Stock Market Glossary
Short, plain-English definitions of the terms you will see on market dashboards, screeners and financial news.
- After-hours trading
- Trading that takes place after the regular session closes at 4:00 p.m. ET, typically until 8:00 p.m. ET.
- Ask
- The lowest price a seller is currently willing to accept.
- Bear market
- A broad decline, commonly defined as a fall of 20% or more from a recent high.
- Bid
- The highest price a buyer is currently willing to pay.
- Bid-ask spread
- The difference between the bid and the ask; a cost for anyone trading immediately.
- Blue chip
- A large, established company with a long track record, such as many Dow members.
- Bull market
- A sustained rise in prices, often defined as a 20% gain from a recent low.
- Candlestick
- A chart bar showing a period's open, high, low and close.
- Circuit breaker
- A market-wide trading pause triggered when the S&P 500 falls 7% (Level 1) or 13% (Level 2) from the prior close; a 20% fall (Level 3) halts trading for the rest of the day.
- Correction
- A decline of 10% or more from a recent high.
- Dividend
- A cash payment a company makes to shareholders, usually quarterly in the US.
- Dividend yield
- Annual dividends per share divided by the share price.
- EPS (earnings per share)
- A company's net profit divided by its number of shares outstanding.
- ETF (exchange-traded fund)
- A fund that trades on an exchange like a stock, often tracking an index.
- Ex-dividend date
- The first day a stock trades without the right to the next dividend payment.
- Futures
- Contracts to buy or sell an asset at a set price on a future date; index futures trade almost around the clock and hint at the next open.
- Gap
- When a price opens well above or below the previous close, leaving an empty space on the chart.
- Index
- A calculated value tracking a basket of securities, such as the S&P 500.
- IPO (initial public offering)
- A company's first sale of shares to the public.
- Limit order
- An order to buy or sell only at a specified price or better.
- Liquidity
- How easily an asset can be traded without moving its price.
- Market capitalisation
- Share price multiplied by shares outstanding.
- Market order
- An order to buy or sell immediately at the best available price.
- P/E ratio
- Share price divided by earnings per share; a common valuation measure.
- Pre-market
- Trading before the regular session opens at 9:30 a.m. ET.
- Short selling
- Selling borrowed shares in the hope of buying them back at a lower price.
- Stop order
- An order that becomes a market order once a set trigger price is reached.
- Ticker symbol
- The short code that identifies a security, such as AAPL or MSFT.
- Volatility
- How much and how quickly prices move; often measured by standard deviation or the VIX index.
- VIX
- Cboe's index of expected 30-day S&P 500 volatility derived from option prices, nicknamed the fear gauge.
- Volume
- The number of shares traded in a given period.
See these terms in action on the stock screener and live charts, or read how to read stock charts.