IMPORTANT TERMS OF STOCK MARKET

  • Agent:

An agent is a brokerage firm which does buying/selling of shares on behalf of the investor in the stock market.

  • Ask/Offer:

It refers to the lowest price at which the owner of the equity shares is ready to sell the shares in the stock market.

Broker

A person who purchases or sells an investment on behalf of the investor/trader in return for a commission.

Bear Market It refers to a period in which the prices of equity shares fall consistently. You may look at it like beginning of a downward trend in the stock market.

Bull Market: An opposite of bear market, a bull market situation in which the prices of the stocks are increasing over a prolonged period of time. A single stock and a sector can be bullish at one time and bearish at another time.

Bid:

It is the highest price that the buyer of a stock is ready to pay for a particular stock.

Face value:

It relates to the amount of money or the value in cash that the holder of a security will obtain from the issuer of the security when the security matures at the specific date.

Limit Order –

A limit order is a type of order which executes at the price placed for buy or sell.

Market Order –

A market order is a type of order which executes as quickly as possible at the market price.

Day Order –

A day order is a direction to a broker to execute a trade at a specific price that expires at the end of the trading day if it is not complicated.

Authorized Shares –

This is the total number of shares that a company can trade.IPO – It is an Initial Public Offering that happens when the private company becomes a publicly traded company.

Secondary Offering –

This is another offering in order to sell more stocks and to raise more money form the public

Portfolio –

A collection of investments owned by you.

Margin –

Margin account lets a person to borrow money from the broker to buy shares.

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