80 STOCK MARKET TERMINOLOGY FOR BEGINNERS
- KidVestors
- Dec 25, 2025
- 7 min read
Updated: 4 days ago
What you'll learn:
If you have ever tried dipping your toes into investing and felt like you accidentally walked into a secret club with its own language, you are not alone. The stock market can feel confusing at first, but once you get familiar with the common vocabulary, everything becomes way less intimidating. Think of this guide as your personal cheat sheet to the eighty most important stock market terms every beginner should know.
What is the Stock Market ?
The stock market is a place where people buy and sell pieces of companies, called stocks. It works like an online marketplace where investors trade ownership shares while prices rise and fall based on supply, demand, and how well the company is doing.
Why Understanding Stock Market Terms Is Important
Trying to invest without knowing basic stock market terms is like playing a game with no understanding of the rules. The more familiar you are with the language, the easier it becomes to make confident decisions, spot opportunities, and avoid common mistakes. These terms help you understand what is happening when prices change, why companies behave the way they do, and what investors look for.
Alright. Let us jump into the good stuff. Here are 80 stock market terminology explained in the simplest way possible.
80 Stock Market Terminology Every Beginner Should Know
Common stock market terms glossary
Stock
A piece of ownership in a company. If you own Apple stock, you own a tiny piece of Apple.
Share
One individual unit of stock. If you buy 10 shares, you own 10 pieces of that company.
Shareholder
Someone who owns shares in a company. If you own one share of Disney, you are a shareholder.
Portfolio
Your collection of investments. Think of it like your personal money backpack.
Stock Exchange
A place where stocks are bought and sold. The New York Stock Exchange is a popular one.
Brokerage Account
A brokerage account lets you buy and sell investments. It works like a bank account but for stocks.
Bull Market
A bull market is a period when stock prices are rising. Think of a bull charging upward.
Bear Market
A bear market is a period when stock prices are falling. Bears swipe down which helps you remember the meaning.
Market Order
An order to buy or sell a stock immediately. You take the best available price at that moment.
Limit Order
An order to buy or sell at a specific price. You set your limit and the trade only happens if the market hits that price.
Bid Price
The highest price buyers are willing to pay. It shows what people want to spend right now.
Ask Price
The lowest price sellers are willing to accept. It shows what sellers will take right now.
Spread
The difference between the bid and the ask price. A small spread usually means the stock is popular and traded often.
Dividend
A dividend payment companies give to shareholders from their profits. Think of it as a thank you for investing.
Dividend Yield
How much a company pays in dividends compared to its stock price. It helps you compare dividend stocks.
Capital Gain
Capital gains are profits from selling your investment for more than you paid. Buy at 10 sell at 20 and you gained 10.
Capital Loss
When you sell for less than you paid. Buy at 10 sell at 5 and you lost 5.
Index
An index is a group of stocks that represent part of the market. For example, the S&P 500 index tracks 500 large companies.
Index Fund
An index fund invests in all the companies in an index. It is like buying a big bundle of stocks at once.
ETF (Exchange Traded Fund)
An ETF trades like a stock. You get a mix of investments in one simple purchase.
Mutual Fund
A pool of money from many people invested together. A manager chooses the investments for you.
Blue Chip Stock
A large stable well known company. Think of companies like Coca Cola or Microsoft.
Penny Stock
A very cheap stock that often comes with high risk. Usually under 5 dollars per share.
IPO (Initial Public Offering)
When a company sells stock to the public for the first time. It is like opening day on Wall Street.
Market Capitalization
The total value of a company based on its stock price and shares. Big companies have big market caps.
Volume
How many shares are traded in a day. High volume means lots of activity.
Liquidity
How easily you can buy or sell a stock. Highly liquid stocks move quickly.
Volatility
How much a stock price moves up or down. Big swings mean high volatility.
Long Term Investing
Keeping investments for years. You are planning for the future not tomorrow.
Short Term Trading
Buying and selling within days or weeks. It is much faster and riskier.
Diversification
Spreading your money across many investments. It helps lower risk.
Risk Tolerance
How much risk you are comfortable taking. Some people like roller coasters while others prefer calm rides.
Return on Investment (ROI)
How much money you earn compared to what you invested. If you put in 100 and make 10 your ROI is 10 percent.
Asset
Something you own that has value. A stock is an asset because you can sell it.
Liability
Something you owe. Loans are liabilities.
Earnings Report
A company’s financial update released each quarter. It tells investors how the company is doing.
Revenue
How much money a company brings in from selling products or services.
Profit
Money left after expenses. If you earn 100 and spend 60 your profit is 40.
P E Ratio (Price to Earnings)
A way to measure how expensive a stock is compared to its profits.
Market Crash
A sudden sharp drop in stock prices. It usually scares everyone.
Correction
A smaller drop in stock prices usually around 10 percent.
Share Buyback
When a company buys its own shares. This often makes the remaining shares more valuable.
Split
A stock split is when a company increases the number of shares by splitting them. Two for one means every share turns into two.
Reverse Split
A reverse split is the opposite of a stock forward split. This occurs when shares are combined to raise the price per share.
Broker
A person or platform that helps you trade stocks.
Day Trading
Buying and selling stocks within the same day. It is fast and risky.
Swing Trading
Holding stocks for a few days or weeks to catch price swings.
Bullish
Believing prices will go up.
Bearish
Believing prices will go down.
Advanced Stock Market Terms
Speculation
Making risky bets hoping for big rewards.
Intrinsic Value
What an investment is truly worth based on fundamentals.
Market Value
The current price of a stock in the market.
Stop Loss Order
An order that sells your stock automatically if it hits a certain price to limit your loss.
Payout Ratio
Shows what percentage of profits a company pays out in dividends.
Yield Curve
A chart that shows interest rates for different loan lengths.
Earnings Per Share (EPS)
How much profit a company makes per share.
Beta
A measure of how much a stock moves compared to the overall market.
Leverage
Using borrowed money to invest. It increases risk and reward.
Hedge
A strategy to protect against losses.
Recession
A period of economic decline that affects the market.
Sector
A group of companies in the same industry like technology or healthcare.
Diversified Fund
A fund that spreads money across many sectors.
Analyst Rating
A report that suggests to buy hold or sell a stock.
Margin Account
An account that lets you borrow money to invest.
Margin Call
A warning that you must add more money to your margin account.
Short Selling
Betting that a stock will drop in value.
Float
The number of shares available for the public to trade.
Overvalued
When a stock price is higher than what the company is worth.
Undervalued
When a stock price is lower than the company’s true value.
FOMO
Fear of missing out which makes people buy too quickly.
Bag Holder
Someone stuck holding a stock that has fallen a lot.
Liquidity Ratio
Shows how easily a company can pay its debts.
Option
An option is a contract that lets you buy or sell a stock at a certain price by a certain date.
Call Option
A bet that a stock will go up.
Put Option
A bet that a stock will go down.
Time Horizon
How long you plan to keep an investment.
Risk Premium
Extra return you expect for taking more risk.
Crypto
Cryptocurrencies are digital assets that also trade on markets.
Ticker Symbol
Short letters that represent a company on the exchange like AAPL for Apple.
Volatility Index (VIX)
A measure of how much volatility investors expect in the market.
How KidVestors Makes Learning Stock Market Terminology And Definitions Fun for Kids and Teens
At KidVestors, we take all of this financial jargon and stock market terminology and make it kid friendly. Students learn these terms in small bite sized lessons, play through interactive scenarios, get hands on practice using our risk free stock market simulator, and earn real cash and stock as they learn.
So, before they ever touch a real investment account, they already understand the basics and feel confident making informed choices. It is education plus experience and the perfect way to build future investors who know exactly what they are doing.
Learning stock market terms does not have to feel overwhelming. When you break them down simply and see real examples, the whole world of investing starts to make sense. At KidVestors, we make sure kids and teens grow up understanding these concepts early while also practicing in a risk free simulator that builds confidence. The more you learn the more empowered you feel and the better financial decisions you make in the long run.
If you want to help the young investor in your life get a head start, our platform is the perfect place to begin.
Ready to help your kids and teens learn the stock market?
STOCKS FOR KIDS AND TEENS
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