Trading Glossary

The process of evaluating a company’s financial data, performance, and market trends to decide whether to buy, hold, or sell its shares.

Marketplace for buying and selling shares.

Benchmark tracking performance of selected stocks.

A marketplace where investors buy and sell shares of publicly traded companies. It reflects the overall health and confidence of the economy.

When a company increases its number of shares by dividing existing ones, lowering the share price but keeping total value the same.

The business of buying and selling shares or other securities on behalf of clients.

When traders or institutions deliberately push an asset’s price to trigger other traders’ stop-loss orders, causing a quick price drop (or spike) that they can profit from before the market bounces back.

An order to buy or sell once the price reaches a specific level. It triggers a trade only when that price is hit.

Order to automatically sell when a price level is reached.

Buying a call and put with same strike price and expiration date. If the stock price is close to the strike price at expiration of the options, the straddle leads to a loss.

The set price at which the holder of an option can buy (call) or sell (put) the underlying asset.

A home loan given to borrowers with poor credit ratings. It carries higher interest rates because of the greater risk of default.

Happens when storage space for a physical commodity becomes scarce because of oversupply, causing the cost of carry — or the expense of storing that commodity — in futures contracts to rise.

The basic market principle where prices move based on how much of something is available (supply) and how much people want it (demand). High demand with low supply pushes prices up, while low demand with high supply pushes prices down.

Price areas on a chart where buying or selling pressure tends to stop or reverse a trend. Support acts as a floor, and resistance acts as a ceiling.