If you are a totally new beginner to the stock market, mostly likely you are unfamiliar with the stock market terminology being used by the market. Maybe you have always heard about them on the TV news or newspapers but do not know exactly what these terms actually mean.
We will give you some simple explanations on such market terminology below so that you can better understand the market.
1. Insiders are individuals within a company who have material knowledge about the financial status of the company which is not yet known outside of the company, which is why they are known as the Insiders.
2. Institutions are the large brokerage houses that buy and sell stocks in very large quantities. Some examples of these large brokerage houses are Merrill Lynch, Goldman Sachs etc.
3. Retail investors are the general public who invest in the stock markets.
4. Bullish Market: When we say we are bullish about a stock or bullish about a stock market, our expectation is that the market should go higher.
5. Bearish Market: When we say we are bearish on a stock or bearish on the stock market, then our expectation is that the market should go lower.
6. Bid Price Vs Ask Price: When we want to buy or sell a stock, we will be a buyer at the Ask Price and look to sell at the Bid Price. The difference between the Bid and Ask Prices is the Spread. The person who gets the spread is known as the market maker because that is their job. They match buy and sell orders, thus they make a market.
We hope our short explanations above will give you a better understanding of the terminologies. If you are interested to find out more, you can check out our options trading course which provides more comprehensive step-by-step training for beginners new to options trading.