Decoding The Stock Market

Decoding the stock markets is an art. With the onset of the 20th century, the stock market had begun to look like a place essentially meant for the rich and the powerful. Today, this perception has changed a good deal. Technology and financial history seems to have changed it all. If you are up to trading binary options read more about Fintech LTD.

With more available and accessible information, anyone can now buy and sell stocks online. However, you will also need to be successful at this attempt. To start with, you need to decode the stock market lingo and understand what people are actually talking about.

This article will help the beginner in you get a good grip of things.

Why do you need to know?

If you are wondering why you would need to start learning new things while investing in stocks, you should know that it is a completely different world out there. If you are a beginner in the stock market, you will have to make a conscious effort to learn the language and culture of it.

Even while you are accessing the stock market from the comfort of your house, you will still need to talk to people who are in the business. For example, if you want the help of an online stockbroker to manage your portfolio, you will have to first decide the type of investor you would like to be.

The Important Terms

There are a few important terms that can help boost your learning process instantly. They are listed below:

Ask

This is the lowest price at which your seller will let you buy his stock. This price is non-negotiable.

Bid

If you are the buyer, this is the highest price you will be willing to pay while buying stocks.

Bear

This term is used to denote a situation in which the market is on the decline. This is a symbolic representation. When a bear attacks, it tends to swing its paws downwards.

Bull

This is the absolute opposite of the Bear situation. This term denotes that the market value is on the increase.

Dividend

A company pays a portion of its profits to its investors in the form of dividends. Dividends can be paid quarterly as well as annually.

NASDAQ

This is an acronym for National Association of Securities Dealers Automated Quotations. It is the biggest name in the electronic stock market.

Spread

In the stock market, the term spread is used to denote the difference between ask and bid.

Stock

Stock is the unit by which you measure the ownership in a company. This is a means to raise capital without needing to borrow money.

Yield

The percentage of a dividend paid against the price of a stock is known as the yield.

More to learn

Apart from these basic terms, there is a lot more to learn in the stock market. In order to become a successful stock market investor, understanding the strategies is of prime importance. Winning or losing has a lot to do with the strategies you own than just luck. However, with knowledge of these basic terms, you will be able to understand how everything functions in this exciting journey of stocks.