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Stock Market Glossary

40 terms, one page each. Search or filter by category.

Basics

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.

Blue-Chip Stock

A blue-chip stock is shares in a large, well-established, financially stable company — think Apple, Coca-Cola, or Johnson & Johnson.

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.

A dividend is a cash payment a company shares with its shareholders out of its profits, usually paid quarterly.

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.

An index fund is a fund built to track a market index like the S&P 500 exactly, rather than trying to beat it — low cost, broad diversification, no stock-picking.

IPO (Initial Public Offering)

An IPO is the first time a private company sells shares to the public, listing on an exchange so anyone can buy in.

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.

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.

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.

A stock split divides each existing share into multiple shares, lowering the price per share without changing what the company is actually worth.

A ticker is the short symbol that identifies a stock on an exchange — AAPL for Apple, TSLA for Tesla, MSFT for Microsoft.

Trading

52-Week High/Low

A stock's 52-week high and low are the highest and lowest prices it has traded at over the past year — quick reference points for where the current price stands.

Circuit Breaker

A circuit breaker is an automatic, exchange-wide trading halt triggered when the market falls too far too fast, giving traders a pause to react.

Float (Shares Outstanding)

A stock's float is the number of shares actually available for public trading, excluding shares held by insiders or locked up long-term.

Liquidity is how easily a stock can be bought or sold without moving its price — highly liquid stocks trade often with tight bid-ask spreads.

Pre-Market & After-Hours Trading

Pre-market and after-hours trading happen outside the normal 9:30am–4:00pm ET session — prices can move sharply on lower volume before most investors can react.

Short selling means borrowing shares to sell now, hoping to buy them back later at a lower price and pocket the difference — it profits when a stock falls.

A short squeeze happens when a heavily shorted stock rises sharply, forcing short sellers to buy shares to cover their position — which pushes the price up even further.

Stop-Loss Order

A stop-loss order automatically sells a stock once it drops to a price you set, capping how much you can lose on a trade.

Indicators

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.

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.

Candlestick Chart

A candlestick chart shows a stock's open, high, low, and close for each period as a single 'candle,' making price patterns easier to read at a glance than a plain line chart.

EMA (Exponential Moving Average)

The EMA is like the SMA but weights recent prices more heavily, so it reacts faster to new price moves.

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 (Moving Average Convergence Divergence) measures the difference between two exponential moving averages to gauge a stock's momentum.

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.

Support & Resistance

Support is a price level where buyers tend to step in (a floor); resistance is where sellers tend to appear (a ceiling).

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 (Volume-Weighted Average Price) is the average price a stock has traded at during the day, weighted by volume, and resets every session.

Fundamentals

Beta measures how much a stock tends to move compared to the overall market — a beta of 1.5 means it typically moves 50% more than the market, up or down.

Book value is what a company would theoretically be worth if it sold all its assets and paid off all its debts — its assets minus its liabilities.

EPS (Earnings Per Share)

EPS is a company's profit divided by its number of outstanding shares — it's the per-share profit figure that feeds directly into the P/E ratio.

A buyback is when a company repurchases its own shares from the market, shrinking the share count and boosting earnings per share for everyone who stays in.

Volatility measures how much and how fast a stock's price swings up and down — high volatility means bigger, faster moves in both directions.