1. Stock Market Terms Standard 3.2 Apply the concepts of buying and selling stock

2. 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.

3. Two Types of Stock  Common Stock  Preferred Stock

4. 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

5. 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

6. 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%

7. 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

8. Stock Ticker Every stock’s company is abbreviated with a Ticker symbol this is provided.

9. 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

10. 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.