Glossary
62 terms from the Stocks course.
10-Q / 10-K
Quarterly / annual reports filed with the SEC. The 10-K is the comprehensive annual summary.
Bear market
A market falling over a long period (commonly 20%+ from a high), usually with a weakening economy and shrinking profits.
Blue chip
Large, established, financially strong companies.
Breakout
Price moves above resistance or below support.
Broker
Gives you access to the market. Full-service, online (e.g., Webull, thinkorswim, TradeStation) or direct-access.
Bull market
A market rising over a long period, usually with a strong economy and growing company profits.
Call / Put
Call: right to buy at the strike. Put: right to sell at the strike. Usually 100 shares per contract.
Cash account
You pay in full with settled cash. No borrowing.
Consolidation
After a big move, price trades in a narrow range for a while.
CPI / PPI
Consumer / producer price inflation, released monthly. CPI is the headline inflation report.
Danny DeVito Toe vs. Shaq Leg
Small position size vs. large position size.
Discount rate
What the 12 Federal Reserve Banks charge banks for short-term loans.
Dividends
Cash paid per share out of profits. Dividends are not fixed and can be cut.
Earnings
The company's net income for a period.
ETF
Exchange-traded fund: a basket of stocks in one ticker (e.g., GDX = gold miners). Trades all day like a stock.
Fed funds rate
The rate banks lend to each other overnight. A key signal for interest rates.
Float
Shares available to trade publicly, excluding insider and restricted shares.
FOMO
Fear of missing out. Don't. There are plenty of opportunities.
Fundamental analysis
An "x-ray" of the company: balance sheet, income statement, cash flow (Lesson 8).
Gap down
Opens well below the prior close, often on bad news after hours.
Gap up
Opens well above the prior close, often on good news after hours.
GDP · ECI
Value of all goods and services produced · quarterly change in labor costs.
GTC
Good-till-cancelled: stays open until it fills or you cancel it (brokers may set a maximum).
HFT
High-frequency trading: algorithms that trade at very high speed using fast data.
Index
A group of stocks tracked as one portfolio, such as the S&P 500.
Institutional investor
Firms (funds, banks) trading very large size, often at lower commissions.
Intrinsic · Extrinsic
Call: stock − strike; put: strike − stock. Extrinsic = premium − intrinsic (time and volatility value).
IPO
A company's first sale of stock to the public. The first days can be very volatile.
ITM / OTM
In the money: a call with strike below price, a put with strike above. Out of the money: no intrinsic value.
LEAPS
Options with more than a year until expiration.
Level 1 / 2 / 3
L1: best bid/ask. L2: the depth of waiting orders. L3: market-maker systems, not for the public.
Limit order
Only at your price or better. Limit $1.00 when price is $1.02 and only rising? No fill.
Liquidity
How easily you can buy or sell without moving the price. Lots of buyers, sellers and volume = high liquidity.
Long-term MA
Usually the 200-day: the long-term trend.
MACD
Moving Average Convergence Divergence: trend-following momentum from two moving averages.
Margin account
Your broker lends you part of the purchase price. Reg T usually allows up to 2:1 for overnight positions; intraday limits are set by your broker.
Margin call
Your broker demands more cash or securities because your account fell below the required margin.
Market cap
A company's value: shares outstanding × share price.
Market maker
A firm that always quotes both a bid and an ask in a stock to keep trading flowing.
Market order
Buy or sell now at the best available price. Guarantees a fill, not a price.
Moving average crossover
Buy signal when a shorter MA crosses above a longer one; sell signal when it falls below.
Mutual fund
A pooled fund run by an investment company and regulated by the SEC. Priced once a day after the close. Returns are not guaranteed.
Oscillators
Indicators (like RSI or EWO) that flag overbought/oversold or momentum shifts.
Penny / OTC stocks
Trade over-the-counter, not on a major exchange. Often less disclosure and thin liquidity.
Prospectus
The formal document describing an offering, for informed decisions.
Resistance
A price level where rising prices have a hard time breaking through.
Retail trader
People like you and me, trading our own money, not for a firm.
Reverse split (R/S)
Fewer shares at a proportionally higher price (e.g., 1-for-10). Total value doesn't change. Often done to stay above an exchange's minimum price.
Shenanigans · Vortex
A burst of volume with wild candles · price stuck in a channel for a long time.
Shift Change
Around 10 AM ET volume picks up and the trend either continues or reverses.
Short selling
Borrow shares from your broker and sell them, hoping to buy back lower. Short at $100, cover at $90 = $10 per share profit (before borrow fees and interest). Losses are unlimited if price rises.
Short squeeze
Price rises, short sellers rush to buy back to cover their losses, and that buying pushes price even higher, stopping out more shorts.
Short-term MA
Reacts quickly to price, usually under 50 periods (ADT uses the 9, 21 and 55 EMA).
Stop loss
Automatically sells when price hits your stop. Buy at $1.00 with a stop at $0.90 to limit the loss to about $0.10 a share (gaps can slip past).
Strike · Expiration
The fixed buy/sell price · the last day to exercise. American style: any time before; European: only at expiration.
Support
A price level where falling prices tend to stop, then move sideways or reverse.
Technical analysis
Using charts, patterns and past price data to judge future price action.
Trailing stop
A stop that follows price up by a set amount (e.g., $3 below the high), locking in more profit as the stock rises.
Volatility
How widely and quickly prices swing. Big daily moves = a "volatile" market.
Volume
How many shares traded. Confirms how strong a move is.
WSB
WallStreetBets, the online crowd known for hyping stocks like GameStop and AMC.