Reference
Glossary
Common terms you may encounter when reading market news or company filings.
- Ask (offer)
- The lowest price at which a seller is willing to sell a security at a given moment.
- Bear market
- Informal term for a prolonged period of declining prices in a market or asset; precise thresholds vary by source.
- Bid
- The highest price a buyer is willing to pay for a security at a given moment.
- Bull market
- Informal term for a sustained period of rising prices; definitions differ among commentators.
- Market capitalization
- Share price multiplied by shares outstanding, used to describe company size in public markets.
- Dividend
- A distribution authorized by a company’s board, paid to eligible shareholders, often in cash or additional shares.
- Earnings per share (EPS)
- Net income attributable to common shareholders divided by weighted average shares outstanding, as reported under accounting rules.
- Exchange-traded fund (ETF)
- A pooled investment vehicle that trades on an exchange like a stock and typically tracks an index or strategy described in its prospectus.
- Initial public offering (IPO)
- The first sale of stock to the public by a formerly private company, subject to regulatory registration.
- Limit order
- An order to buy or sell at a specified price or better.
- Liquidity
- The ease with which a security can be bought or sold without materially affecting its price.
- Market order
- An order intended to execute promptly at the best available prices at the time of execution.
- Price-to-earnings (P/E) ratio
- Share price divided by earnings per share; a commonly cited valuation metric with significant limitations.
- Prospectus
- A legal document describing a security offering or fund, including risks, fees, and objectives.
- SEC filing
- A document submitted to the Securities and Exchange Commission by public companies and other registrants.
- Spread
- The difference between the bid and ask prices.
- Ticker symbol
- A short code used to identify a listed security on an exchange.
- Volatility
- A measure of how much a security’s price fluctuates over time; higher volatility implies larger price swings.
- Volume
- The number of shares traded during a given period.
- Yield
- For dividend-paying stocks, often the annual dividend per share divided by the current price, expressed as a percentage.