Stock trading conditions beginners need to know

There are several stock trading terms that are commonly used in the day trading market. Unless you are a trader, it will be very difficult for you to understand what these terms actually mean unless you study them specifically. If you are considering entering the mystical world of stock trading, it is very important that you are first aware of these terminologies. You must be a good learner. You need to know how to make the most of each and every opportunity to increase your knowledge of the market. Below is a brief overview of some of the most common stock trading terms.

dealer

Traders refer to the people who trade financial instruments (e.g. stocks) in the financial markets. Sometimes they do it on behalf of someone else, but more often than not, traders only do it for themselves. There can be different types of traders, such as: B. Head traders, pattern day traders and commercial traders. A commercial trader is the person whose primary job is to exploit the futures markets. The chief 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, mainly trade securities 4-5 times a day over a five-day period.

share

“Share” is obviously one of the most common terms in stock trading. It mainly refers to a security or equity that involves ownership of a firm or business.

Current market value

The current price indicates the actual value of a share based on the current market development.

capital loss and capital gain

“Capital Loss” and “Capital Gain” are two serious terms that traders and investors need to be well aware of. Loss of capital is often referred to as CL, which refers to the loss suffered by traders or investors when they sell shares at a price lower than the original purchase price. On the other hand, CG indicates the capital gain, which refers to the profit derived from selling the shares at a higher price than the original purchase price.

volatility

Volatility, it may sound, has nothing to do with trader temperament. This is also one of the most common terms in stock trading, used to indicate the movement of securities. To determine volatility, you need to calculate the annualized standard deviation of daily stock price changes.

Securities and Exchange Commission

In the United States of America, there is a special administrative agency that regulates and regulates the stock trading market – this agency is known as the Securities and Exchange Commission.

reaction and rally

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

takeover offer

When a company makes an offer to another company to buy its stock from its shareholders, this activity is known as a takeover bid.

Overall, knowing these stock trading conditions will definitely make things a lot easier for beginners.