Trading Glossary

Ask Price: The lowest price a seller is willing to accept for a security.


Bearish: A negative or pessimistic outlook, expecting prices to fall.


Bear Market:  A market characterized by falling prices.


Bid Price: The highest price a buyer is willing to pay for a security.


Bullish: A positive or optimistic outlook, expecting prices to rise.


Bull Market: A market characterized by rising prices.


Call Option: A type of option that gives the holder the right to buy the underlying asset at a specified price within a specific time frame.


Day Trading: The practice of buying and selling financial instruments within the same trading day, often closing out all positions before the market closes.


Delta: A measure of how much the price of an option will change for a one-point change in the underlying asset.


Dividend: A payment made by a company to its shareholders.


Expiration Date: The date by which an options contract must be exercised or allowed to expire.


Gamma: A measure of how much the delta of an option changes for a one-point change in the underlying asset.


Implied Volatility: An estimate of how much an asset's price is expected to fluctuate, as implied by options prices.


Limit Order: An order to buy or sell a security at a specified price or better.


Margin: A deposit required to open or maintain a trading position.


Market Capitalization (Market Cap): The total value of a company's outstanding shares of stock, calculated by multiplying the share price by the number of shares.


Market Order: An order to buy or sell a security at the current market price.


Option: A financial derivative that gives the holder the right, but not the obligation, to buy or sell an asset at a predetermined price before or at expiration.


Premium: The price of an options contract.


Put Option: A type of option that gives the holder the right to sell the underlying asset at a specified price within a specific time frame.


Reversal:  A change in the direction of a price trend, signaling a potential shift in market sentiment.


Short Squeeze: A situation where a rapid increase in the price of a stock forces short sellers to cover their positions, driving the price even higher.


Stock: A share representing ownership in a company.


Stop-Loss Order: An order to sell a security when it reaches a certain price, limiting potential losses.


Strike Price: The pre-set price at which the option holder can buy (in the case of a call) or sell (in the case of a put) the underlying asset.


Theta: A measure of the time decay of an option's premium.


Vega: A measure of an option's sensitivity to changes in implied volatility.


Volatility: The degree of variation of a trading price series over time, indicating the level of risk.