Trading Lingo: 8 Stock Trading Terms You Should Know

Stock trading has undergone significant changes since the Internet has made its grand appearance. Obviously pointing out that it is hell bent on staying the top hype of this part of the 21st century, the Web has changed everything – from using navigation, to stock trading.

With this in mind, a plethora of untrained, part-time investors have started approaching the market, and if you are one of those with their mind set on making easy pocket money, you’ll want to familiarize yourself with the basic terms, at the very least.

Investor

To start with the most basic of terms (what you are on the market), an investor is the owner of an asset.

Broker

The buyer/seller of an investment, who does the transaction in your name, in exchange for a fee or a commission. An integral part of any trade that takes place, brokers are irreplaceable, unless you should choose to specialize both in investing and in stock broking.

Asset

This is basically everything that a company owns – from cash, equipment, technology, to land – this shows the total of wealth a company owns

Buy

This means “to take a position”, or simply to buy shares. It might seem obvious, but defining exactly what it means can’t really hurt.

Sell

Alternatively, to sell means to get rid of your shares. This occurs in two instances, the former being what you’re aiming at, and the latter a failsafe procedure so as to not go through bankruptcy. The first instance occurs once you’ve reached your trading goal, and the second happens in cases where your stock is doing bad, so you rid yourself of it, in order to cut losses.

Penny stock

This being what the entire world of online stock trading revolves around, we should probably elaborate on just what it exactly is. Typically, a stock that sells for less than $1 a share, is called a penny stock (even though it may rise to the heights of as much as $10 a share. Learn more about penny stock investment for the master millionaire Timothy Sykes.

Going long

When it comes to penny stocks, you either make money when the stock is gaining, or when it’s failing in value. “Going long” cover the former part of this equation. In layman’s terms – it means betting that the stock will increase in price, the name of the game being buying low and selling high.

Short sell

This part is the other end of the game – even though most traders focus on going long, there are known cases of those earning fortunes for going through the short sell tactic. When it comes to this part of stock trading, you borrow shares from your broker and bet that the stock is going to go through a decrease in price. In the end, you buy the stock so as to cover your negative position. This may sound strange, but, seeing as how most penny stock companies are destined to fail, it is a valid way to earn money.

So, there you have it! A list of most basic stock trading terms to get into. Admittedly, you will have to go through a ton of additional research, if you’ve set your mind towards earning, but these terms should, at the very least, get you going.