Accumulation - The act of buying more shares of a security over a period of time to avoid forcing the market higher with a single purchase.
Bidding- Placing a limit order to buy the stock on the bid
Block Trade - A large transaction that is negotiated off a trading floor or facility and then executed on an exchange’s trading facility, as permitted under exchange rules. In general, 10,000 shares of stock (not including penny stocks) or $200,000 worth of bonds would be considered a block trade. Block Trades are normally undertaken by institutional investors.
Bounce – When a stock, or the market itself, starts to go up after a down move.
Breakout - A Breakout is a price movement that pierces the upper or lower boundaries of a trading range.
Chip Away – When down a good amount of money, this is what a trader needs to do to his/her negative balance.
Chirp – Something that was mentioned by CNBC, a website or the speaker guy.
Choppy - A market or stock that moves violently back and forth in direction AND is difficult to determine in what direction
Churning - Excessive trading of a discretionary account by a person with control over the account for the purpose of generating commissions while disregarding the interests of the customer.
Confirmation - Traders often look more than one signal to confirm their opinion on the price direction of a security. Confirmation refers to a subsequent signal that validates or reinforces the trader’s opinion on where the issue is heading
Correct price of a stock - The price we think a stock should trade at based upon previous trading experience.
Cover – To close out a short position.
Decrement —An order decreasing in size as people execute against the order
Double Down – When you are losing money in a position and decide to buy or sell twice as much as you had before. Rarely works out well.
Drop—When the Best Bid disappears from the Box because its order to buy is complete
Explosion (Explosive Move) – When a stock or the futures, seemingly out of nowhere, go up a large amount
Fade—To take a position that is counter to the current trend of a stock. The position is established at the end of an up or down leg.
Get Flat – To close out a long position.
High Bid – A high bid is a bid one penny above the best current market bid.
Hit (Hit the Bids) – To sell out of your position.
Hidden Order—An order placed through NSDQ that doesn’t appear on the Box.
Hunt Order—An order to buy or sell that automatically executes against a particular price.
Indicator – Futures are an example of an indicator. Is more probable a stock will move in the direction of its respective indicator.
Intraday High & Low – The high and low for that day for a stock or for the futures
Intraday Support & Resistance – The support and resistance levels for that day for a stock or for the futures.
Lift/Get Up—When the Low Offer disappears from the Box because its order to sell is complete
Lighten Up – To close out part of your position. If you had two lots, after lightening up, you only have one lot left.
Liquidity - Describes the level to which a security can be traded without significantly affecting price. A liquid security can undergo a high volume of trading without a significant change in price.
Lot – A batch of stock. For those just starting, a lot is usually 100 shares.
Low Offer – A low offer is an offer one penny bellow the best current market offer.
Market Order - An order to buy or sell a security at whatever price is obtainable at the time it is entered in the ring, pit, or other trading platform.
Market Maker - A professional securities dealer or person with trading privileges on an exchange who has an obligation to buy when there is an excess of sell orders and to sell when there is an excess of buy orders. By maintaining an offering price sufficiently higher than their buying price, these firms are compensated for the risk involved in allowing their inventory of securities to act as a buffer against temporary order imbalances.
Momentum stock – Stock that moves a lot; has a lot of activity.
Multiple lots – When you like what you see and increase the size of your position. You usually initiate a position with one lot and increase it one lot at a time.
Offering - Placing and order to sell or get short on the offer
Opening Price - The price (or price range) recorded during the period designated by the exchange as the official opening.
Opening - The period at the beginning of the trading session officially designated by the exchange during which all transactions are considered made "at the opening."
Pairs trading - a strategy that consists of buying one stock in a given industry, and selling short another stock, usually in the same industry. The strategy seeks to identify two companies with common characteristics (eg Coke and Pepsi) whose prices are trading out of line with each other - trading outside of their historical trading range. The undervalued stock is bought while the over valued stock is sold short.
Pay the offer- to buy a stock by taking the offer as opposed to buying the stock on the bid
P&L – Profit & Loss. What a trader has made or lost in a given day.
Piker—generally used to refer to Specialists or other Market Makers who have no idea how to trade
Position – The side that you are in a stock. What you are holding; either short or long.
Price Improvement—An execution at a better price than the limit order that is placed
Printing below the Bid or above the Offer – Usually a panic sign! Things may get a lot worse.
Printing on the Bid or on the Offer – When a stock trades at the inside bid or inside offer.
Program – When a stock is being dictated by computer-run trade programs. Makes it very difficult to trade. However, they are a fact of life.
Pullback – When a stock is strong (going up) and comes off (goes down) a little bit. The thought is that it will probably go back up again at some point.
Range - The difference between the high and low price of a commodity, futures, or option contract during a given period
Reading the Tape – Watching and interpreting the Time and Sales as it comes across. Some traders make good money doing this.
Rip – A trade that turned out badly. An unprofitable trade.
Scalper - A speculator on or off the trading floor of an exchange who buys and sells rapidly, with small profits or losses, holding his positions for only a short time during a trading session. Typically, a scalper will stand ready to buy at a fraction below the last transaction price and to sell at a fraction above, e.g., to buy at the bid and sell at the offer or ask price, with the intent of capturing the spread between the two, thus creating market liquidity.
Scalping – When a trader takes small profits and trades quickly in and out of a stock.
Selling off – When a stock or the futures are going down and the thought is that it will continue to do so.
Slippage - a failure to meet expectation with regard to the execution of an order. Slippage also describes the difference between estimated transaction costs for a trade and the amount paid due to market conditions, poor execution etc.
Short interest – The percentage of a stock’s float that is presently short.
Short Squeeze - When those that are short have to cover to avoid excessive losses. Leads to a seemingly unexplainable up move.
Shot – Having a position for no rational reason. Have hurt many a trader on many different occasions.
Stop Loss Order – This is an order that becomes a market order when a particular price level is reached. A sell stop is placed below the market, a buy stop is placed above the market.
Sweep - Sweep means to hit the bids or pay the offers. Sweep keys are used in replacement of market orders to limit the price at which a trader’s order can be filled. A sweep key sends out an order to be filled immediately in the market, but only at a designated amount away from the current bid or offer; for example, pushing the buy sweep key will buy stock up to 3 cents away from the current bid until your entire order is filled. If your entire order is not filled, the remaining amount will sit on the bid 3 cents away where you started buying (the 3 cent sweep amount can be adjusted). There will be no pop up box after pushing the key to warn you before the execution of the order; similar to a market order.
Swing Trading - Trading in a time frame of one to four days. Swing Traders attempt to exploit short-term price momentum.
Take the Offer – To buy a stock.
Tank – When a stock or the futures are collapsing (going down with speed).
Tick - The minimum fluctuation/movement (up or down) in the price of a security.
Ticket – A lot of 1000 shares. 50,000 shares traded = 50 tickets.
Ticket Average – Your P&L divided by your number of tickets.
Tier size – Same as a lot. The amount of shares that each order is for.
Trend – The pattern a stock is following. It is best NOT to fight the trend.
Unusual Hold—Either a bid or offer that buys/sells an unusually large amount of shares at the same price
Volatility—The amount of price movement in a given stock
