5 Stock Market Terms for Beginners

Entering the world of finance can be awfully confusing if you don't have the lingo down. We're breaking it down for you by explaining 5 commonly used stock market terms. You'll want to know these!

Stock Exchange:

NASDAQ and The New York Stock Exchange (NYSE) are just a couple of examples of stock exchanges. Think of stock exchanges as big warehouses where stocks are bought at wholesale, marked up, then sold to you at retail.

Market Maker:

Market makers work for the exchanges or at the “warehouses”. They are the ones buying at wholesale and selling to you at retail. In old movies, you see them on "the floor" yelling and waving tickets. Nowadays, they work in front of computers.

Market makers on the floor of the NYSE. 

Market makers on the floor of the NYSE. 

Market makers are in between you and the other party, whether you’re buying or selling a stock. These are probably the most brilliant guys on Wall Street, but they won’t always give you the best price. At our Step 1: Start Your Journey live event, you’ll learn how to know if you’re getting a good deal.

 

 

Stockbroker:

A broker executes buy and sell orders. Now days, most people execute orders through their brokerage house’s website or computer software. This is how your order is sent “to the floor.”

Bid & Ask:

When you log in to your brokerage house's website to buy a stock, you'll see a bid and an ask price. The bid is the wholesale price, and the ask is the retail price. Market makers make the difference between the bid and the ask; that’s how they’re able to profit. 

Simple enough. right? When tackling the confusing world of finance, take it one step at at time. Mull over these 5 terms and become familiar with them. At our live event, Step 1: Start Your Journey, you'll learn more useful stock market jargon, and we'll talk in detail about these 5 terms. This event was designed with beginners just like you in mind! Click here to find an event near you!