Common Terms
Day Trade
The purchase and sale of a stock in the same day. This includes PM and AH but does not include cryptocurrency.
Pattern Day Trading (PDT)
A rule that a trader is only allowed 3 day trades within 5 market days unless their portfolio is above $25,000.
Initial Public Offering (IPO)
A company's first sale of stock into the open market.
Bearish
A bearish stock is one that is likely to go down. A bear is a person who believes that stock will go down in price.
Swing Trade
When the sale of a stock happens on a different day than the purchase.
Pre-Market (PM)
Hours of trading before 9:30 AM EST. Some brokers open up as early as 4:00 AM EST.
Stock Splits
Companies can split their shares to create a more attractive price. A stock worth $1,000 may do a split of 10:1 to reduce the cost of each share to $100. If you own 1 share, you will now own 10. Conversely, a company may do a reverse split to attract larger investors or maintain market requirements.
Float
The amount of available shares. Stocks with lower float and high volume will typically see more rapid price changes.
Market Hours
Market hours are between 9:30 AM EST and 4 PM EST. Trading outside of these hours will prove lower volume and higher risk.
After Hours (AH)
Hours of trading after 4 PM EST. Some brokers do not close until 8 PM EST.
Bullish
A bullish stock is one that is likely to go up. A bull is a person who believe the stock will go up in price.
Shorts
Someone who borrows shares, creating a negative number of shares that they own. They are given a period of time by their broker to buy those shares back. Their goal is to borrow and sell them at a high price and then buy them back or "cover" at a lower price.
Order-related Terms
Bid
The current price that a buyer is willing to pay for a stock.
Volume
The amount of shares traded.
Market Order
An order type to buy a stock and the best available ask or sell a stock at the best available bid. Can only be executed during market hours.
Stop Limit Order
An order type to trigger a limit sell of a stock once the price reaches a stop price.
Ask
The current price a seller is willing to sell a stock at.
Level 1
The current highest bid and lowest ask of a stock.
Limit Order
An order type to buy or sell a stock and a set 'limit' price.
Trailing Stop Order
An order type to sell a stock once it has fall a certain amount.
Spread
The difference between the current bid and ask of a stock. Larger spreads can create more volatile stocks.
Level 2
All bids and asks of placed orders on a stock.
Stop Order
An order type to trigger a market sell of a stock once the price reaches a stop price. Can only be executed during market hours.