Stock Market Glossary
Plain-English definitions for the investing terms you'll run into most often. Tap any term for a full one-page explanation.
ATR (Average True Range)
ATR measures a stock's average daily price range over a recent period — it's a volatility gauge, not a direction signal.
Bid-Ask Spread
The bid is the highest price a buyer will pay right now; the ask is the lowest price a seller will accept. The gap between them is the spread.
Bollinger Bands
Bollinger Bands wrap a stock's price between an upper and lower band; the bands widen when volatility rises and pinch tight when it drops.
Bull vs Bear Market
A bull market is a sustained period of rising prices; a bear market is a drop of 20% or more from recent highs.
Diversification
Diversification means spreading your money across many stocks, sectors, and asset types so no single investment can sink your whole portfolio.
Dividend
A dividend is a cash payment a company shares with its shareholders out of its profits, usually paid quarterly.
EMA (Exponential Moving Average)
The EMA is like the SMA but weights recent prices more heavily, so it reacts faster to new price moves.
ETF
An ETF (Exchange-Traded Fund) is a basket of stocks you can buy as a single ticker — SPY, for example, tracks the S&P 500's roughly 500 companies in one purchase.
Fibonacci Retracement
A Fibonacci retracement marks the levels — 38.2%, 50%, and 61.8% of a prior move — where a stock's price often pulls back before continuing its trend.
Golden Cross & Death Cross
A Golden Cross is when a stock's 50-day moving average crosses above its 200-day moving average, a classic bullish signal; a Death Cross is the opposite.
MACD
MACD (Moving Average Convergence Divergence) measures the difference between two exponential moving averages to gauge a stock's momentum.
Market Cap
Market capitalization is a company's share price multiplied by its total shares outstanding — it tells you the company's overall size.
Market Order vs Limit Order
A market order fills immediately at the best available price; a limit order only fills at your chosen price or better.
P/E Ratio
The price-to-earnings (P/E) ratio is a stock's share price divided by its earnings per share — a P/E of 20 means investors pay $20 today for every $1 of yearly profit.
RSI (Relative Strength Index)
RSI is a momentum indicator from 0-100; readings above 70 often signal a stock is overbought, and below 30 often signal it's oversold.
SMA (Simple Moving Average)
The SMA averages a stock's closing price over the last N days to smooth out daily noise and reveal the underlying trend.
Stochastic Oscillator
The Stochastic Oscillator compares a stock's current closing price to its recent high/low range on a 0-100 scale, similar to RSI.
Stock
A stock (or "share") is a tiny slice of ownership in a public company — if a company has 1,000,000 shares and you own one, you own one-millionth of it.
Support & Resistance
Support is a price level where buyers tend to step in (a floor); resistance is where sellers tend to appear (a ceiling).
Ticker
A ticker is the short symbol that identifies a stock on an exchange — AAPL for Apple, TSLA for Tesla, MSFT for Microsoft.
Trading Volume
Volume is the number of shares of a stock traded in a given period; big price moves on high volume are more trustworthy than the same move on low volume.
VWAP
VWAP (Volume-Weighted Average Price) is the average price a stock has traded at during the day, weighted by volume, and resets every session.