For someone unfamiliar with the stock market, investing can seem like an overwhelming feat. And if you’re trying to educate yourself or working with a broker, the terms they use can seem a bit confusing. Both Robert Wilkos and John LoPinto recommend you know a few terms about the stock market before investing, though. 

Ask

While ask seems like a simple term, it means something specific in the investment world. This word refers to how much a trader is offering shares at, which is the price they want to sell the stock. 

Dividend

When a company pays a dividend, they pay out a portion of their earnings. It will be a percentage given at specific intervals. Long-term investors and retirees tend to favor these stocks. Keep in mind that only some companies pay dividends.

Hedge Funds

This particular investment is a fund that doesn’t use traditional trading and investment methods. In general, these funds are more profitable. However, they’re typically for investors with a high net worth.

Mutual Funds

A mutual fund occurs when investors invest in bonds, stocks, and other investments together.

Averaging Down

When a buyer invests down, they purchase shares when a stock drops. As a result, it lowers the average price paid. While it seems like a commonsense move, it’s more beneficial for long-term investors than it is for active traders.

Bid-Ask Spread

The bid-ask spread refers to the window between the highest and lowest prices a holder is willing to sell stocks.

Limit Order

Sometimes, the trader will want stockholders to purchase a certain number of shares at a specific price. This is known as a limit order. For instance, the trader may request buyers purchase 200 shares of a stock at $20.19.

Market Order

While all terms related to the stock market are important, some more than others depending on your intentions, John LoPinto and Robert Wilkos want you to know this word. It means a type of stock that must be bought and sold as fast as possible. It’ll also specify that it must be purchased at the current price. As a general rule, you should avoid market order stocks if you’re trading penny stocks.

Volatility

This is a measurement of how much a stock increases or decreases. When a stock moves up or down sporadically and without reason, it’s known as a volatile stock. John LoPinto and Robert Wilkos want you to know that these are risky investments.

Trading Volume

The trading volume is a figure that represents how many shares are being traded at a specific point. Typically, when a stock is more active, buyers can enter and exit more easily.

While these are only some of the words that John LoPinto and Robert Wilkos think you should know, they are some of the most important. They can help you as you enter into the investment world.