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Market Basics

Bulls, bears, market caps, ETFs and the words everyone assumes you already know.

• ADR (American Depositary Receipt)A certificate that lets US investors buy a foreign company's shares on a US exchange.
• All-time high (ATH)The highest price an asset has ever traded at.
• Bear marketA fall of 20% or more from a recent high, usually with widespread pessimism.
• Blue-chip stockA large, well-established company with a long record of stable operations.
• Bull marketA sustained rise in prices, commonly a gain of 20% or more from a recent low.
• CommodityA basic raw material that is traded in standardized form, such as oil, gold or wheat.
• Contango and backwardationWhether a futures contract's price is above or below the current (spot) price.
• CorrectionA decline of 10% to 20% from a recent high.
• Dow Jones Industrial AverageAn index of 30 large US companies, weighted by share price rather than size.
• Fifty-two-week high / low (52-week range)The highest and lowest prices a stock has traded at over the past year.
• FloatThe number of a company's shares that are actually available for the public to trade.
• Futures contractA standardized agreement to buy or sell something at a set price on a future date.
• Growth stockA company expected to grow revenue and earnings faster than the market.
• IndexA basket of securities that tracks part of the market, used as a benchmark.
• IPO (Initial Public Offering)The first time a private company sells shares to the public.
• Lock-up periodA window after an IPO when insiders are barred from selling their shares.
• Market capitalizationThe total market value of a company's shares: share price times shares outstanding.
• Market sentimentThe overall mood of investors toward the market or a stock.
• Nasdaq-100An index of the 100 largest non-financial companies listed on the Nasdaq.
• OTC (over-the-counter)Trading that happens through dealer networks rather than on a major exchange.
• Penny stockA very low-priced share of a very small company, often under $5.
• Russell 2000An index of about 2,000 small-cap US companies.
• SectorA broad group of companies that do similar business, such as energy or technology.
• Shares outstandingAll the shares a company has issued and that are currently held by investors and insiders.
• S&P 500An index of 500 large US companies, weighted by market cap.
• Stock exchangeA regulated marketplace where securities are listed and traded.
• Stock screenerA tool that filters stocks using criteria such as size, valuation, growth or technical conditions.
• Stock splitA change that divides each share into several, lowering the price without changing the company's value.
• Ticker symbolThe short code that identifies a stock or fund on an exchange.
• Value stockA stock that looks cheap compared with its earnings, assets or history.
• VolatilityHow much and how fast a price moves.
• WatchlistA saved list of tickers you want to follow.

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