Glossary of Common Trading Terms

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Questions and Answers

What is the ask price in trading?

The highest price a buyer is willing to pay for a security
The lowest price a seller is willing to accept for a security (correct)
The current market price of a security
The average price of a security over time

What does arbitrage involve in trading?

The long-term investment in a security
The simultaneous purchase and sale of an asset in different markets to profit from price discrepancies (correct)
The analysis of market trends
The purchase of securities based on company fundamentals

What is the bid price?

The lowest price a seller is willing to accept
The highest price a buyer is willing to pay for a security (correct)
The average price over a week
The last traded price

What characterizes a bull market?

Rising prices and investor optimism (C) Signup and view all the answers

What characterizes a bear market?

Falling prices and investor pessimism (A) Signup and view all the answers

What is a call option?

A financial contract giving the holder the right, but not the obligation, to buy an asset at a specified price within a specified period (D) Signup and view all the answers