. You can control your assets and properly predict market trends. It also assists you in analyzing expert advice, interpreting information, and coming to a well-informed decision.
The task of comprehending the stock market can be viewed as difficult. Although some concepts and terminology will frustrate you, knowing what they mean will undoubtedly be helpful.
These stock market terminology will broaden your understanding of the market and help you develop into a more knowledgeable and successful investor.
So let’s learn these 25 key stock market words that every investor has to understand:
Annual Report
Every corporation creates an annual report each year in an effort to impress their shareholders. A company’s annual report contains a wealth of information, from cash flow to managerial philosophy.
Many people read the annual report to assess the viability of the business and its financial standing.
Arbitrage
Arbitrage is the practise of buying something, such as foreign currency, from one location and selling it to another location where the foreign currency will fetch a greater price than the initial location.
For instance, if a stock is trading for $20 on one market and $21 on another, the trader must purchase shares at $20 on one market and sell them for $21 on the other market in order to profit from the price difference between the two markets.
Averaging Down
When an investment is averaged down, more stock is purchased when the price of a particular stock declines. The average price paid for your particular stock drops as a result.
This approach is employed by many investors who believe that the general consensus of a particular company is incorrect and who anticipate that the stock price will increase as a result.
Bear Market
A broker is a person that purchases and sells investments on your behalf and receives a commission or fee in return.
Dividend
A dividend is the term used to describe the quarterly or annual distribution of a specific amount of a company’s profit to its shareholders or stockholders. You won’t likely receive any dividends if you invest in penny stocks because not every company pays them.
Sensex
The Bombay Stock Exchange’s Sensex index is a number that represents all the relative share prices listed there.
Nifty
The principal and fundamentally based stock market index for the Indian equities market is the Nifty 50 Index, also known as the National Stock Exchange of India.
The Nifty 50 is one of two stock indices that are primarily used in the stock market, and it comprises of 50 Indian corporate stocks in 12 distinct sectors.
Quote
Information that is provided in a quote is contained in the stock’s most recent trading prices. Unless you’re a real stockbroker using an established trading platform, the quote may occasionally be delayed by 20 minutes.
Share Market
A share market is a marketplace where shares of a certain business can be bought and sold. A clear illustration of a share market is the Stock Market Related Terms.
Bull Market
It is a market where investors discuss how the stock market is doing in an upward trend or when the values of several equities are rising at the same time.
Bid Price
A bid price is nothing more than the sum you wish to spend on a specific share.
Face value
Each share that a firm issues has a face value. This refers to the stock’s worth at the time it was issued. The face value of the stock is determined by the issuing business, and it is fixed over time. Don’t get alarmed if you hear someone utter par value rather than face value. The meaning of both terms is the same.
Bottom/peak
A stock’s bottom price within a specific time period is referred to as a bottom in stock market slang. Similar to this, a peak is the highest price a stock has experienced during a specific time frame. These two ideas are frequently used by technical analysts to forecast the future price of a stock.