Top must-know trading terms for beginners.


Annual Report informs shareholders about the company and includes information like the company’s cash flow and management strategy. 

Arbitrage refers to buying and selling the same security on different exchanges and at various price points.Averaging Down means adding to a losing position at a lower price.


Bear Market refers to a market environment where a major index or stock falls 20% or more from its recent highs. (The opposite of a bull market.)

Beta a measurement of a stock’s volatility compared to the overall markets.

Blue-Chip Stocks the stocks of large, industry-leading companies. (The expression came from blue gambling chips, the highest-valued chips in casinos.)

Bourse technically, it’s another name for the stock market. However, in today’s terms, it usually refers to the Paris stock exchange or a non-U.S. stock exchange.

Bull Market refers to a market in a prolonged period of increasing stock prices at least 20% above a recent low.

Broker a firm or person who executes your buy and sell orders for stocks or other securities. Bid the amount of money a trader’s willing to pay per share for a stock.


Day Trading buying and selling a stock or security within the same day. 

Dividend a portion of a company’s earnings paid to shareholders quarterly or annually.


Exchange a place where investors and traders buy and sell stocks. 

Execution the process when your buy or sell order completes.



  1. It can refer to a thin spread between the market maker’s bid and ask.
  2. It can also refer to the difference between a stock’s value and the amount a bank will recognize as collateral for a loan.

Index a benchmark used as a reference marker for traders and investors. 

Initial Public Offering (IPO) the first sale or offering of a stock by a company to the public. 


Leverage the process of borrowing capital from your broker to increase profits.


Margin — the difference between the loan amount and the securities price.

Moving Average — an indicator that shows a stock’s average price per share during a specific period.


Order — a trader’s bid to buy or sell a certain amount of stock. 

OTC Stocks — are traded electronically, but transactions are less transparent than the major exchanges.


Pink Sheet Stocks — the lowest tier of OTC stocks; they’re the sketchiest companies and typically trade under 5 per share.

Portfolio — a collection of assets that makes up a trader or investor’s portfolio. 


Quote — a stock’s latest trading price.


Rally — a rapid increase in the market’s general price or stock price.


Sector — a group of stocks in the same industry belonging to the same sector. 

Share Market — any market where traders can buy or sell a company’s shares. (The stock market is an example of a share market.)

Spread — the difference between a stock’s bid and ask price. 

Stock Symbol — an alphabetic symbol of one to four characters; it represents a publicly-traded company on a stock exchange. (Example: Apple Inc.’s stock symbol is AAPL.)


Volatility — the price movements of a stock or the stock market as a whole. 

Volume — the number of shares of stock traded during a period.


Yield — refers to the measure of the return on an investment, such as a dividend payment.