Stock Market

Terminology

S c h o o l o f A c c o u n ti n g a n d F i n a n c e
University of Central Punjab
 Bull
An investor who foresees an increase in share prices
in the market
 Bear
Bear is an investor
who foresees a
decline in the
stock prices in the
market
 Bullish market
A market which has a going up i.e. prices are
increasing
 Bearish market
A market which is going down i.e. where prices are
decreasing
 Bearish Sentiment
The term sentiment is used for mood i.e. if prices are
generally declining we say that there was a bearish
sentiment in the market
 Bullish Sentiment
Again this term refers to the mood of the market.
When prices are generally increasing then it is called
bullish sentiment
 Blue Chips
These are the stocks of those companies, which are
financially very strong. Prices of blue chips always go
up, companies always pay good dividend.
Dead Cat Bounce
A little and temporary
recovery in stock
market after a huge
downfall
 Lame Duck of the Market
The term is used for the investor who sustains
maximum loss in the market
 Diversification
It is a technique to reduce risk. It means investing the
total amount not in one security but in a large
number of securities
Bloodletting
A period of severe
investing losses.

The term comes from

a medieval medical
practice that involved
bleeding out a patient.
It was believed that
afflictions resided in
the blood and could be
eliminated by draining
away a large quantity.
Thankfully, this
practice has been
abandoned.
Turkey
Slang for an
investment that yields
disappointing results
or turns out worse
than expected. Failed
business deals,
securities that realize
significant losses and
unsuccessful initial
public offerings
(IPOs) could all be
called "turkeys".
Capitulation
It is a military term.
Capitulation refers to
surrendering or giving up.
In the stock market,
capitulation is associated
with "giving up" any
previous gains in stock
price as investors sell
equities in an effort to get
out of the market and into
less risky investments. True
capitulation involves
extremely high volume and
sharp declines. It usually is
indicated by panic selling.
Panic Selling
Wide-scale selling
of an investment,
causing a sharp
decline in price. In
most instances of
panic selling,
investors just want
to get out of the
investment, with
little regard for the
price at which they
sell.
Falling Knife
A slang phrase for a
security or industry in
which the current
price or value has
dropped significantly
in a short period of
time. A falling knife
situation can occur
because of actual
business results (such
as a big drop in net
earnings) or because
of increasingly
negative investor
sentiment.
Correction
A reverse movement,
usually negative, of at least
10% in a stock, bond,
commodity or index.
Corrections are generally
temporary price declines,
interrupting an uptrend in
the market or asset.
Penny Stock
A stock that trades at
a relatively low price
and market
capitalization. These
types of stocks
are generally
considered to be
highly speculative and
high risk because of
their lack of liquidity,
large bid-ask
spreads, small capitali
zation and limited
following and
disclosure.