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Stock Market terms
Stock Market terms
29
Finance
12th Grade
12/06/2010

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Term
401(k) plan,
Definition
a program for employees where the employee can invest in the stock market with pre-tax money. Typically employers will pay (match) up to 3-5% of the money the employee puts in.
Term
bear market,
Definition
stock prices are generally falling
Term
bid
Definition
a price at which a stock can be sold
Term
Blue Chip stock,
Definition
stock that has risen in price consistently over a long timeframe
Term
bull market,
Definition
stock prices are generally rising
Term
Day Order,
Definition
an order to buy stock that expires at the end of the day
Term
day trader
Definition
trader who buys and sells stock based tiny trends during each day
Term
dividend,
Definition
when a company shares the money they earned with people who own shares
Term
Dow Jones (DJIA)
Definition
the average of 30 consistently performing, stable stocks which makes up 15% of the total market value
Term
EBITDA
Definition
a good way to compare earnings from company to company. Interest, taxes, depreciation, and appreciation can make huge changes in the earnings number.
Term
hedge fund,
Definition
a pool of stocks sold to private individuals, and managed based on financial loopholes instead of actual company performance
Term
IPO,
Definition
a company "goes public" and raises money/capital by selling shares to people who think the company will do well.
Term
large-cap,
Definition
a company with lots of money and assets, typically more stable
Term
Limit Order,
Definition
a command given to buy or sell stock when the price reaches a certain point
Term
market cap,
Definition
market capitalization - or a measure of a company's value. Apple issues 100 shares, and people are willing to pay $100 for those shares, the public thinks that Apple is worth 100*$100, or 10,000
Term
Market close
Definition
the time that the stock market closes. 4pm EST
Term
market crash,
Definition
a panic time triggered by something really bad happening globally, when investors sell stock and get money - even at major losses, just to try to get out of the diving market.
Term
Market Order,
Definition
a command given to buy or sell stock at whatever the price is ("sell this now, whatever the price is")
Term
Mid-cap,
Definition
a company with moderate levels of assets, typically moderately stable
Term
mutual fund,
Definition
an often stable blend of stocks, plus bonds (low interest), commodoties (sugar, corn, iron) which is packaged by investment firms and sold in that bundle. The actual mix of each varies from time to time, as the firm attempts to maximize the profit of the fund
Term
Nasdaq
Definition
a list of small cap companies that have met standards of accounting required by the NASDAQ
Term
P.E. ratio,
Definition
profit to earnings ratio. Stock price divided by the amount of earnings per share the company had the previous year. A company who earns $1million, and has 1 million shares, will have a P/E ratio of 1
Term
Penny stock
Definition
stock that sells for very little money, and may go bankrupt or double in value at any moment.
Term
Preferred stock
Definition
the most protected level of stock. In the event of a bankruptcy, the people who were owed money by the company can take shares of the company to offset their loses. Preferred stock are the last people to lose their shares.
Term
S&P 500
Definition
The top 500 companies as measured by Standard and Poor (these are people)
Term
share,
Definition
a percentage of a company (stock)
Term
small-cap stock,
Definition
companies without much money in assets
Term
Stock
Definition
a percentage of a company (share)
Term
T-bill
Definition
Treasury Bill - loan money to the government for a certain amount of time, and they will pay you back after that time, plus an interest rate. If the interest rate is bad(low), people tend to invest. If it's good (high), people tend to loan money in the government.
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