In this lecture, we'll discuss some basic stock terminology that you should be familiar with when investing in the stock market.
Stock Symbol A stock symbol is a unique combination of letters that identifies a specific stock. For example, the stock symbol for Apple Inc. is AAPL. When buying or selling stocks, you'll need to know the stock symbol for the company you're interested in.
Ticker Symbol A ticker symbol is a shortened version of the stock symbol that is often used in financial news and stock quotes. For example, the ticker symbol for Apple Inc. is AAPL. Ticker symbols are typically easier to remember than full stock symbols and are used to quickly identify a company's stock.
Market Capitalization Market capitalization is the total value of a company's outstanding shares of stock. It is calculated by multiplying the current stock price by the total number of outstanding shares. Market capitalization can be used to compare the size of different companies and to determine the relative value of a company's stock.
Dividend A dividend is a portion of a company's earnings that is paid out to its shareholders. Companies may choose to pay dividends as a way to provide income to their shareholders or to reward them for owning the company's stock.
P/E Ratio The price-to-earnings (P/E) ratio is a measure of a company's stock price relative to its earnings per share (EPS). It is calculated by dividing the current stock price by the company's EPS. A high P/E ratio may indicate that the stock is overvalued, while a low P/E ratio may indicate that the stock is undervalued.
Volume Volume refers to the number of shares of a particular stock that are traded on a given day. High volume may indicate that there is a lot of investor interest in the stock, while low volume may indicate that there is less interest.
Bid and Ask Price The bid price is the price that a buyer is willing to pay for a share of stock, while the ask price is the price that a seller is willing to accept for a share of stock. The difference between the bid and ask price is known as the spread.
Conclusion
These are some of the basic stock terminology that you should be familiar with when investing in the stock market. Understanding these terms will help you make more informed investment decisions and navigate the stock market more effectively.