** 100 stock related terms - 1
** 100 stock related terms - 1
Stock
A stock, also known as a share or a security, represents a unit of ownership in a company. When a company wants to raise capital, it can issue shares of stock, which are then bought and sold on a stock exchange or over-the-counter market. The total number of shares outstanding represents the total number of shares of stock that have been issued by a company and are currently held by shareholders.
Each stock gives the holder a proportionate ownership in the company, and usually comes with voting rights, allowing shareholders to vote on important matters such as the election of the board of directors and major corporate decisions. Shareholders are also entitled to a portion of the company's profits, which is paid out in the form of dividends.
Stocks can be bought and sold on a stock exchange, and their value can change based on a variety of factors, such as the company's financial performance, economic conditions, and investor sentiment. Investing in stocks can be a way for individuals to participate in the growth of a company and potentially earn a return on their investment.
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Share
A share, also known as a stock or a security, represents a unit of ownership in a company. When a company wants to raise capital, it can issue shares of stock, which are then bought and sold on a stock exchange or over-the-counter market. The total number of shares outstanding represents the total number of shares of stock that have been issued by a company and are currently held by shareholders.
Each share gives the holder a proportionate ownership in the company, and usually comes with voting rights, allowing shareholders to vote on important matters such as the election of the board of directors and major corporate decisions. Shareholders are also entitled to a portion of the company's profits, which is paid out in the form of dividends.
Shares can be bought and sold on a stock exchange, and their value can change based on a variety of factors, such as the company's financial performance, economic conditions, and investor sentiment. Investing in shares can be a way for individuals to participate in the growth of a company and potentially earn a return on their investment.
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Equity
Equity is the value of an asset after all liabilities are subtracted. In the context of a business, equity represents the residual value of the business to its owners, also known as shareholders. It is the value of the company that would be left over for the shareholders if all liabilities were paid off and all assets were sold.
In a company, equity can be broken down into different types such as common stock, preferred stock, and retained earnings. Common stock represents the ownership of the company and gives shareholders the right to vote on certain matters, such as the election of board of directors and major corporate decisions. Preferred stock is a type of equity that has a higher claim on assets and earnings than common stock, but generally does not have voting rights. Retained earnings are the portion of a company's profits that are retained by the company rather than being distributed as dividends to shareholders.
Equity is an important measure of a company's financial health and stability, as it represents the company's net worth and its ability to generate future cash flow.
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Dividend
A dividend is a distribution of a portion of a company's earnings to a class of its shareholders. Dividends are usually paid out in cash, but can also be paid out in the form of additional shares of stock or other assets. Dividends are usually paid out on a regular basis, such as quarterly or annually, to shareholders of record on a specific date.
Dividends are typically paid by mature, stable companies that have a consistent stream of earnings and cash flow, and that have a surplus of cash that they do not need to reinvest in the business. Dividends can be a valuable source of income for investors, and can also be a sign of a company's financial health and stability.
It's important to note that not all companies pay dividends, and some companies may choose to reinvest their earnings in order to grow their business or to pay off debt. Also, companies can decide to change their dividend policy, they can increase, decrease or even suspend it.
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Stock market
A stock market is a marketplace where stocks of publicly traded companies are bought and sold. These markets, also known as equity markets, provide a platform for companies to raise capital by issuing and selling shares of stock to the public, and for investors to buy and sell those shares. The most famous stock markets are the New York Stock Exchange (NYSE) and the NASDAQ in the United States, and the Tokyo Stock Exchange, the London Stock Exchange, and the Hong Kong Stock Exchange.
The stock market is also known as the secondary market as it is where investors buy and sell securities that have been previously issued by companies, unlike the primary market, where companies raise capital by issuing new securities.
The stock market is a key component of the global economy and can be a valuable source of long-term growth for investors. However, the stock market can be volatile and prices can fluctuate dramatically, depending on a variety of factors such as economic conditions, political developments, and corporate performance.
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IPO
An initial public offering (IPO) is the process by which a privately held company raises capital by issuing and selling shares of stock to the public for the first time. IPOs allow companies to raise funds from a broad range of investors, including institutions and individual investors, by selling shares in the company.
When a company decides to go public, it hires an investment bank or underwriter to help it prepare for the IPO. This includes valuing the company, determining the number and price of shares to be sold, and creating a prospectus, which is a document that provides detailed information about the company and the offering to potential investors.
After the shares are sold to the public, they can be traded on a stock exchange, such as the NYSE or NASDAQ. IPOs can be a significant event for a company and its shareholders as it provides access to capital and liquidity, and also brings greater visibility and public scrutiny.
It's important to note that IPOs can be a high-risk investment as the stock price of newly public companies may be highly volatile and can fluctuate significantly in the short term.
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Bull market
A bull market is a period of time in which stock prices, as well as other securities, are on an upward trend, typically characterized by widespread optimism and positive investor sentiment. A bull market is typically defined as a sustained rise in the market of 20% or more from a recent low. The term "bull market" comes from the way bulls attack, which is by thrusting their horns up.
During a bull market, investors may experience significant gains, and many investors may choose to buy stocks, which can further contribute to the upward trend. Bull markets can be caused by a variety of factors, including economic growth, low unemployment, low inflation, and positive corporate earnings.
It is important to note that bull markets are a normal part of the economic cycle, and are typically followed by bear markets, which are characterized by falling prices and negative investor sentiment.
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Bear market
A bear market is a period of time in which stock prices, as well as other securities, are on a downward trend, typically characterized by widespread pessimism and negative investor sentiment. A bear market is typically defined as a decline of 20% or more from the market's most recent high. The term "bear market" comes from the way bears attack their prey, which is by swiping down.
During a bear market, investors may experience significant losses, and many investors may choose to sell their stocks, which can further contribute to the downward trend. Bear markets can be caused by a variety of factors, including economic recession, high inflation, rising interest rates, or political uncertainty.
It is important to note that bear markets are a normal part of the economic cycle, and are typically followed by bull markets, which are characterized by rising prices and positive investor sentiment.
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Market capitalization
Market capitalization, also known as "market cap," is a measure of the total value of a publicly traded company's outstanding shares of stock. It is calculated by multiplying the current stock price by the number of outstanding shares. Market capitalization is used to classify a company as a large-cap, mid-cap, or small-cap stock, and can also be used to compare the relative size of different companies.
For example, a company with a market capitalization of $10 billion would be considered a large-cap company, while a company with a market capitalization of $500 million would be considered a small-cap company. It is important to note that market capitalization is not the same as a company's financial performance, it is just one way to classify the size of a company and for investors to get an idea of how much a company is worth.
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Ticker symbol
A ticker symbol is a short code used to uniquely identify a publicly traded company and its stock or other securities listed on an exchange. The ticker symbol is typically a combination of letters, and is used to efficiently and quickly identify a specific stock or other security among the thousands traded on an exchange. Ticker symbols are also known as stock symbols, trading symbols, or stock codes. They are usually one to five letters long, and are listed on stock exchange and financial websites to identify the security being traded and to retrieve the current stock prices and other financial data.
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