Glossary of Key Trading Terms

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Ask The lowest price that an investor or dealer is prepared to sell a given security.
Bear One who believes prices will move lower.
Bid The price that the investors are willing to pay for a security
Blue Chip The shares of a large company which is known for excellent management and a strong financial structure.
Book Value The value of an asset or security as it appears on a balance sheet.
Bourse French term for a stock exchange.
Brokerage Fee The fee charged by a broker for the execution of a transaction; also called “commission”.
Bull One who believes prices will move higher.
Buying Power Net amount of money that a client can use to buy new or additional shares of stocks.
Capital Gain The amount by which an asset’s sale price exceeds its purchase price.
Capitalization The market price of a company, calculated by multiplying the share price by the number of shares outstanding.
Certificate A formal declaration which is evidence of ownership. Sometimes called “Script”.
Commission A fee charged by a broker for a purchase or sale of securities.
Day Order also called Good for the day only. Any order to buy or sell a certain security that automatically expires if not executed on the day the order is placed.
Delisting The removal of securities or shares from listing on the stock exchange.
Dividend A taxable payment made to shareholders from a company‘s after tax earnings.
Ex- Dividend Refers to the day when the dividend is subtracted from the price of a stock.
Float The process of putting a company’s shares on offer to the public.
GTC also called Good Till Cancelled. Orders that will remain valid until cancelled by the user or until it reached the set expiration date of the instrument.
GTD also called Good Till Date. A market order that is only valid until the date specified when the order was entered.
Index A grouping of shares that gives a measure of price movement, used to gauge the overall health of the market.
Inflation The overall general increase in the level of prices of goods and services in the economy.
Initial Public Offering (IPO) The first sale of stock of a company to the public.
Insider Trading Illegally trading on information not available to the general public.
Limit Order An order to buy or sell at a fixed price.
Market Order An order to buy or sell a security at the present market price.
Offer The lowest price that an investor or dealer is prepared to sell a given security. The same as “Ask”.
Overbought Market condition where prices have risen too steeply and too quickly and are in danger of reversing.
Oversold Market condition where prices have declined too steeply and too quickly and are in danger of reversing.
Philippine Stock Exchange (PSE) The market place for trading in shares and other securities.
Preferred Shares Shares which provide a specific dividend that is paid before any dividends are paid to ordinary shareholders and which rank ahead of common shares in the event of liquidation.
Rights Issue An offering of common stock made to holders of an existing security which entitle them to buy new share of the same company at a discount to the existing market.
Split An increase in the number of outstanding shares in a company, with the market price dropping proportionately.
Undervalued A security or currency whose price is below its perceived value.
Volatility The measurement of how much a security fluctuates over a period of time.
Volume The total number of securities traded during a given period.
Yield The annual rate of return on an investment expressed as a percentage.