Stock Market Terms What does everything mean?

52-Week High The highest price for a stock during the past year.

52-Week Low The lowest price for a stock during the past year.

Ask The price at which a holder of a stock is willing to sell.

Bid The price at which someone is willing to buy a stock.

Change The dollar difference between the preceding day’s closing price and the most recent price.

Day’s High The highest price of the stock during the current day’s trading.

Day’s Low The lowest price of the stock during the current day’s trading.

Dividends Paid Per Share The cash payment per share made by the company to its shareholders.

Earnings Per Share (EPS) Net income divided by common shares outstanding.

Exchange The market place that provides for the trading of the listed stocks.

Last Trade The current trading price of one share of a company’s stock.

Market Capitalization (Market Cap) The value of a company’s outstanding shares, as measured by shares times current price.

Moving Average An average calculated every new period by putting in latest value and taking out oldest value of previous period.

NASDAQ (National Association of Securities Dealers Automated Quotation) The largest market without a central exchange that is broker/dealer-based. Trading is done using telephones and electronic terminals.

NYSE (New York Stock Exchange) The largest stock market based on market capitalization.

Open The price paid in a stock’s first transaction of the current trading day.

P/E Ratio Also known as the P/E multiple, this is the latest closing price divided by the latest 12 months’ earnings per share.

Percent Change The percentage difference between the preceding day’s closing price and the current price.

Previous Close The price of the stock at the end of the previous day’s trading session.

Shares Outstanding The total number of a company’s publicly traded shares.

Volume The total shares of a stock traded on the most recent trading day.

Yield The dividend paid on a given stock based on its current price.

Profit Whatever remains after subtracting a company’s cost from its revenue

Blue Chip Stock A large, stable company with a track record of quality and profitability.

Bull Market A prolonged period of rising stock prices

Bear Market A prolonged period of falling stock prices

Diversification Reducing risk by combining different investments.

Commission A fee that brokers earn by completing trades for investors

Dollar Cost Averaging Averaging the cost of multiple trades (buying or selling) of the same stock over time.

Entrepreneur Someone who starts, manages, and bears the risks of owning a business.

Liquidity How easily something can be exchanged for cash

AMEX American Stock Exchange The third largest stock market in the U.S., with the trading floor in New York City.

Margin Buying Using money borrowed from a broker to buy stocks

Stock Symbol A grouping of one to four letters in place of a company’s name

Broker A business or person that buys on behalf of a customer and is paid a commission for this service

Long Position The condition of owning stocks. The value of a long position is a stock’s current share price multiplied by the number of shares owned.

Stock Split Replacing each share of stock with a larger number of lower priced shares but keeping the total value of one’s investment unchanged.

Quote The bid or ask price quoted for a stock at a given time

RISK The likelihood of loss

S&P 500 A popular measure of stock prices consisting of 500 large companies

Dow Jones Industrial The best-known measure of stock prices consisting of 30 large, well-known companies