Stock Market Terms Standard 3.2 Apply the concepts of buying and selling stock
Objectives: TSW define the basic terminology for buying and selling stock by using them in written form. TSW display their understanding of buying and selling stock through the simulation game How the Market Works buy spending at least three fourths of their $100,000 portfolio.
Two Types of Stock Common Stock Preferred Stock
Common Stock Shares or units of ownership in a public corporation Basic form of ownership 5 ways common stock values can be changed The dollar value increases or decreases Stock split occurs– shares owned by existing stockholders are split into larger numbers of shares A merger between two companies Dividends are paid
Preferred Stock Shares that pay fixed dividends and have priority over common stock Dividends are stated as a percentage known as par value A fixed value on the stock certificate Less risky than common stock
Reading Stock Quotes YTD is the Year to Date percent change of the stock price from January 1 st of the current year. Example: If the stock was $43.00 on January 1 st and $36.00 on July 30 th, the percent change would be -16.3%
52 Week High Low 52-Week High & Low shows the highest and lowest prices the stock was sold per share during the last 52 weeks
Stock Ticker Every stock’s company is abbreviated with a Ticker symbol this is provided.
Dividends Per Share Dividends per share is the total cash paid to common stockholders per share annually Helpful when determining the type of stock If a company paid $10,000 in dividends for 30,000 shares, the dividends per share would be $0.33
Price/Earnings Ratio Price/earnings ratio is the closing price of the share compared to the annual earnings per share If the stock’s market price is $50.00 and the earnings per share is $2.25, the P/E ratio is 22.2 For every dollar the company earns, the stock’s market price is worth $22.00 A high number indicates people are optimistic about the company and health of the market.