Traders terms

Darren winters explains the most common traders terms in order of usage are as follows;

The bid price is an offer made by a trader in an effort to buy a security, commodity, or currency. A bid stipulates the price the potential buyer is willing to pay, as well as the quantity he or she will purchase, for that proposed price. So a bid order will only be executed by your broker when that price has been reached.

The ask price, another traders term, is what the trader selling the stocks is aiming to get for their shares. Moreover, the ask price order will not be executed by the broker until the asking price has been reached.

The bid-ask spread is also a common traders term and it is the difference between what people have to spend and what people want to get

The spread must be resolved before the transaction can take place.

There are also common traders terms or jargon used to describe price trends

Traders Terms

As Darren Winters explains, a bull market means that stocks are expected to rise in the long term. A bear market is an inverse which is where investors are anticipating stock prices to fall.

A limit order provides instructions to only execute at or under a price or at or above a sale price. Our recommendation to traders is to always use limit orders, not market orders as volatility spikes during low market liquidity.

What is a market order which is another common traders term relating to order placements?

A market order provides instructions to execute as quickly as possible, a transaction at the present, or market price.

What then is Good Till Cancelled Order (GTC)?

GTC means that your order stands indefinitely until you cancel it. GTC orders will be executed whenever the predetermined stock price is reached.

A day order is similar to GTC, however, where it differs from the latter is that a Day order only stands for the day that it is placed.

Liquidity is another common traders term and it refers to how easy you can get in and out of stocks.

There are also common traders terms relating to trading strategies

Going short means that you are betting the company’s price will fall. In the case of stocks, you’re borrowing shares you don’t actually own and agree to pay for those shares at some time in the future. A short squeeze in stocks means stocks have risen to a level where you are forced to cover your short position, in other words, buy, which triggers a short squeeze rally.

A margin call is a demand to increase the amount of money or assets in a margin account because it has fallen below the lowest amount allowed.

Averaging down is when an investor buys more of the stocks as the price goes down. This results in a decrease in the average price at which the investor purchased the stock.

In short, these are just a few of the common traders terms, this link will give you a more comprehensive information about how to potentially make profits irrespective of whether stocks fall or rise

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