Common Stock Market Terms

Stock market terminology might sound fancy and confusing, but it really isn't. Once you get comfortable with the meaning behind the terms, you'll feel much more secure when using the terminology yourself.

Liquidate

When you sell a stock, you may hear your broker talking about "liquidating" the stock. That means that you are taking a paper asset (the stock) and making it liquid (cash).

Market Value

The market value of a stock is the amount the stock is trading for in the market. It is the price you see on Yahoo! Finance or any other quoting service.

Lot

A lot of stocks is 100 shares. If you buy or sell 100 shares of the same stock, then you have bought or sold a "lot."

Margin Account

A margin account is an account that gives an investor the ability to borrow money from the brokerage firm to buy marginable securities. Margin loans can only make up a certain percentage of the value of the account, and accrue interest.

Limit Order

A limit order is an order you place to buy or sell a stock at a certain price.