What does all this stuff mean?
Use this Glossary to find out...
Ask Price
The lowest price a dealer or seller is willing to accept. Also called the offering price.
Bid Price
The highest price a dealer or buyer is willing to pay.
Call
An option contract giving the owner the right (but not the obligation) to buy shares of stock at a predetermined price (called a strike price) on or before the expiration date of the contract.
Channeling Stocks
Stocks that trade within a certain range creating a pattern between a high and low price points for long periods of time, often becoming predictable.
Charting
An analysis technique to track price trends to determine patterns and price movement.
Day Order
A market order to buy or sell that expires if not executed before the end of that trading day.
Discount Broker
A brokerage house that charges lower commission rates for executing orders.
Expiration Date
The last day that an option can be exercised; after this date, the option expires worthless.
Full Service Broker
A brokerage firm that works for higher commissions to cover the cost of investment research and financial advice given to the client.
Good ‘Til Canceled (GTC) Order
An order placed by an investor that instructs the broker that the order shall remain in effect until it is filled (either bought or sold at a predetermined price), or until it is canceled by the investor.
Insider
Anyone having access to material corporate information. Regulations prohibit the trading by those possessing inside information.
In The Money
A "Call" option is said to be "in the money" when the current market price is higher than the strike price. A "Put" option is said to be "in the money" when the current market price is below the strike price of the option contract.
Limit Orders
A market order to buy, or sell a specific security at a specified price or for a specified time.
Buy Limit Order
For example, a stock is trading at $3.00 a share. You place a Limit Order to Buy at $2.50 a share. If the trading price goes to $2.50 or lower, the order is filled and you buy. If the stock stays above $2.50 a share, the order is ignored.
Sell Limit Order
For example, a stock you already own is trading at $2.00 a share. You place a Limit Order to Sell at $2.50 a share. If the stock trading price goes to $2.50 or higher, the order fills and you sell. If the stock price stays below $2.50 a share, the order is ignored.
Market Maker
A dealer willing to accept the risk of holding securities to facilitate trading in a particular security or securities.
Market Orders
A market order buys or sells the security at the current market price.
Option
The right to purchase or sell a specified number of shares of a security (stock) at a specified price on or before a specified date.
Out Of The Money
A "Call" option is aid to be "out of the money" if the current market price is lower than the strike price. A "Put" option is said to be "out of the money" if the current market price is higher than the strike price.
OTC "Over The Counter"
A securities market not conducted through a formal exchange. Securities traded via the telephone and computerized network linking OTC Security Dealers.
Paper Trade
Defined as a hypothetical trade, recorded and tracked on paper, not using currency.
Put
An option contract that gives the owner the right to force the sale of a certain number of shares of stock at a specified price, on or before a specified date.
Resistance Level
The upper level of a stocks trading range where there appears to be a limit on further price increases.
Stocks
The certificates representing ownership in a Corporation.
Stop Loss Order
A Stop Order placed to protect account value from a significant decline in the price of the stock.
Stop Limit Order
A type of Stop Order, which specifies the price at which the stock must trade.
Strike Price
The price at which an Option or Futures contract can be executed according to the terms of the contract.
Support Level
The lower level of a stocks trading range where there appears to be a limit on further price declines.
Ticker Symbol
A company’s abbreviation, using letters to designate a particular stock for trading transactions.
Trading Range
The range of difference between the support level and resistance level.
Trailing Stop (Profit Protection Stop)
The stop protects profits once the trade has moved into profitable territory. It keeps moving up with the profits, until the stock moves downward, triggering the sale.
Yield
An investor’s percentage return on securities investments.
