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26 Cards in this Set
- Front
- Back
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AMEX
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Stands for American Stock Exchange. Located in New York City, this stock exchange sells memberships, or seats, so that brokers can trade stocks.
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Broker
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A professional trader who buys or sells stocks for individuals and institutional customers.
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Buying on the Margin
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Buying stock by paying a percentage of the purchase price (typically 50%) and borrowing the balance froma broker. If the buyer can sell the stock at a higher price than she or he paid for it, the amount of the loan can be repaid (plus interest and commision) and the buyer can keep the profit. However, it the stock price falls, the buyer must repay the loan (plus interest and commision) and suffer a loss.
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Capital Gain
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A profit realized from the sale of propery, stocks or other investments.
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Commision
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A percentage of a stock trade ( abuy or a sell) paid to a stockbroker.
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Common Stock
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An ownership share or shares of ownership in a corporation.
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Dealer
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Someone who buys and sells stocks from his or her own accounts or the accounts of the firm he or she works for. Some dealers also act as brokers.
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Dividend
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A share of a company's net profits paid to shareholders.
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Dow Jones Insdustrial Average
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Often refrred to as the "Dow" or "Dow Jones Average" it is athe most commonly known stock-market indicator. The has an index of 30 industrial companies traded on the NYSE including ExxonMobil and GM.
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Growth Stock
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A stock that often pays no dividend, but the stockholder gains if the price of the stock increases (grows).
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Income Stock
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A stock that pays dividends regularly.
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Instistutional Investor
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An organization (an insurance company or pension fud, for example) that invests in the stock market.
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Investment Banker
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A financial firm that agrees to underwrite a new issue fo stocks or bonds and sell them to its best customers.
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Mutal Fund
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A company that pools money from investors and uses it to buy stocks, bonds or money market instruments on the investors' behalf. Provides diversification and professional management for investors.
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NASDAQ
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An electonic marketplace enabling buyers and sellers to get together via computers and hundreds of thousands of miles of high-speed data lines to trade stocks.
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NYSE (New York Stock Exchange)
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The oldest stock exchange in the United States, founded in 1792. The exchange is located in New York City.
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Odd Lot
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Stocks are usually purchased in mulitples of 100 shares, called a round lot. A small investor may buy a single share of stock or some numver of shares less than 100. Doing this means the investor has purchased an odd lot.
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OTC-Over the Counter Market
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The market is a network of dealers connected by a computer system. There is no centralized trading floor. The stocks often represent new, start-up companies, and the stock prices are relatively low.
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Preferred Stock
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An ownership share in a corporation with a guaranteed dividend that is paid before dividends paid on common stock.
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Round Lot
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The purchase of stock in multiples of 100 shares.
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Selling Short
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To sell shor, the buyer borrows shares he or she does not own from a broker. The buyer orders the shares to be sold and takes the money from the sale. Then the buyer waits for the stock price to fall. If the stock price falls, the buyer buys the shares at eh the lower price, paasys the broker's commission and any fees, and gains a profit. Selling shor is risky; if the stock price increases, the buyer loses money.
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S & P 500 Stock Index
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This is shorthand for the Standard of Poor's 500 Stock Index. The index includes 500 stocks and is important to large-stock investors.
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Stock
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An ownership share or shares of ownership in a corporation
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Stock Certificate
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An official document certifying that a person is an owner of a stock.
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Stockholder
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A person who owns stock, sometime called a shareholder.
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Stock Split
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The division of the outstanding number of shares into a haigher number of shares. A stock split often occurs when the price of a stock is considered too high by a corporation. The purpose is to lower the price of the stock to attract more stock buyers.
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