AMEX: The American Stock Exchange is the third largest stock exchange by trading volume.
Baby Bond: Issued bonds holding par values less than $1,000.
Bull Market: A period during which the stock market prices are rising.
Common Stock: A security that stands for ownership in a company. Common stock holders elect a board of directors and vote on corporate policy.
Day Trading: Buying and selling a security within the period of one day.
Dividend: Payout of a portion of a company's earnings. May be quoted in terms of dollars or percent of the current market price.
Dow Jones Industrial Average: Price-weighted average of 30 of the most significant stocks traded on NYSE and NASDAQ.
Hedge Funds: Private investment funds that are only made available to select investors.
January Effect: General stock price increases during the month of January.
Mutual Fund: Money pooled from investors is then invested collectively in stocks, bonds or other securities. Managed by a fund manager.
NYSE: The New York Stock Exchange, or the "Big Board" is a New York City-based stock exchange. The largest in the world in terms of dollar volume, the NYSE lists nearly 3,000 securities.
NASDAQ: The National Association of Securities Dealers Automated Quotations. The world's first electronic stock market.
Outstanding Shares: Stock shares held by investors.
Par Value: A bond's face value.
Preferred Stock: A security that stands for ownership in a company, however, holders have a higher claim than common stock holders on assets and earnings. Preferred stock dividends are paid out before dividends to common stock holders.
Reverse Stock Split: Reduction in the quantity of a corporation's outstanding shares that increases the earnings per share.
Santa Claus Effect: Sudden increase in stock prices during the week between Christmas and New Year's Day.
Stock Market: A system of trading company shares. A company that trades is also known as a public company. Selling shares allows a company to raise money.
Stock Market Index: Listing of stocks and statistics.
Stock Split: A company's existing shares are divided into multiple shares.
Treasury Stock: Stock that has been repurchased by the company.
These basic stock market definitions will help you understand basic stock investment procedures.
