As with any career or industry, you do not suddenly become a masterful stock market trader overnight. You first establish a sound foundation with basic knowledge and, with much practice, you build on that knowledge and learn your way towards becoming the best.
So if you are a beginner, here are a few stocks trading terms that you need to know to understand even the simplest of stock exchange or market news.
This is a person or a firm that acts as an intermediary whenever somebody wants to buy or sell shares.
This would be the lowest price a seller would be willing to sell their stocks.
This means that this particular market is usually consistently down.
This is the opposite of a bear market. This means that this particular market is performing well and is increasing value.
Blue Chip Stock
These stocks are from big companies built on solid foundation. They are often the ones with large market capitalisation because they are well established and have been so for years. They often return plenty of dividends to their shareholders.
You do not buy stocks individually as if you buy retail items in a grocery store. Board lots determine the minimum amount of stocks you can buy from a certain company. They vary widely from many different offerings. Some companies may sell cheaply at 0.10 GBP per share but with a board lot of 1000.
This is the price of a stock at the end of a trading day.
This is a strategy for most stock traders where the idea is not to put all your eggs in one basket or risk everything on one endeavour. You buy shares from different companies across various industries to protect yourself in case one market crashes.
Besides the profits that your shares make by increasing value over time, having stocks from a company entitles you to dividends or a share of the enterprise’s profits. For some, dividends are a great way of making money without having to make any actual trade.
This is a list or record of all your investments, all the companies whose stocks you have bought, how many shares you have from each and their values, and how much gain or loss you are making over any single market.
Trading stocks can be an enjoyable, addictive, and rewarding experience. Invest in some of this basic knowledge today because you will never know when they will pay off in the future.