Glossary Of ‘Stock Market Terms’: Revamped

Written by Lorrette 16 Comments
Last Updated:: February 19, 2009

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The New Stock Market Dictionary/Glossary Of Terms - Revamped

Markets these days are going up and down like elevators on speed.

Understanding and being actively involved in the stock market 'is not for the faint of heart'!

Recent 'wild swings' on stock markets around the world may well have turned some of the most seasoned of investors into a quivering masses of jello desperately trying to find other ways to make money.

But - first things first, lets get to the humor in all these 'stock market' shenanigans. Then I will share with you some advice I was given by one market expert on stock market investing.

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Funny 'Stock Market Terms' - Revamped:

CEO - Chief Embezzlement Officer

CFO - Corporate Fraud Officer

Bull Market - Random market movement causing certain investors to mistake themselves for financial geniuses

Bear Market - 6 to 18 month period when kids get no pocket money, wife gets no jewelery and husband gets no sex

Value Investing - The art of buying low - and selling 'lower'

P/E Ratio - The % of investors wetting their pants as the market continues crashing

Broker - What your broker makes you

Standard & Poor - Your life in a nutshell

Stock Analyst - The idiot who just downgraded your stock

Stock Split - When your ex-wife and her lawyer split your assets equally between themselves

Financial Planner - A guy whose phone has been disconnected

Market Correction - The day 'after' you buy stocks

Cash Flow - The movement your money makes as it disappears down the toilet

Yahoo - What you yell after selling it to some poor sucker for $240 per share

Windows - What you jump out of when you are the sucker who bought Yahoo @ $240 per share

Institutional Investor - Past year investor who is now locked up in a nuthouse

Profit - An archaic word no longer in use

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I know nothing about the Stock Market...

Recent economic chaos got me thinking that maybe I should at least make some effort to educate myself and have at least some understanding of where and how the stock market is impacted.

I made the mistake of asking a close friend ('He') who is a well known and successful broker to explain 'broadly' (bad mistake with someone whose shortest ever sentence took him a full 2 minutes to write) what stock market trading is all about and whether during times such as these, when the bottom has dropped out of the market, is in fact a good time to consider entering into the stock market.

'He' began with..:

Know your current Market situation

If you are already invested to the neck in the market, besides the fact that you are probably not sleeping well, you should understand the importance of smart strategy.
If on the other hand you are one of those who believes these are the most fruitful of times to take advantage of lower share prices and are considering entering into the formidable world of share trading - BE WARNED - you would do well to first do your homework thoroughly.
Get a book which covers 'The Dow Theory'. Though not a lightweight read it will serve to help make you a smart investor. Just as history repeats itself, stock market trends do too, so ensure that you understand the stock market and how to anticipate favorable conditions.

Cool....is that it?? .... 'No' said 'He'.... and on he went -

Image by MotherPie via Flickr

Using the Rolling Stock Strategy -

'Stochastics' he says, is at the core of this strategy.

The so-called penny stocks quite often have short terms and repeating cycles of rising and falling prices which stay in an overall, consistent price range.
Best candidates are those with an upward trend, where the price rises gradually while sustaining a predictable rolling cycle. Buying is best done just at the point where the stock has bottomed and is on the rise.
The safest strategy is to sell before the cycle peaks. If you want to make money this way, you will need to be familiar with the Dow theory, as well as stochastics.

Ok, thank you says I.....

By now I am losing interest fast, I am completely confused and absolutely beyond a doubt no longer contemplating any sort of venture, even under his knowledgeable guidance, into the daunting stock market world.

But 'He' is on a roll......so on he goes!!....

'Day-Trading - is one strategy that requires three important ingredients

1. Courage

2. Expertise

3. A 'Type A' Personality'.

Day Traders follow several stocks at once looking for that 'perfect moment' to plunk down their money, selling sometimes within minutes.
Day Traders know that with the purchase of a large number of shares, the difference of even an eighth of a point rise in the stock value can result in a large profit.

But get this - Day Trading - hmmm!! I am suddenly interested again, this sounds like the way to go, right?....Wrong!!!!

Day Traders it seems can just as easily suffer tremendous losses due to some brokerages not executing a sell order quickly enough.
A Day Traders understanding of the stock market may not be enough in this case, as the situation is way out of his control.
Day-trading is a risky and highly stressful strategy.

Alright, alright...that is it....this is now depressing...I have no more interest...absolutely NADA - seems to me like it is just all a little to complicated and risky.

This guy won't let up, 'He' is still serving it up to me...........

'You must know that understanding the stock market means that you are aware of some very obscure influences which can make your 'perfect pick' imperfect blah, blah blah.....'

Ok..that is it... shut-up already to heck with self educating myself in 'all things stock market'.

I will just have to leave all that stock market/investing stuff to the experts.

I guess my head just does not get around stocks, bonds etc, etc.

Anyways, the revamped stock market terms were amusing - my thanks goes to John Hartley for those.

Yeeeeeck!!