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Elearnmarkets - Financial Market Learning
Home Basic Finance

25 Stock Market Terms a beginner should know

Elearnmarkets by Elearnmarkets
June 1, 2019 - Updated on November 18, 2020
Reading Time: 7min read
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Hindi: आप इस लेख को हिंदी में भी पढ़ सकते है|

Bengali: এই ব্লগটি এখানে বাংলায় পড়ুন।

When I first entered the share market world, I spend enormous time googling the basic stock market terms which are used in the share market.

Although there are many terminologies which a stock market trader should know, they are a handful of them which are used very often.

This basic domain knowledge of these terms is really important if you want to enter the stock market to succeed.

In this blog, we are going to present an elementary guide for the beginners to help them understand the basic key terms used in the share market.

So let’s get started:

   Table of Contents
   What is the Stock Market?
   What do Stock Trading Terminology mean?
   Basic terms used in the stock market

What is the Stock Market?

The stock market is a type of exchange which allows traders to buy and sell stocks as well as companies to issue stocks.

A stock represents the equity of the company whereas are the pieces of a company.

The stock market mainly serves two purposes.

Firstly to provide capital to companies so that they can use this fund for expanding their business.

The second purpose that the stock market serves is to give the investors an opportunity to share in the profits of companies which are listed in the stock exchange.

Take a sneak peak on various online finance courses as per your need and interest.

What do Stock Trading Terminology mean?

Stock market terminologies are industry-specific terms which are frequently used when we read or talk about the stock market.

Experts and novice often use these terms to talk about strategies, stock market charts, indices and other elements of the stock market.

Basic terms used in the stock market

stock market terms

Buy – Means to buys shares or take position in a company.

Sell – Getting rid of the shares as you have achieved your goal or want to cut down losses.

Ask – Ask is what people who are looking to sell their stocks are looking to get for their shares.

Bid – Bid is what you are willing to pay for a stock.

Ask-Bid Spread– Spread is the difference between what people want to spend and what people want to get.

Learn basics of stock market with Stock Market Made Easy by Market Experts

Bull – A bull market is a market condition where investors are expecting prices to rise.

Bear – A bear market is a market condition where investors are expecting prices to fall.

Limit Order – A limit order is a type of order which executes at the price placed for buy or sell.

Market Order – A market order is a type of order which executes as quickly as possible at the market price.

Day Order – A day order is a direction to a broker to execute a trade at a specific price that expires at the end of the trading day if it is not complicated.

Volatility – Means how fast a stock moves up or down.

Going Long – Betting on the stock price will increase so that you can buy low and sell high.

Averaging Down – This is when an investor buys as the stock goes down so as to increase the price at which purchased.

Capitalization – This is what the market thinks a company’s value is.

Float – This is the number of shares which can be actually traded after deducting the shares held by insiders.

Authorized Shares – This is the total number of shares that a company can trade.

IPO – It is an Initial Public Offering that happens when the private company becomes a publicly traded company.

Secondary Offering – This is another offering in order to sell more stocks and to raise more money form the public.

Dividend – Portion of the company’s earning which is paid to the shareholders.

Broker – A broker is a person who buy or sell stocks on your behalf.

Exchange – An exchange is a place where different types of investment are traded.

Portfolio – A collection of investments owned by you.

Margin – Margin account lets a person to borrow money from the broker to buy shares.

Sector – A group of stocks in the same sector.

Stock Symbol – A one to three character alphabet root symbol which represents a company listed on the exchange.

Watch this video to know more about Stock market terminologies :-

Frequently Asked Questions

How does the stock market work?

The stock market is made of many traders and investors who are willing to buy and sell the stocks.The transactions starts when the buyer and sellers start trading the stock. The prices of the stocks rise and fall based on the demand and supply for those stocks. The stock excahnge provides a safe platform for the transaction of these stocks.

What knowledge do I need to start investing in the stock market?

You need to have basic knowledge of how the stock market works. You should gain knowledge on the stock market related topics like Fundamental analysis, Technical analysis, Options trading, Commodities and Currencies etc.

What is long term investing?

Long term investors are those who want to invest in the financial assets for more than one year. Long-term investors can invest in financial assets like stocks, mutual funds, bonds, etc. which give more return in the long term. Long term investors can take the advantage of compounding.

It takes time as well as dedication to grasp the intricacies of securities trading, but when you do, the stock trading terminologies above will become a part of your daily vocabulary.

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Comments 62

  1. Bharat Taxi says:
    2 years ago

    I really appreciate the work you have done, you explained everything in such an amazing and simple way.This is best practiced for using user generated content and having right article to see you here and thanks a lot for sharing with us.

    Reply
    • Sakshi Agarwal says:
      2 years ago

      Hi Bharat,

      Thanks for reading!!

      Keep Reading!!

      Reply
  2. Goutam says:
    2 years ago

    I was trying to understand these terms from long time, I red many blogs but this one is really simple and understandable. Thank you

    Reply
    • Sakshi Agarwal says:
      2 years ago

      Hi Goutam,

      Thanks for reading!

      Keep Reading!

      Reply
    • Sultan says:
      3 months ago

      Thank you for giving valuable information

      Reply
      • Sakshi Agarwal says:
        3 months ago

        Hi,

        We are glad that you liked our blog post.

        Thank you for Reading!

        Reply
  3. Kenand Sharma says:
    1 year ago

    Thanx a lot for sharing this….

    Reply
    • Sakshi Agarwal says:
      1 year ago

      Hi,

      Thank you for Reading!

      Keep Reading!

      Reply
  4. Yashwant patole says:
    1 year ago

    That’s awesome to read this demonstrated I’m detail.

    Reply
    • Sakshi Agarwal says:
      1 year ago

      Hi,

      Thank you for Reading!

      Keep Reading!

      Reply
      • Nitin says:
        11 months ago

        Hi. Very informative. Appreciate it.
        Would be nice to keep reading from you. Keep me your loop please.
        Thanks.

        Reply
        • Sakshi Agarwal says:
          10 months ago

          Hi,

          Thank you for reading our blogs!

          Keep Reading!

          Reply
  5. Shankar Dev malla says:
    1 year ago

    Beginner needs to know are very well explained

    Reply
  6. Sandhya says:
    1 year ago

    Thank you! very nicely drafted and made understood all point for beginners. Its very helpful.

    Reply
  7. Latesha Stoneham says:
    1 year ago

    Thanks a lot. This is great content. I might share some for you guys too. Great work poster!

    Reply
  8. Raj says:
    1 year ago

    Thank you. It is very nice blog and explain simplest about the market. Keep going ..

    Reply
  9. RANJITh says:
    1 year ago

    Tysm ❤️ great information given

    Reply
  10. TAPAN KUMAR GHOSH says:
    1 year ago

    Great works sir, I m highly benefitted by your efforts, bahut baby ধন্যবাদ धन्यवाद

    Reply
  11. Victoria Businesswomen says:
    1 year ago

    You really explained very well and very details. This information helps lots of people who are beginner in this field. Thank you for sharing this useful information.

    Reply
  12. Manoj BHANDARKAR says:
    12 months ago

    Beautifully explained.
    The most basic terms.
    Thanks so much

    Reply
  13. Raghunath says:
    11 months ago

    Hi This is Raghunath and want to learn more on basics of trading also would like to subscribe for more articles on the same. Would be able to provide them too.

    Reply
  14. Shravan Kumar says:
    11 months ago

    a brief info said in a wise way

    Reply
  15. Jamie says:
    11 months ago

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    this, like you wrote the book іn it or somethіng. Ӏ thіnk tһat you could do witһ some pics to drive thе message
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    Reply
  16. Prakash Deshmukh says:
    11 months ago

    This blog is easy to understand . Thanks for sharing same.

    Reply
    • Sakshi Agarwal says:
      10 months ago

      Hi,

      Thank you for reading our blog!

      Keep Reading!

      Reply
  17. Debashish Talukdar says:
    11 months ago

    How to operate a demat account.

    Reply
    • Sakshi Agarwal says:
      10 months ago

      Hi,

      You can refer to our blog on: How To Open A Demat Account?

      Thank you for Reading!

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      Reply
  18. sonia says:
    11 months ago

    Hey thank you for sharing such a useful information, every beginner should read this blog.

    Reply
    • Sakshi Agarwal says:
      10 months ago

      Hi,

      Thank you for reading our blogs!

      Keep Reading!

      Reply
  19. Enrique says:
    10 months ago

    Hey your article is very helpful.

    Keep writing and
    I’ll Keep Reading. 😊

    Reply
  20. Santosh J says:
    10 months ago

    Simple and easy to understand. Amazing work. Thanks !

    Reply
    • Sakshi Agarwal says:
      10 months ago

      Hi,

      Thank you for reading our blog!

      Keep Reading!

      Reply
  21. Prashant says:
    10 months ago

    Sir PE or CE ky hota hai
    Lot ky hota hai
    Plz explain

    Reply
  22. chandan says:
    10 months ago

    its in very simplefied form…….👌

    Reply
    • Sakshi Agarwal says:
      10 months ago

      Hi,

      Thank you for reading our blog!

      Keep Reading!

      Reply
  23. D. Krishnaswamy Rao says:
    9 months ago

    Very practical and useful hints for a beginner. Very much hrlpful

    Reply
    • Sakshi Agarwal says:
      9 months ago

      Hi,

      Thank you for reading our blog!

      Keep Reading!

      Reply
  24. PRASENJIT DEBNATH says:
    9 months ago

    novice. want to invest 20k for short time trading. waiting for a useful advice. TIA

    Reply
    • Sakshi Agarwal says:
      7 months ago

      Hi,

      You can join our StockEdge Club, where they help you to invest your money.

      Thank you for Reading!!

      Reply
  25. Karthik Chandran says:
    9 months ago

    Very useful

    Reply
  26. Mansi Aggarwal says:
    9 months ago

    Thank you for explaining so well.

    Reply
    • Sakshi Agarwal says:
      9 months ago

      Hi,

      Thank you for reading our blog!

      Keep Reading!

      Reply
  27. Atul says:
    9 months ago

    short,concise and easy to understand.
    thank you author.

    Reply
  28. Nirav Baldaniya says:
    8 months ago

    very easily you explained it, and very useful, you did great job.

    Reply
    • Sakshi Agarwal says:
      8 months ago

      Hi,

      Thank you for reading our blog!!

      Keep Reading!

      Reply
  29. danamma says:
    8 months ago

    nice it very helpful to me because i am very new to this platform.
    thank so much

    Reply
    • Sakshi Agarwal says:
      8 months ago

      Hi,

      Thank you for reading our blog!!

      Keep Reading!

      Reply
  30. sneha says:
    8 months ago

    nice …Very useful blog thank you

    Reply
    • Sakshi Agarwal says:
      8 months ago

      Hi,

      Thank you for reading our blog!!

      Keep Reading!

      Reply
  31. Sunitha T says:
    8 months ago

    Thank you for explaining the things very simply.

    Reply
  32. Harshal says:
    8 months ago

    Very useful thanks…

    Reply
    • Sakshi Agarwal says:
      7 months ago

      Hi,

      Thank you for reading our blog!!

      Keep Reading!

      Reply
  33. Ankur Anand says:
    8 months ago

    Hey, you have illustrated about stock market terms a beginner should know very well. It helped me to understand a few unknown terminologies. looking forward to reading your upcoming articles.

    Reply
    • Sakshi Agarwal says:
      7 months ago

      Hi,

      Thank you for reading our blog!!

      Keep Reading!

      Reply
  34. tejendra singh chauhan says:
    7 months ago

    Good work……It is very much helpful

    Reply
  35. Atul says:
    7 months ago

    Great Job, you really explained the key words properly and efficiently.
    You Should post more ideal information For Your Viewers

    Reply
  36. Richard says:
    7 months ago

    Thanks for sharing.

    Reply
  37. Vandan Gujrathi says:
    6 months ago

    Thanks for making me understand about the basic of stock exchange

    Reply
  38. Shailja Chaturvedi says:
    2 months ago

    Can you teach me share market in free please sir

    Reply
    • Sakshi Agarwal says:
      2 months ago

      Hi,

      You can join our free courses from here: https://www.elearnmarkets.com/free-courses

      Reply
  39. Darshan Deshmukh says:
    4 weeks ago

    This is one of the finest and simple explained of sharemarket.
    I really appreciate the way you explained

    Reply
    • Sakshi Agarwal says:
      4 weeks ago

      Hi,

      Thank you for Reading!

      Keep Reading

      Reply

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