Glossary of Stocks And Shares Investment Terms

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AMEX:
American Stock Exchange.

Annual Return:
Return earned by an investing in a financial instrument for any given year.

Appreciation:
Refers to the positive return in value of investment instrument or asset.

Arbitrage:
Usually done by professional traders with the purchase and sale of similar investment instruments simultaneously to make a risk free profit.

Ask Price:
The price in which a seller is willing to sell the financial instrument.

At-The-Money (ATM):
A warrant / option in which the strike price is equal to the current market price of the stock.

Averaging Up /Down:
Averaging up means the purchase of more securities as the price increases (whereas in averaging down, the purchase is done when the securities are at lower prices).

Back-Testing:
Testing of a trading system or methodology based on historical data to evaluate the validity

Bearish:
Having a view that the market/stock is going to move down.

Bid Price:
Price at which a buyer is willing to pay to buy a financial instrument.

Bid-Ask Spread:
The price difference between the buying and selling prices of an instrument.

Break-Even Point:
The price level at which the investor will not make or lose money, often after taken into consideration the transaction costs.

Breakout:
An upward move in the price of stock beyond its resistance level or a decline under the support level in a price chart.

Broad Lot:
The least quantity of financial instrument that can be traded as specify by the relevant exchange.

Bull Market:
A continuous up trending stock market over an extended period.

Buy In (BI) Only :
Stock counters that are to be removed and not available for trading.

Call:
A call warrant / option provides the buyer of the contract with the right, but not an obligation, to buy the underlying instrument at a pre-determined strike price on maturity date.