Popular trading lingo

Popular trading lingo. Educational series. March 2021.

This document constitutes factual, objective information and nothing contained herein should be construed as constituting any form of investment advice or recommendation, guidance or proposal of a financial nature as contemplated in the Financial Advisory and Intermediary Services Act, 2002 (as amended) (the "FAIS Act") in respect of securities or financial product or any transaction in relation thereto. Nothing in this document should be construed as constituting the canvassing for, or marketing or advertising of financial services. The recipient of this document should consult their own FAIS-approved financial advisor and/or intermediary to obtain suitable advice regarding any investment relating to any securities or financial products..

A bull market is the condition of a financial market in which prices are rising or are expected to rise..

A bear market is when a market experiences prolonged price declines..

Trading is all about making frequent, short-term transactions with the goal of 'beating the market’, or generating greater returns that you would expect by buying and holding the positions over a longer time frame..

Investing is a strategy geared towards managing and growing wealth in the markets over a longer period of time. That is typically years or even decades..

A bid price is a price for which somebody is willing to buy something, whether it be shares, services, or contracts. It is colloquially known as a 'bid' in many markets and jurisdictions..

The ask is the price a seller is willing to accept for a share, which is often referred to as the offer price..

The spread is the difference between the bid price and ask price prices for a particular share..

The Trading volume or volume is the amount of a share that changes hands over some period of time, often over the course of a day..

A thin market refers to a market characterized by a minimal number of buyers and sellers plus high price volatility..

A thick market tends to have high trading volumes as a result of the large number of orders in play..

It is a rate at which the price of a share increases or decreases for a given set of time..

Fundamental analysis (FA) is a method of measuring a shares' intrinsic value by examining related economic and financial factors..

Technical analysis (TA) seeks to predict price movements by examining historical data, mainly price and volume..

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