** 100 stock related terms - 2
** 100 stock related terms - 2
Securities
Securities are financial instruments that represent an ownership interest in a company, such as stocks, or a debt obligation, such as bonds. They can be bought and sold on securities exchanges or in over-the-counter markets. Securities can also include derivatives, which are financial contracts that derive their value from underlying assets such as stocks, bonds, commodities, currencies, and interest rates. They can be used for a variety of purposes, such as hedging risk, generating income, or speculating on future market movements.
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Bond
Bond is a financial instrument that represents a loan made by an investor to a borrower (typically corporate or governmental). The borrower is usually required to pay periodic interest to the lender, and to repay the principal amount of the loan at maturity. Bonds are commonly used by companies, municipalities, and governments to finance projects and operations. They are considered to be less risky investments than stocks, but generally offer a lower return.
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Stock exchange
A stock exchange is a market where stocks (shares) of publicly traded companies are bought and sold. It serves as a platform for companies to raise capital by issuing shares and for investors to buy and sell those shares. A stock exchange sets rules and regulations for the listing and trading of stocks, and it provides a market for companies to raise capital and for investors to buy and sell stocks.
Stock exchanges have different listing requirements, and companies that want to list their stocks must meet certain criteria such as minimum market capitalization, minimum number of shareholders, and minimum earnings per share. Once listed, companies are required to file regular financial and other disclosures to the relevant regulatory bodies to ensure that investors have the information they need to make informed decisions.
Stock exchanges also provide market data and other information to the public, including stock prices, trading volumes, and company financials, which allows investors to make informed decisions about buying and selling stocks.
The most well-known stock exchanges are the New York Stock Exchange (NYSE) and the NASDAQ, but there are many other stock exchanges around the world, such as the Tokyo Stock Exchange, the London Stock Exchange, and the Hong Kong Stock Exchange, among others.
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NASDAQ
The NASDAQ (National Association of Securities Dealers Automated Quotations) is a stock exchange located in New York City. It is the second-largest stock exchange in the world by market capitalization, after the New York Stock Exchange (NYSE).
The NASDAQ is a electronic market, which means that buyers and sellers trade stocks through electronic trading systems, rather than through open outcry on a physical trading floor. It was the first electronic stock market and it introduced the first electronic trading platform in the 1970s.
The NASDAQ is also regulated by the Securities and Exchange Commission (SEC) and it is a member of the Intermarket Surveillance Group (ISG), which monitors trading activity across multiple exchanges.
Companies that want to list their stocks on the NASDAQ must meet certain requirements such as minimum market capitalization, minimum number of shareholders, and minimum earnings per share. Once listed, companies are required to file regular financial and other disclosures to the SEC and the NASDAQ to ensure that investors have the information they need to make informed decisions.
The NASDAQ is known for its listing of technology companies, and it has a reputation for being a market for growth companies, as opposed to value companies, which tend to list on the NYSE. It's worth noting that the NASDAQ composite index is a market capitalization-weighted index that tracks the performance of all the companies listed on the NASDAQ stock exchange.
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NYSE
The New York Stock Exchange (NYSE) is a stock exchange located in New York City. It is the largest stock exchange in the world by market capitalization and it is known for listing some of the most well-known and established companies in the world.
The NYSE is an auction market, which means that buyers and sellers come together to trade stocks through open outcry or electronic trading systems. The exchange has a physical trading floor, where traders and market makers buy and sell stocks, and it also has an electronic trading platform, NYSE Arca, that allows for electronic trading.
The NYSE is regulated by the Securities and Exchange Commission (SEC) and it is a member of the Intermarket Surveillance Group (ISG), which monitors trading activity across multiple exchanges.
Companies that want to list their stocks on the NYSE must meet certain requirements such as a minimum number of shareholders, minimum market capitalization, and minimum earnings per share. Once listed, companies are required to file regular financial and other disclosures to the SEC and the NYSE to ensure that investors have the information they need to make informed decisions.
The NYSE is considered to be a symbol of the US economy and financial markets and it is known for its strict listing standards and its reputation for transparency, safety, and stability.
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S&P 500
The S&P 500 (Standard & Poor's 500) is a stock market index that tracks the performance of 500 large-cap publicly traded companies based in the United States. The index is maintained by Standard & Poor's (S&P), a division of S&P Global. It is considered to be one of the most widely followed stock market indexes in the world.
The companies included in the index are chosen by S&P, based on market capitalization, liquidity, and sector representation. The index is designed to be a broad representation of the U.S. stock market and includes companies from various sectors such as consumer goods, healthcare, technology, and financial services. Some of the well-known companies that are included in the S&P 500 are Apple, Microsoft, Amazon, Berkshire Hathaway, and ExxonMobil.
The value of the S&P 500 is calculated by summing the current market capitalization of the 500 stocks and dividing by a divisor. The divisor is used to account for changes in the index such as stock splits, spin-offs, and additions or deletions of companies from the index.
The S&P 500 is considered to be a benchmark for the US stock market and it is used to measure the performance of the overall market. It's worth noting that the S&P 500 is a market-cap weighted index, meaning that the stocks with the highest market capitalization have the greatest influence on the index's movement.
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Dow Jones Industrial Average
The Dow Jones Industrial Average (DJIA), also known as the Dow Jones or the Dow, is a stock market index that tracks the performance of 30 large publicly traded companies based in the United States. The index is named after Charles Dow, one of the co-founders of Dow Jones & Company, and it was first published on May 26, 1896.
The DJIA is considered to be one of the oldest and most widely followed stock market indexes in the world. The companies included in the index are chosen by the S&P Dow Jones Indices and they are representative of various sectors of the economy such as consumer goods, healthcare, technology, and financial services. Some of the well-known companies that are included in the DJIA are Apple, Microsoft, Boeing, Coca-Cola, and Visa.
The value of the DJIA is calculated by summing the current prices of the 30 stocks and dividing by a divisor. The divisor is used to account for changes in the index such as stock splits, spin-offs, and additions or deletions of companies from the index.
The DJIA is considered to be a bellwether of the US stock market and it is used as a benchmark to measure the performance of the overall market. It's worth noting that the DJIA is a price-weighted index, meaning that the stocks with the highest prices have the greatest influence on the index's movement.
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Volatility
Volatility is a statistical measure of the dispersion of returns for a given security or market index. It represents the level of uncertainty or risk of a certain investment. Volatility can be measured by using standard deviation or variance of the asset's returns. High volatility means that the asset's returns are spread out over a large range and the price of the asset can change dramatically over a short period of time, while low volatility means that the asset's returns are consistent and the price changes relatively little over a period of time.
Volatility can be used to measure the risk of an investment, and it's often used as a measure of risk for the overall market or for a specific stock or other security. High volatility typically indicates a higher level of risk, while low volatility indicates a lower level of risk.
Volatility can also be used to measure the liquidity of an asset, as more liquid assets tend to have lower volatility than less liquid assets.
Volatility can be caused by several factors such as economic events, political changes, and market sentiment, among others. It can also be affected by the supply and demand of the asset and the amount of trading activity in the market.
It's worth noting that volatility can be both positive and negative for investors, as it can provide trading opportunities and potential high returns, but also it can lead to significant losses if the market moves against their position.
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Blue-chip stock
Blue-chip stocks are stocks of well-established, financially stable companies that have a long track record of consistent growth and profitability. These companies are often considered to be leaders in their respective industries, and they are considered to be less risky than other types of stocks. They are also known for their high-dividend yields and steady earnings growth.
Blue-chip companies are usually large, multinational corporations with a strong brand name and a diverse range of products or services. They are typically found in sectors such as consumer goods, healthcare, and technology. Examples of blue-chip stocks include companies like Apple, Amazon, and Microsoft.
Blue-chip stocks are often considered to be a safer investment than other types of stocks, as they are less likely to go bankrupt or experience significant financial distress. They also tend to be more resistant to economic downturns and market fluctuations.
It's worth noting that while blue-chip stocks are considered to be less risky than other types of stocks, they also tend to have lower returns than other types of stocks. They also tend to be more expensive than other types of stocks, making them less accessible for some investors.
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Penny stock
Penny stocks are stocks that trade for less than $5 per share. They are typically issued by small, newer companies with limited financial resources and track records. They are often traded on over-the-counter (OTC) markets, rather than on major exchanges like the NYSE or NASDAQ, and they are considered to be highly speculative and risky investments.
Penny stocks are popular with some investors because they can be purchased at a relatively low price and have the potential for large returns. However, they can also be highly volatile and have a higher risk of fraud. Many penny stocks are issued by companies that are in a high-risk industry, such as mining or biotechnology, or are in financial distress.
Investing in penny stocks requires a high level of risk tolerance, as well as a thorough research on the company, its industry, and the market conditions. Investors should be aware that these stocks are often thinly traded and can be manipulated easily. They also tend to have less reliable financial information, and are not subject to the same regulatory requirements as stocks traded on major exchanges.
It's worth noting that the SEC (Securities and Exchange Commission) has issued warnings and alerts to investors about the potential risks associated with penny stocks, and they encourage investors to exercise caution when considering these investments.
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