The new investor’s glossary: L to M

Fsp Invest, 17 Jan. 2014

Tags: investment, glossary, definitions, terminology, investing, investors glossary, liquid, listing, long position, market capitalisation, market indicators, market makers, market price, mid-price, minority shareholders

As a stock market beginner, the array of different terminology and market ‘lingo’ can leave you reeling. But if you spend a little bit of time getting to grips with some of the main terms you’re more likely to come across, you’ll make your stock market journey as easier one. Read on to uncover the most important investing terms starting with L to M…

Expanding your knowledge of stock market terminology will help you feel more confident about what you’re doing when you invest on the stock market, the research team at Red Hot Penny Shares explain…

Your vital investment glossary

Liquid: This is a market or shares with a lot of buyers and sellers. This makes buying and selling easy and usually means a narrow bid/offer spread.

Listing: This is an official granting of a quotation of a company’s shares on the stock market, such as the Johannesburg Stock Exchange. This means you can buy and sell shares of this company on the stock market. This happens when the exchange grants a company a listing when it’s has fulfilled the exchange’s listing rules and requirements.

Long position: This is holding shares you’ve bought, with either the view of selling them or keeping them for the long-term. This is another way of saying you are “bullish” of shares. This is the opposite of a short position.

Market capitalisation: This is the total value of a company’s shares. You can calculate this by multiplying the number of shares in issue by the share price.

Market indicators: These are statistics that give an overall picture of how the market is performing.

Market makers: Theses are middlemen prepared to buy and sell shares in the absence of market liquidity. They provide liquidity to the market and determine the bid/offer spread.

Market price: This is the ruling price of shares on the exchange.

Mid-price: This is a price halfway between the bid and the offer price. You can’t actually buy or sell at this price but traders generally use it to indicate value and movement in share listing.

Minority shareholders: These are shareholders who, individually or collectively, own fewer shares than the controlling group.

You can check out G to J here.

So there you have it, your new investor’s glossary from L to M.

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