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| Securities | All of the investments, including stocks, bonds, mutual funds, options, and commodities, that are traded bought and sold. |
| Private corporation | Shares are owned by a relatively small group of people and are not traded openly in stock markets. |
| Public corporation | Sells its shares openly in stock markets where anyone can buy them. |
| Preemptive right | Gives current stockholders the right to buy any new stock the corporation issues before the stock is offered to the general public. |
| Stock Split | Process in which the shares of stock owned by existing stockholders are divided into a larger number of shares. |
| Par Value | An assigned dollar value that is printed on a stock certificate. |
| Blue-chip Stock | Considered a safe investment that generally attracts conservative investors. |
| Income stock | Pays higher-than-average dividends compared to other stock issues. |
| Growth stock | Issued by a corporation whose potential earnings may be higher than the average earnings predicted for all the firms in the country. |
| Cyclical stock | Has a market value that tends to reflect the state of the economy. |
| Defensive stock | A stock that remains stable during declines in the economy. |
| Large cap stock | Stock of a corporation that has issued a large number of shares of stock and has a large amount of capitalization. |
| Capitalization | The total amount of stocks and bonds issued by a corporation. |
| Small cap stock | Stock issued by a company with a capitalization of $500 million or less. |
| Penny stock | Typically Sells for less than $1 a share, although can sell for as much as $10 a share. |
| Bull market | Occurs when investors are optimistic about the economy and buy stocks. |
| Bear markey | Occurs when investors are pessimistic about the economy and sell stocks. |
| Current Yield | The annual dividend divided by the investment's current market. |
| Total return | A calculation that includes the annual dividend as well as any increase or decrease in the original purchase price of the investment. |
| Earnings per share | A corporation's net, or after-tax, earnings divided by the number of outstanding shares of common stock. |
| Price-earnings (PE) ratio | The price of one share of stock divided by the corporation's earnings per share of stock outstanding over the last 12 months. |
| Primary market | A market in which an investor purchases securities from a corporation through an investment bank or some other represenative of the corporation. |
| Initial public offering (IPO) | Occurs when a company sells stock to the general public for the first time. |
| Secondary market | Market for existing financial securities that are currently traded among investors. |
| Securities exchange | Marketplace where brokers who represent investors meet to buy and sell securities. |
| Over-the-counter (OTC) market | A network of dealers who buy and sell the stocks of corporations that are not listed on a securities exchange. |
| Account executive | A licensed individual who buys or sells securities for clients. |
| Portfolio | Consist of all the securities held by an investor. |
| Commission | A fee charged by a brokerage firm for the buyinng and/or selling of a security. |
| Market order | A request to buy or sell a stock at the current market value. |
| Limit Order | A request to buy or sell a stock at a specified price. |
| Stop order | Type of limit order to spell a particular stock at the next availible opportunity after its market price reaches specified amount. |
| Round lots | 100 shares of multiples of 100 shares of a particular stock |
| Odd lot | Contains fewer than 100 shares of stock. |
| Selling short | Selling a stock that has been borrowed from a brokerage firm and that must be replaced at a later date. |
