A B C D E F G H I L M N O P R S T U V W
Aggressive - A perception given by the type of approach to trading in the market. An aggressive trading style generally is associated with more risk than reward in the trade.
AMEX - American Stock Exchange located in Manhattan that consists mainly of index option trading and shares of small to medium sized companies.
Analyst - Employees of a financial establishment (brokerage firm, fund management firm, or other financial institutions) who researches the fundamental elements of a company and reports them as buy and/or sell recommendations.
Announcement Date - The date when a company reports publicly a significant news situation regarding the company business.
Ask - The lowest price an investor or trader will accept to sell the security. Also referred to as the offer price.
At-the-money - An option contract that has a strike price that is currently the closest to the price of the underlying stock.
Average Volume - Is the average of the trading volume on the security over a designated period of time. In most cases, the time frame is 30 days.
Bar - Graphical representation of the significant price points in a designated time period. Information can include open price, close price, high and low prices. Time periods can be in minutes, days, weeks and months per bar.
Break-Even - The price point where the profits equal losses.
Broker - The person or company who acts in behalf of the trader and completes the transaction of buying and/or selling securities on the market.
Call - Option contract that gives the purchaser the right to buy the stock represented by the contract and the buyer of the contract is obligated to deliver the shares represented by the contract.
Called Away - At the end of the contractual time period, the buyer has requested to receive the shares, therefore has called the shares away from the seller. The result is the fulfillment of the contractual agreement.
Candlestick - A graphical representation originating in the Asian rice trading markets. The candlestick represents the open price, close price, high and low price. Colors associated with the body of the candle identify if the open price was above or below the closing price. Candlesticks can represent many time frames such as a day, week, or months.
Capital - The amount of money used for investing.
CBOE - Chicago Board Options Exchange is a large security exchange focusing on the trade of equity, index and interest rate options.
Channel - Technical price pattern where the price fluctuates between a high and low price in a sideways direction. Connecting the highs and lows can represent a box or rectangle shape.
Chief Executive Officer (CEO) - Executive officer that is responsible for the entire company.
Close - The final price for the period being measured also referred to as the closing price.
Commission - The cost associated with an order executed by a broker to buy or sell securities on the open markets.
Contract - A contractual agreement between a buyer and a seller based on a pre-determined number of underlying shares that has a preset expiration date.
Covered Call - Level 1 option trading strategy that allows the owner of an optionable stock to sell the rights to the stock at a selected strike price identifying the selling price on a specific date in the future.
Deep Discount Broker - A brokerage house that is generally based online and has relatively lower commission structure compared to their counterparts in full or discount brokers.
Delta - An Option Greek that identifies the amount of movement the option value will change in comparison to a $1 move in the underlying stock associated with that particular option contract.
Discount Broker - A brokerage house that can offer some additional support and features that are not available with most Deep Discount Brokers. Offer a range of products and services that fall in-between a Deep Discount and Full Service Broker.
Diversification - The division of investments taking into account the number of positions, risk amounts, reward potential, time frames and possibly strategies to trade.
Dow Jones 30 Industrial Average - A market index used to identify strength or weakness derived from the value represented by a composite score of 30 different stocks.
Down-Trend - The downward direction of price movement from the far left to far right of a selected time frame.
Earnings - A company's Net Income over a period of time. Many companies report earnings in regular quarterly announcements.
Exhaustion - A price pattern situation that is reflected in either the price pattern moving sideways or contrary to the current trend. Exhaustion of the price is strengthened when the volume decreases throughout the exhaustion period.
Expectancy - The expected annualized return for every dollar risk in a trade system.
Expected Value - The expected value or return determined from the technical analysis of the security.
Expiration - The date an option contract is scheduled to expire. The option expiration date is the third Friday of the contractual month.
Forecasting - The ability to read the market and/or security conditions to determine the future movement of the market and/or security.
Full Service Broker - A brokerage house that offers a wide range of investing recommendations, financial planning, physical location for clients and possible proprietary elements to assist the client in investing.
Fundamental Analysis - The evaluation process of the security financial information contained in the balance sheet, statement of cash flow and income statements.
Gap - separations in the candle sticks from one day to next where an opening appears on the chart. The opening is due to the closing price of the first day not reflected in the price range of the next day. Gaps can occur up or down.
Good till Cancelled (GTC) - An order type that allows an order to remain active until it is possible to be filled by the broker in the open market(s).
High - The high price in a given period of time; minute(s), day, week, month, year.
Histogram - Type of representation for collected numerical data. Used with an oscillator such as the MACD to make a visual reading easier and quicker.
In-the-money - An option contract that has intrinsic value. The more intrinsic value, the deeper in-the-money the option contract.
Institution - A large financial entity such as a bank, pension plan, insurance company or mutual fund.
Intermediate-Term - Investing time frame from 6 weeks to 6 months.
Intrinsic Value - The equity currently in an option contract. Calculated from the difference between the strike price and the current price of the underlying stock.
Investor - A type of individual who invests in the securities markets and plans to use the market place as a long-term investment vehicle. Can be associated with a buy and hold strategy.
Leverage - The use of financial instruments or borrowed capital, such as a margin account, to increase the potential return from the original return of the security. Leverage can be created by using options, futures and margins and results in the increase of risk.
Limit Order - Order type allowing the trader to set a price to buy or sell the security at that price or better.
Liquidity - The ability to buy or sell shares easily due to the amount of trading activity on the security at any given time. The higher the volume the more liquid the security.
Low - Also referred to as the Low Price, is the lowest price traded of the security during the recognized time period.MACD - Moving Average Convergence Divergence. A momentum indicator derived from the association of two moving averages, generally represented as a histogram.
Market Forecast Oscillator - Forecasting tool derived from price, time and volume represented in graphical form to assist a trader and/or investor to understand the current conditions of the market relative to recent history of the market. The Market Forecast is used to determine if the market is Bullish, Bearish or Neutral.
Market Maker - The person or firm that assumes the responsibility and risk in assisting the flow of trades in an open market of security trading.
Market Order - Order Type that allows the trade to be executed in the market place at the next available price.
Merger - The combining of two or more companies into a single entity.
Momentum - The rate of acceleration of a security's price or volume.
Money Management - A list of rules used to govern the amount of risk associate with a trading account and within each individual trade. Money Management takes into account such factors as stock price, potential return, risk, reward and expectancy.
Moving Average - A technical indicator calculated from the mean price over a designated period of time.
NASDAQ - The National Association of Securities Dealers Automatic Quotation System is a electronically based securities exchange market.
New York Stock Exchange (NYSE) - A corporation, operated by a board of directors, responsible for listing securities, setting policies, and supervising the stock exchange and its member activities.
Open - The open or starting price in a given period of time; minute(s), day, week, month, year.
Open Interest - The number of outstanding contracts on the month and strike selected.
Option - A contractual agreement to buy or sell a security at a pre-determined price on
or
before the expiration date. An option is a type of traded derivative based on the value of
an
underlying security.
Option Chain - The listing of available contracts by expiration months and strike prices containing such information as bid, ask, open interest and volume.
Order Duration - The time elapsed while invested in a security from the purchase to the sell.
Order Size - The number of shares represented in an order to buy or sell.
Order Type - The order type such as Limit Order and Market Order that set specific parameters to obtain or sell securities.
Out-the-money - An option contract that currently does not have intrinsic value.
Paper trade - A type of trading activity that is completed with assistance of software, web tools or paper to simulate trading in the market place to obtain knowledge of expectancies of trading styles, back testing, trading unfamiliar securities and market conditions.
Partial Fill - An order that was not completed fill as first instructed to the broker. Example: Place order to buy 10,000 shares and only 5,000 shares were actually placed in the account as a purchase.
Position Size - The number of shares to buy or sell with the structure of money management.
Premium - The price or cost of an option contract.
Price Resistance - The horizontal price point acting as a ceiling where the price of a security tends to slow, stop or reverse direction.
Price Support - The horizontal price point acting as a floor where the price of a security tends to slow, stop or reverse direction.
Put - Option contract that gives the purchaser the right to sell the stock represented by the contract and the buyer of the contract is obligated to receive the shares represented by the contract.
Real-time - The actual activity in the market place with no delay of data. A live data feed.
Resistance - A high point where the value or price of the security tends to slow, stop or reverse. The point acts as a ceiling, once broken it becomes the floor or support level.
Retail Investor - Investor or trader that is not a institutional investor based on trading activity and amount of capital invested or traded in the market place.
Reversal Zone - The upper range of the security price movement where the price is forecasted or expected to reverse direction. The reversal zone will vary in size depending on the volatility of the security from past movements. Also consider technical patterns to accompany the identification of a reversal.
Reward/Risk Ratio - The ratio of the amount of reward the security can offer or has given compared to the risk or allowable loss associated with the reward.
Risk - The degree or amount willing to lose to make a trade based on the opportunity to be correct.
Risk Evaluation - The evaluation of how much risk a trader or investor is willing to assume to decide strategy and securities that best represent the willing amount of risk to utilize.
Risk Tolerance - The degree of uncertainty an investor or trader can handle when and if the trade is incorrect.
Search - The act of locating potential securities to trade.
Sector - A group of securities that are similar is business type, industry, rating and/or maturity.
Short Term - The duration of time a position in a security is held and lasts from 1 day to 6 weeks.
Spread - (1) The difference between the bid and ask price of a security. (2) An advanced type of trading strategy using options.
Stochastic - A market sentiment indicator representing the buying or selling pressure exerted of the value of the security.
Stock - A unit of ownership in a publicly traded company exchanged from one investor to another in the security markets.
Stock Split - The reduction or addition of the number of shares available of a publicly traded company. Stock Splits are considered a form of dividend payment.
Stop-Loss Order - An order type that attempts to limit a loss in the securities value to a set price. The set price acts as a trigger that once hit, triggers the order. The order then is automatically treated like a Market Order and the transaction will be made at the next available market price.
Strike Price - The pre-determined purchase price or selling price of an option contract once exercised.
Support - A low point where the value or price of the security tends to slow, stop or reverse. The point acts as a floor, once broken it becomes the ceiling or resistance level.
Technical Analysis - The research step that evaluates the security from data represented in a graphical representation that includes such indicators as; Moving Averages, Candlesticks, MACD, Stochastic and Volume.
Trade Log - Documentation used to track and evaluate current and past trades. Includes such information as dates, ticker symbols, costs, profits or losses and strategies used.
Trader - An individual who invests in the securities market independently using strategies focusing on shorter periods of holding times. Generally, the time horizon is from minutes to 6 months.
Trading Capital - The amount of investing money in a trading account.
Trading Rules - Rules unique to the trader or investor used to filter securities to determine the validity within a trading system.
Trailing Stop Order - Similar to a Stop-Loss order with the ability to automatically adjust according to some pre-determined criteria. Common criteria include percentages and dollar amounts.
Trend - The directional movement of a security, sector or market.
Trend Analysis - The evaluation process used to determine the current trend of a security, sector or market.
Trend Resistance - A high point that follows the directional trends where the value or price of the security tends to slow, stop or reverse. The point acts as a ceiling, once broken it becomes the floor or support level and can become a possible trend reversal.
Trend Support - A low point that follows the directional trends where the value or price of the security tends to slow, stop or reverse. The point acts as a floor, once broken it becomes the ceiling or resistance level and can be a possible trend reversal.
Up-Trend - The upward direction of price movement from the far left to far right of a selected time frame.
Volatility - The fluctuations, or lack thereof, of the price movement in a designated time period. The more frequent the swings in price fluctuations the more volatile the security.
Volume - The number of shares traded in a specific time period of a security.
Wall Street Journal - A long running news publication that has produced news, security quotes advertisements and instructional documentation for the investment community.