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10 terms you should know before trading stocks

2 Min Read
Jonathan Henault Jun 24, 2021

From haircut to bull market, the main obstacle for many traders beginners remains the difficulty to understand the jargon used by the professionals.

When it comes to collecting advice from experienced traders, you better understand what they are saying to you, right?

Have no fear, newbies; we came up with a small glossary of the main terms you should know before trading stocks! 

Glossary 1 Trading Stocks

  1. Ask 

The lowest amount of money that the seller of a stock is willing to accept for a share of that stock

 

  1. Bid

On the other side of the balance, the bid is the amount of money a trader is willing to pay per share for a given stock. 

 

  1. Spread

The difference between the price that a seller asks for an object and the price the buyer is willing to pay for it.

 

  1. Haircut

A haircut is an extremely thin spread between the bid and ask prices of a given stock.

 

  1. Equity

One of the most essential terms, equity is the amount of owned shares of a company and matches an equivalent degree of ownership in that company. 

 

  1. Stock Market

The stock market is where these shares, and therefore the companies’ equity, are bought and sold from one investor to another. 

 

  1. Broker

To trade in stocks, an investor needs to have an intermediary, known as a broker, to connect to the exchange of his choice. 

 

  1. Portfolio

A collection of investments owned by an investor makes up their portfolio. 

 

  1. Bull and bear

Bull market refers to a period in which the prices of stocks consistently increase, and the market is on an upward trend. Bear market? It’s the opposite. 

 

  1. Yield

Yield refers to the return of investment on stock and is expressed in terms of percentage. It’s your ultimate goal!

 

Here are just the basics; we will be back soon with a more advanced glossary you will find very useful. In the meantime, if you’re willing to learn how to trade without taking any reckless risks, why don’t you try AdelTrade, the gaming platform for traders? Our summer competition is coming soon; download the app now and register not to miss it!

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