There are several stock trading terms that are frequently used in the day trading market. If you are not a trader, it will be very difficult for you to understand what these terms really mean unless you study them specifically. If you are considering entering the mystical world of stock trading, it is very important that you first get to know these terminologies well. You must be a good learner. You must know how to make the best use of each opportunity to increase your knowledge about the market. Below is a brief summary of some of the most common stock trading terms.

Businessman

Traders refer to people who transact financial instruments (such as shares) in financial markets. Sometimes they do it on someone else’s behalf, but more often than not, the merchants do it just for themselves. There can be different types of traders such as top traders, pattern day traders and commercial traders. A commercial trader is the person whose primary task is to use the futures markets. The head trader is the one who works in a trading company and oversees all the traders who work for that company. Pattern day traders, on the other hand, are primarily involved in trading stocks 4-5 times a day for a period of five days.

Values

Obviously, “stock” is one of the most common stock trading terms. It mainly refers to a security or capital that involves ownership of a business or company.

current market value

The current market value indicates the actual value of a stock based on current market trends.

Capital loss and capital gain

“Capital loss” and “Capital gain” are two serious terms that traders and investors should be familiar with. Capital loss is often referred to as CL, which refers to the loss that traders or investors have to suffer when they sell shares for less than the initial purchase price. On the other hand, CG indicates capital gain, which refers to the gain resulting from the sale of shares at a price higher than the initial purchase price.

Volatility

Volatility, as it may seem, has nothing to do with the trader’s temperament. This is also one of the most heard stock trading terms used to indicate the movement of values. You must calculate the annualized standard deviation of daily changes in stock prices to determine volatility.

National Stock Market Commission

In the United States of America, there is a specific administrative agency that regulates and governs the securities trading market; this agency is known as the Securities and Exchange Commission.

reaction and rally

When a stock price suddenly drops after seeing a rise, it’s called a reaction. On the other hand, rally refers to the increase in stock prices.

public offer

When a company makes an offer to another company to buy its shares from its shareholders, this activity is called a takeover bid.

In general, having knowledge of these trading terms will definitely make things a lot easier for novice traders.