Stock Market Terms

A. Market Basics & Order Types

Ask/Offer - Price sellers are willing to accept
Bid - Price buyers are willing to pay
Spread - Difference between bid and ask prices
Market Order - Immediate execution at current price
Limit Order - Executes only at specified price
Stop-Loss - Automatic exit at predetermined loss level
Good-Til-Canceled (GTC) Order – Order remains active until executed or manually canceled.
Take-Profit - Automatic exit at predetermined profit level
Stop-Limit Order - Triggers limit order after stop price hit
Fill or Kill (FOK) - Executes completely or not at all
Immediate or Cancel (IOC) - Fills partial amounts, cancels rest

B. Order Flow & Manipulation

Prop (Bid Prop) - Large buy order supporting price
Wall - Large sell order suppressing price
Soak - Large order absorbing transactions
Rigger - Market manipulator
Washout - Violent drop forcing weak hands to exit

C. Technical Analysis & Charting

Candlestick - Price visualization (open/high/low/close)
Support (SUP) - Price floor where buying interest increases
Resistance (RES) - Price ceiling where selling pressure increases
S/R - Support/Resistance
Breakout - Price moves above resistance
Breakdown - Price falls below support
Trendline - Diagonal S/R connecting highs/lows
Moving Average (MA) - Smoothed price line (e.g., 50MA, 200MA)
Relative Strength Index (RSI) - Momentum indicator (30-70 scale)
VWAP - Volume-Weighted Average Price
Gap - Price jump between sessions with no trading
ADR - Average Daily Range
ATR - Average True Range (volatility measure)
Wick Back - Long candle wick signaling reversal
Chop - Sideways, erratic price action

D. Trading Strategies & Styles

Scalping - Profiting from tiny price moves (seconds/minutes)
Momentum Trading - Riding strong volume-driven trends
Range Trading - Buying support, selling resistance
Swing Trade - Holding positions for days/weeks
Fading - Betting against sharp price moves
News Trading - Capitalizing on headline reactions
Recycling Shares - Scaling in/out of max position size

E. Risk Management & Psychology

Risk-Reward Ratio (R/R) - Potential loss vs. gain (e.g., 1:2)
Position Sizing - Capital allocation per trade (1-2% rule)
Drawdown - Peak-to-trough account decline
FOMO - Fear of Missing Out (emotional chasing)
Revenge Trading - Overtrading to recover losses
Market Tuition - Losses that teach valuable lessons
Bag Holder - Holding losing position at poor cost basis

F. Market Participants & Entities

Market Maker (MM) - Provides liquidity (e.g., Citadel)
Retail Traders - Individual traders
Institution - Large entity (hedge funds, banks)
Whale - Trader with massive capital
SEC - Securities and Exchange Commission
PPT - Plunge Protection Team (alleged market stabilizers)

G. Advanced Concepts & Events

Dark Pool - Private exchange for anonymous trades
Quadruple Witching - Quarterly derivatives expiry (high volatility)
Liquidity Event - Sharp move letting insiders exit
R/S (Reverse Split) - Share reduction + price adjustment
SSR - Short Sale Restriction (no shorting on downticks)
Iceberg Order - Large hidden order split into smaller lots
Block Order - Large trade (typically 10k+ shares)

H. Rules & Account Terms

Margin - Borrowed funds to increase buying power
Margin Call - Forced liquidation due to excessive losses
Pattern Day Trader (PDT) Rule – U.S. regulation requiring a minimum $25,000 equity in a margin account for unlimited day trades (applies to 4+ round-trip trades in 5 business days).
Margin Account – Brokerage account allowing borrowed funds (leverage) for trading.
Cash Account – No leverage; trades settle with available cash (avoids PDT rule but has other restrictions).
Settlement Period (T+1) – Time for trades to finalize (now 1 business day for U.S. stocks; was T+2).
Day Order – Expires if not filled by market close.
Round-Trip Trade – A buy and sell (or sell and buy) of the same security on the same day.
Violation of Cash Account Rules – Selling unsettled funds before T+1 settlement (can trigger restrictions).
Short Sale Rule (SEC Rule 201) – Triggers SSR (Short Sale Restriction) if a stock drops 10%+ in a day (no shorting below last bid).
Buying Power – Maximum amount available to trade (varies by account type: cash vs. margin).
Leverage – Borrowed capital to amplify positions (e.g., 4:1 intraday leverage in margin accounts).
Day Trading Buying Power – Typically 4x your excess margin for day trades (e.g., $25k account = $100k buying power).
Forced Liquidation – Broker closes positions if margin requirements aren’t met.
Regulation SHO – SEC rule targeting naked short selling and fails-to-deliver.
Wash Sale Rule – Disallows claiming losses if the same security is repurchased within 30 days (IRS tax rule).

I. International Trading Rules

FINRA Rules – Governs U.S. broker-dealers (e.g., FINRA Rule 4210 on margin requirements).
MiFID II – EU regulation on transparency and reporting.
Short Selling Bans – Temporary restrictions in some markets (e.g., during crashes).

Stock Fundamentals & Ownership

A. Stock Fundamentals & Ownership

Share – Ownership certificate in a company.
Outstanding Shares – Total shares held by all shareholders (including insiders/institutions).
Float – Shares available for public trading (excludes insiders/restricted shares).
Float Lock – When a large percentage of the float is accumulated, reducing liquidity.
Market Capitalization (Market Cap) – Company value (shares × price). ("The bigger the market cap, the slower the mover" is a trading observation, not a term.)

B. Offerings & Capital Raising

Offering – Company sells shares to raise capital (increases float).
Initial Public Offering (IPO) – First sale of shares to the public.
Shelf Offering – SEC-approved provision to sell shares over time (via S-1/S-3 filings).
EFFECT – SEC confirmation that a shelf offering is live.
At-the-Market (ATM) Offering – Shares sold incrementally on the open market.
Baby Shelf Rule – Limits secondary offerings to 1/3 of MVPHS (if <$75M over 60 days).
Dilution – New shares issued, reducing existing shareholders’ ownership %.
Warrant – Derivative allowing purchase/sale of shares (dilutive when exercised).

C. Market Mechanics & Manipulation

Float (Supply & Demand) – Low float = higher volatility (limited supply → price spikes).
Micro Shelf – Temporary price prop above resistance to unload shares before a drop.
Infinite Dump – Sudden, extreme price drop through multiple support levels.
Manipulator – Entity controlling price action to create liquidity (e.g., pump/dump).

D. Institutional Terms

Institutional Investor – Large entity investing capital (hedge funds, pensions).
Institutional Ownership (IO) – % of shares held by institutions. High IO (>40%) may indicate manipulation potential.
Financial Institution – Entity handling financial transactions (banks, brokerages).

level 2

A. Order Book & Market Data

Level 2 (Market Depth)
- Real-time display of all live bids/asks (also called Montage in DAS Pro).
- Shows market maker IDs, order sizes, and price levels.

Tape (Time & Sales)
- Live record of executed trades (price, volume, time).

Quote
- Current trading price of a security (bid/ask midpoint).

B. Order Types & Execution

Bid: Highest price a buyer is willing to pay.
Ask/Offer: Lowest price a seller is willing to accept.
Limit Order: Buy/sell at a specified price or better.
Market Order: Immediate execution at current best available price.
Stop-Limit Order: Triggers a limit order when a stop price is hit.

C. Trading Halts & Volatility Controls

Halt Types (SEC/NASDAQ):
- T1 Halt
  - Paused due to pending news.
- T2 Halt
  - News released but trading remains halted.
- T3 Halt
  - Resumption time announced after T2.
- T12 Halt
  - Indefinite suspension (info request from issuer).

Halt Bands (LULD)
- Price bands (Lower/Upper Limit) triggering halts if breached for >15 seconds.
- Part of the Limit Up-Limit Down (LULD) mechanism.

Circuit Breaker
- Market-wide pause if indices drop 7% (Level 1), 13% (Level 2), or 20% (Level 3).

Short Selling & Squeeze Dynamics

Core Short Selling Terms

Short Selling
- Selling a borrowed security with intent to repurchase later at a lower price.
- Risk: Unlimited losses if price rises (must buy back higher).

Easy to Borrow (ETB)
- Securities readily available for short selling (no share-locating required).

Hard to Borrow (HTB)
- Securities scarce for shorting (high borrow fees, may require pre-borrow).

Short Sale Restriction (SSR / Rule 201)
- Triggered when a stock drops 10%+ intraday.
- Shorts allowed only on upticks until next trading day.

Squeeze & Volatility Phenomena

Short Squeeze
- Rapid price surge as shorts cover positions, fueling more buying.
- Catalysts: High short interest + sudden bullish momentum.

Squeeze from Hell
- Extreme version of short squeeze:
  - Massive green candle obliterating resistance levels.
  - Opposite of Infinite Dump.

Panic Pop
- Sudden, violent price spike (often news-driven or manipulation).

Panic Pop Short
- Immediate reversal after a Panic Pop (traps late buyers).

Parabolic Move
- Exponential price rise (resembles vertical chart line).
- Opposite: Falling Knife (rapid decline).

More terms

General Trading Terms

A

Advance/Decline Line (A/D) - Tracks net difference between advancing and declining stocks, plotted cumulatively.
Ask - Lowest price a seller will accept for a security.
Ask Size - Total quantity offered at the current ask price.
At the Money (ATM) - Option strike price equals the underlying security's price.
Averaging Down - Buying more of a falling asset to lower average cost.

B

Bear Market - Prolonged market decline (≥20% drop from highs).
Bear Trap - False breakdown below support, trapping short sellers.
Bid - Highest price a buyer will pay for a security.
Bid Size - Total quantity demanded at the current bid price.
Black Box - Algorithmic trading system with opaque logic.
Blue Chip Stock - Large, financially stable company (e.g., Coca-Cola).
Breakaway Gap - Price gap signaling trend continuation (not filled quickly).
Bull Market - Sustained market uptrend.
Buying Into Weakness - Purchasing during a pullback.

C

Call Option - Right (not obligation) to buy an asset at a set price.
Candlestick - Price chart showing OHLC (Open, High, Low, Close).
Chart Analysis - Predicting price moves using historical patterns.
Choppy Market - Erratic, trendless price action.
Commission - Broker fee per trade.
Commodity - Physical goods traded (e.g., oil, gold).
Correction - Price decline ≤20% from recent peak.

D

Day Order - Expires if unfilled by market close.
Day Trading - Opening/closing positions within one trading day.
Divergence - Price and indicator trendlines oppose each other.
Dow Jones Industrial Average (DJIA) - Price-weighted index of 30 large U.S. stocks.
Dow Theory - Trend confirmation via DJIA and Transportation Index.

E

Elliott Wave Theory - Price moves in repetitive 5-3 wave patterns.
Equities - Stocks representing company ownership.
ETF (Exchange-Traded Fund) - Tracks index/commodity; trades like a stock.
Exhaustion Gap - Gap filled quickly, signaling trend reversal.
Expiration Date - When an option contract becomes void.

F

Filters - Rules to eliminate low-probability trades.
Front Month - Nearest-term futures/options expiry.
Fundamental Analysis (FA) - Evaluating securities via financials/news.
Futures - Contracts to buy/sell assets at a future date/price.

G

Gap - Price opens above/below prior close with no trading in between.
Good Till Cancel (GTC) - Order active until filled/canceled (90-day max).
Good Till Date (GTD) - Order expires on a specified date.

H

Hedge - Offset risk with opposing positions.
Hedge Fund - Aggressive, loosely regulated investment pool.
HOD (High of Day) - Highest intraday price.

I

Index - Basket of stocks measuring market performance (e.g., S&P 500).
Indicator - Mathematical tool to forecast price (e.g., RSI, MACD).
IPO (Initial Public Offering) - Company’s first stock sale to the public.

L

Laggard - Stock/sector underperforming the market.
Leader - Stock/sector outperforming the market.
Limit Order - Buy/sell at a specified price or better.
Liquidity - How easily an asset trades without price impact.
LOD (Low of Day) - Lowest intraday price.
Long - Owning an asset (betting on price rise).

M

Margin Account - Borrows funds from broker to trade.
Market Capitalization - Company value (shares × price).
Market Order - Executes immediately at best available price.
Momentum - Speed of price/volume movement.

O

Open Interest - Total active options/futures contracts.
Option - Derivative granting right (not obligation) to buy/sell an asset.

P

Pattern Day Trader (PDT) - U.S. rule: 4+ round-trip trades in 5 days requires $25k account.
Put Option - Right to sell an asset at a set price.

R

Resistance - Price level where selling pressure increases.
Risk/Reward (R/R) - Potential loss vs. gain in a trade.

S

Short Selling - Borrowing shares to sell, hoping to buy back cheaper.
Support - Price level where buying interest increases.

T

Technical Analysis (TA) - Forecasting prices via charts/indicators.
Trend - Sustained price direction (up/down/sideways).

V

Volatility - Degree of price fluctuations.
Volume - Number of shares/contracts traded.

W

Washout - High-volume drop flushing out weak holders.
Whipsaw - False signal causing losing trades.