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Basic Information

Stock Trading Terminology is a unique technical language of stock market. Each stock trading terms have definite meaning. ... In our language 'go long' means 'buy shares to sell later' and 'go short' means 'sell shares to buy later'. Be familiar with them.

Bear Market - A market in which stock prices are falling consistently.

Bull Market - A market in which the stock prices are increasing consistently.

CMP - Current Market Price

SL - Stop-loss order

TGT - Target price / Booking Price

Close Price - The final price at which the stock is traded on a given particular trading day.

Open Price - The opening price is the price at which a security first trades upon the opening of an exchange on a given trading day.

Today high Price - Today's high is the highest price at which a stock traded during the course of the day. Today's high is typically higher than the closing or opening price.
Today Low Price - Today's low is the lowest price at which a stock trades over the course of a trading day. Today's low is typically lower than the opening or closing price.

Volume - Volume is the number of shares or contracts traded in a security or an entire market during a given period of time.

Hedge - A hedge is an investment to reduce the risk of adverse price movements in an asset. Normally, a hedge consists of taking an offsetting position in a related security, such as a future contract.

Arbitrage - Arbitrage opportunities exist when the prices of similar assets are set at different levels. This opportunity allows an investor to achieve a profit with zero risk and limited funds by simply selling the asset in the overpriced market and simultaneously buying it in the cheaper market.

Speculators - are prevalent in the markets where price movements of securities are highly frequent and volatile. They play very important roles in the markets by absorbing excess risk and providing much needed liquidity in the market by buying and selling when other investors don't participate.

Diversification - Reducing the investment risk by purchasing shares of different companies operating in different sectors.

Derivatives - A security whose price is derived from one or more underlying assets. The most common underlying assets include stocks, bonds, commodities, currencies, interest rates and market indexes.

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