Terms to Know Trading Stocks
Just like anything, when you learn a new skill it’s important to understand the terminology. There are many terms in finance that you won’t need starting out. Below we have listed the important terms to know to get started.
Placing Trade Orders
When you buy or sell a stock, you don’t use a unique price. You buy or sell at the bid/ask price.
Bid:
Price a buyer is willing to pay for. This is the current price you can sell for per share.
Ask:
Price a seller is willing to sell for. This is the current price you will pay per share.
Order Size:
The number of shares being bought or sold.
Level 2:
Displays live open Bid & Ask orders; size of the order, price and who the traders are.
Market Price:
This type of order means you will buy or sell instantly at the current price (bid or ask).
Limit Price:
With a Limit Price, you set the price (bid or ask) you would like to execute. Once your price target is reached, the order will be triggered.
Stock Information
Our fundamentals are based on these values :
Market Cap:
Refers to the total value of all the company’s stock combined at the current market price. It is calculated by multiplying the price of a stock by its total number of outstanding shares.
Price/Sales:
This represents the company’s total market cap divided by it’s total sales. The smaller this number is, the more the share price is fairly valued. High Price/Sales means the company may be overvalued or overbought.
Float:
Float is the number of shares the company has available on the open market. A smaller Float means buying and selling will have a greater impact on the stock price.
%Held by insiders:
The more held by insiders, the better. A high % grants insiders more leverage for acquiring new companies and shows more sustainable management.
The actions of insiders also provides an indication of a company’s trajectory.
