All beginner investors need to understand common lingo expert traders use while making their everyday traders. At ticr, we are devoted to making you a better investor and giving access to resources that enable you to grow as an investor. In this module, we will go over the basic terminology that will help you to become a better investor.
What are stocks and equities?
Stocks represent fractional ownership of the corporation in proportion to the total number of shares issued. When you own a stock, you own part of the company. For example, if ticr issues 100 stocks and you purchase 1 stock, you own 1% of ticr.
What is an Ask?
An ask is the lowest price a seller is willing to accept when selling a stock.
What is a Bid?
A bid is the highest price a buyer is willing to offer when purchasing a stock.
What is Market Price?
Market price is the price point in which the buyer and seller agree at what value the trade should be executed. For instance, when the seller is selling the stock at $5 and you agree to buy it at that price, the transaction is executed at the market price.
What is a Limit Order?
When you place a limit order, you tell your broker you don't want the current price at which a stock is trading; instead, you want your order to be executed when the stock price moves in a certain direction. For example, if stock X is selling at $50 and you believe it will drop to $45, you place a limit order for the stock to be bought when the stock reaches $45.
What is a Stop Order?
A stop order, also referred to as a stop-loss order, is an order to buy or sell a stock once the price of the stock reaches a specified price, which is known as the stop price. When the stop price is reached, a stop order becomes a market order. Typically, investors use stop orders as a way to protect the profit they made when the stock price drops. For example, say you bought a stock for $155 and the stock has been steadily increasing in value reaching $165. To safeguard your gains, you place a stop order to sell your stock when it reaches $160.
What is Volume?
The number of shares of stock traded between the daily open and close that can be handed over between different investors. Moreover, if company X issued 1000 stocks and 500 stocks are being traded between the daily open and close, its volume is the value of the 500 stocks that day.