Stock Market Jargon: Commonly Used Terms You Should Know

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If you’re thinking about starting to trade, the first thing you’ll notice are the jargons used by traders when they communicate. For them, it’s their first language, but for the untrained ear, it’s ciphered. You need to know these words if you want to be a successful trader. Below are some of the most common stock market trading terms you should know.

Averaging Down: When an investor buys more of a stock as the price goes down. They do it, so the average purchase price decreases.

Bear Market : The opposite of a bull market, this is when stocks are on a downtrend.

Blue Chip Stocks : These are large, industry-leading companies. They offer a stable record of significant dividend payments. The term came from the blue chips used in casinos, which have the highest denomination of chips.

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Day Trading : People who do this are often called “active traders” or “day traders” where they buy and sell stocks within the same trading day, before the close of the market on that day.

Sector : A group of stocks within the same category of business. “Technology sector” includes Apple and Microsoft.

Hi, I’m Steve Sorensen. I keep track of companies’ success through their net worth. And I usually write about them on Facebook.