A beginners guide to stock market buzzwords

by | 9 May, 2018

What’s ‘bullish’? What’s ‘bearish’? Learn the jargon of the markets!

Beginners to investing often find that the jargon associated with the stock market can be overwhelming. Below we’ve compiled a list to help you get your head around bearish, bullish and everything else in between.

Analyst expectations: predictions that professional analysts make about stocks, companies and more. For example, ‘analysts expect Apple revenues to climb by 20% this year’.

Bearish: a downward movement in price of an instrument. The term can be used to denote a negative outlook from an investor about the future value of something, i.e. if they thought gold prices would fall, they may say: “I’m bearish on gold.”

Brent: a short-hand term for Brent Crude oil, a widely traded commodity.

Bullish: an upward movement in the price of an instrument. It can also be used to describe a positive investor sentiment, i.e. “I feel bullish about Snapchat shares.”

Buy the dip: buying an instrument when it’s cheap because its value has fallen, expecting the price to recover.

Earnings call: the release of a company’s latest set of earnings, which show how a company has performed financially over a certain time period. Earnings releases can greatly affect share prices because they affect how investors feel about a company’s value.

ETF: exchange traded fund – a fund which tracks (follows the movement in price) of a stock market index, commodity, bonds or a group of instruments bundled together. An ETF is a type of fund that owns the underlying instruments (shares of stock, bonds, foreign currency, etc.) and divides ownership of those instruments into shares, which which can be bought on an exchange just like a regular individual stock.

FAANG: The 5 largest tech companies in the world – Facebook, Amazon, Apple, Netflix and Google.

Fund: an investment vehicle which pools together the money of many investors to invest in a broad range of instruments.

Going long: buying an instrument, hoping to benefit from a rise in its price.

Going short: selling an instrument, hoping to benefit from a fall in its price.

HODL: ‘hold on for dear life’ – holding onto an investment through a time of strong market volatility.

Index fund: A fund which tracks the performance of a large stock index (like the FTSE100 or S&P500). These are often more expensive on an annual basis than an ETF and cannot be bought and sold throughout the day on an exchange.

Instrument: an asset that can be traded, such as a stock or bond, fund or commodity.

Initial Public Offering (IPO): An IPO is when a company issues stock for the first time to the public, offering its shares through a listed exchange, such as the New York or Hong Kong stock exchanges.

King crypto: a term for Bitcoin – the most popular cryptocurrency on the market.

Price reversal: when an instrument’s price climbs then falls in a short time period, or the reverse.

Price target: A prediction (usually from analysts) that the price of an instrument will be at a certain point at a certain time in future. For example: ‘Morgan Stanley analysts cut their 12 month price target for Nike to $60’. They usually offer a recommendation for potential investors too. These are a ‘buy’, a ‘hold’, or a ‘sell’ rating, based on predictions for the stock’s performance.

Rally: a long term sustained increase in the price of an instrument.

Returns: the amount of money you make on top of your initial investment over time.

Sell-off: A fast drop in the price of an instrument or set of instruments.

Sentiment: how other investors feel about the value of a particular instrument.

Share price spike: A fast rise in a share price.

Stocks / shares: the two words both mean pretty much the same thing. A stock or share is a piece of a company which an investor purchases. The purchasing of shares (or stock) makes the investor a shareholder (or stockholder) of that particular business.

Stock Market Index: A stock index or stock market index is a measurement of a section of the stock market. An example could be the UK FTSE 100 or US S&P500.

Trade: the buying or selling of an instrument.

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