Could You Use Definitions of Common Stock Terms?

 

If you looked at the Dow Jones stock market today, would you understand what you were looking at? Without knowing stock terms, you would probably be at least a little bit lost, and probably very confused. The stock market is a complex machine, and difficult to understand even among people who already have a basic knowledge of the financial mechanisms. Add to this the fact that there are hundreds if not thousands of stock terms.

If you want to learn more about the stock market, then here are several stock terms to help you better understand the system.

• Stock market closing.

It may come as a surprise, but the stock market is not open all of the time. It opens and closes much like a physical storefront, and different stock exchanges open and close at different times. For example, the NASDAQ is open from 9:30 am to 4:30 pm and the NYSE is open from 9:30 am to 4:00 pm EST. These are the normal Monday through Friday times, though the market does close for some federal holidays.

• Historical stock price.

Understanding stock prices history can help you to better understand where a stock is coming from, and where it might be heading. A historical stock price is what a stock was at a daily high, low, at close, and its volume information, for any given day. For example, you could look up a historical price for IBM to see what it opened at in 1982, or what its high rating was on a day in 2001.

• Split stock.

A split stock is one that literally splits, and divides, increasing the number of shares that are available for that company. When this happens, the price gets adjusted so that the stock is not worth less after it has split, but each share is worth as much as it was before the split. When a stock splits, it is usually done after a proposal by the directors of the company, and after an approval from shareholders.

Often you will find that looking up a stock term only leads to the need for looking up more terms. Unfortunately, these three terms are not enough to get you ready to start trading, as they barely skim the surface of what you should know. If you want to understand more terms, or understand stocks better in general, then you should look for term dictionaries online or speak to a financial advisor.