Yes, you are on the right site to know about the “Basic Stock Market Terminology for Beginners”. No worries, the terms are not complicated you will understand them easily in theory and also in practical. About my experience when I entered the stock market, at the start I found out many terms for the market that are just basic terms.
In this article, I will discuss some of the important basic stock market terms that are important for an individual to develop their career in the stock market. Well, as a beginner in the stock market you may find it difficult right from where to start the research for. First, get advice from some experts about the same and then make a step-by-step process to proceed ahead and to become experts in the market.
Okay, so let’s move further by discussing some basics about “What is Share Market?”
At any point, if you find it difficult to understand then you can also share the same thing and we will be glad to assist you with that.
What is Share Market?
- So, why did you want to make an entry into the stock market?
- Did you have the knowledge of what really is the stock market is and how does this work?
- I seem that now you are bored with my questions no worry let’s start the answers finally.
- The stock market is the place that acts as the exchange and that allows the traders or investors to buy or sell the shares of the particular companies that issue shares or that are listed in the exchanges.
- The buying and selling of the stocks can be done about one’s prediction that whether the prices of the shares will move upward or downward.
- The stock represents the equity of the company and that gives the shareholders to become the owners of the company when they buy the shares of the company.
- By which they also get rights to give votes, gets dividends, and many more benefits.
- The stock market has been set up for major two purposes:
- First, for the company so that the company can raise the capital they need in order to raise their business requirements.
- Secondly for the investors or the traders that look for the opportunity when they get the profits from the company they had bought and are listed in the stock exchange.
- Now, in the above I have discussed the word “Stock Exchange”, do you know what is it?
- If your answer is NO, then no issue I will discuss this first right.
What is Stock Exchange?
- Stock Exchange defines the platform where the trading of buying or selling or of the shares happens.
- In today’s, there is an electronic platform for the trader or investors to do the trading or investing in the stock market and the shares are directly transferred to their Demat account which is not physical but can be visible in the account.
- Before the invention of this platform, there used to be a place like wall street where, all of the brokers used to gather and used to sell the shares physically over there.
- If you want to know the Stock Trading more there are many movies associated with this and that will help you to know the market more.
- So, now let’s begin with the terminology for the Stock Market.
Also Check: Day Trading Strategies
Basic Stock Market Terms for Beginner
1. Bear
Bear terms as the Bear market that is the market condition which shows and makes the investors know that the economy is showing a downward trend. In which the expected prices are falling.
2. Bull
Bull terms as the Bull market this is also the market condition and this shows that the economy is moving in an upward trend. In which the expected prices are rising.
3. Open
In the Indian Stock Market, there are also timings for the market as there are timings for everything. The Stock Market opens at 9:15 AM on all the weekdays except the weekends and also opens on some special events and the traders or investors start their trading or investing from this time onwards.
Also Read - World Stock Market Timings
4. Close
The closing time for the Indian Stock Market is at 3:30 PM on all the weekdays except the weekends at this time all the trading or investing stops and continuous for the next proceeding day.
5. High
High refers to when the particular stock or index reaches the highest point than the previous one. That records high where the stock or the index have never reached with the comparison of the current market price. You can get the daily high, weekly high and 52 weeks high for the analysis part traders or the investors check this.
6. Low
Low is the opposite of high. It shows the lowest pricing point for the stock or Index.
7. Buy
Buy refers to buying the security of the shares or taking any position in any of the stocks or indexes.
8. Ask
Ask refers to the price at which the individual or the traders wants to sell their stocks or the particular security in order to make some profitable deals.
9. Sell
If the trader or the investors is making the losses or have achieved the goals then he sells the particular securities or the stocks.
10. Bid
The Bid refers to the price at which the individual or traders wants to buy their stocks or the indexes for and to make some profit from that.
11. Order
The order defines the buying or selling of a certain amount of the stocks or indexes that is confirmed by the investors or the traders.
12. Index
Index refers to the benchmark that is used by the traders or the investors in order to manage their portfolios.
13. Arbitrage
Arbitrage is about buying and selling the same security on different markets with different pricing points.
14. Ask-Bid Spread
Ask-Bid Spread is about the difference between the traders or investors of what they want to spend and what they want to get.
15. Limit Order
A limit order means the type of order which is executed at the prices that are placed for either buy or for sell.
16. Market Order
A market order means that the order will be placed as soon as possible at the current market price.
17. Volatility
Volatility defines as the stock movements and how fast stock moves upward or downward.
18. IPO
The full of IPO is Initial Public Offering that states about when the private company wants to become a public company this is the process they need to walk through.
19. Capitalization
Capitalization means the value that the market thinks it could be for the particular company,
20. Intraday Trading
Intraday trading tells about that the trading starts with the market opens and the positions are squared off on the same day as when the market closes down.
21. Broker
A broker is an identity that buys or sells the stocks on behalf of you.
22. Dividend
The portion of the company’s earnings that have been decided by them and that is shared with their shareholders are termed as Dividends.
23. Portfolio
The Portfolio is the gathering of all the stocks or indexes or the investments that are owned by the trader or investors.
24. Sector
A number of stocks in the same industry are defined as Sector.
25. Stock Symbol
Stock Symbol is the identity that is unique and gives the representation of the company that is listed in the exchanges of India.
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[ Also Read: How to earn stocks without a broker? ]