Stock Market Terminology
Stock Market Terminology
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What is a Share
A share is a very small percentage of the company that you are investing in. When you buy a share, you are buying a very small percentage of the company you are investing in.
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What does it mean to buy or sell a share at Market Value
When you are buying or selling a share, there are options for how much you want to sell or buy the share for. When you buy or sell a share for market value, you are buying or selling that share for the price the stock is currently trading for on the stock market.
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What is a Limit Order
A limit order is a buy/sell order that specifies a maximum price to be paid or a minimum price to be received (the "limit price") for a stock. Only at the specified limit price or better will the order be filled. Execution is not guaranteed, though.
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What is a Stop Order
A stop order is an order to buy or sell a stock at the market price once the stock has traded at or through a specified price (the "stop price"). The order becomes a market order and is filled at the next available market price if the stock reaches the stop price.
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What is Short Selling
Short selling is borrowing a security from your brokerage whose price you anticipate falling and selling it on the open market. Your strategy is to later purchase the same stock, preferably at a lower price than you originally sold it for, and keep the difference after paying back the initial loan. In simpler terms, you are essentially selling a stock in hopes of buying it back at a lower price.
Video on Stock Terminology
Watch the video below where Ryan Schribner explains important Stock Market Terminology