Stock Market Trading Overview

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Questions and Answers

What is the primary focus of trading compared to investing?

  • Ownership of productive assets
  • Long-term growth strategy
  • Passive income generation
  • Technical analysis (correct)

Which of the following best defines 'blue chips' in stock market terminology?

  • The top 30 biggest companies in the market (correct)
  • High volatility stocks with low market value
  • Stocks with high dividend yields only
  • Newly listed companies on the exchange

What does a 'bull market' indicate in terms of stock prices?

  • Prices are expected to rise (correct)
  • Demand is lower than supply
  • Market uncertainty is high
  • Prices are expected to fall

What is the term for companies with lower market capitalization?

<p>Penny stocks (A)</p> Signup and view all the answers

Which term is used to indicate the selling price of a stock?

<p>Ask (C)</p> Signup and view all the answers

What does 'price appreciation' refer to in the context of stocks?

<p>The stock price increases in value (D)</p> Signup and view all the answers

Which of these describes a 'bear market'?

<p>Stock prices are expected to fall (A)</p> Signup and view all the answers

What does 'bid' refer to in stock trading?

<p>The price that a buyer is willing to pay for a stock (A)</p> Signup and view all the answers

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Flashcards

Blue Chips

The top 30 largest companies in the stock market, often considered stable and reliable investments.

Board Lot

The minimum number of shares that can be bought or sold in one transaction.

Dividend

The profit distributed by a company to its shareholders.

Price Appreciation

An increase in the value of a stock.

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Penny Stocks

Stocks of companies with lower market capitalization, often considered riskier but with potential for higher returns.

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Stock Code

The unique symbol assigned to each company listed on the stock exchange.

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Bid

The price at which a buyer is willing to purchase a stock.

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Ask

The price at which a seller is willing to sell a stock.

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Study Notes

Stock Market Trading Overview

  • The presentation is a masterclass on stock market trading, by Benneth A. Aloyon, MIT, Dean/Executive Consultant.
  • Topics covered include differentiating investing from trading, types of trading and stock market overview, trading plan setup and execution, trading edge and three essential elements.

Investing vs. Trading

  • Investing: Focuses on productive assets (stocks, real estate, businesses) and fundamental analysis, aiming for passive income over medium to long terms (years).
  • Trading: Focuses on zero assets (forex, crypto, options, futures) and technical analysis, targeting active income in short terms (months, weeks, hours, minutes).

Basic Stock Market Terms

  • Blue Chips: Top 30 biggest companies.
  • Boardlot: Minimum number of shares, a bundle.
  • Dividend: Company profit distributed to shareholders.
  • Price Appreciation: Stock price increase impacting value.
  • Penny Stocks: Companies with low market capitalization.
  • Stock Code: Company symbol listed on PSE.
  • Bid & Ask: Bid is buying price; ask is selling price.
  • Bull Market: Stock prices expected to rise, higher demand.
  • Bear Market: Stock prices anticipated to fall, higher supply.
  • Trend: The direction of stock price (uptrend, downtrend, sideways).
  • Portfolio: Collection of stocks or investments owned by an investor.
  • Last Market Price: Current price of the stock.
  • Quote: Information on the stock's latest price.
  • Unrealized Gain/Loss: Change in stock value, but not yet realized from a sale.
  • Resistance: Ceiling where selling pressure occurs.
  • Support: Flooring where buying pressure occurs.
  • Overbought: Potential price pullback.
  • Oversold: Potential reversal or price recovery.
  • Indicator: Technical tools for interpreting price action.
  • Volume: Number of shares traded daily.
  • Volatility: How quickly market prices change.

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