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Investing for beginners: The basic stock market jargon you need to know

by , 07 July 2015

If you're new to investing, you may find the language or ‘jargon' used confusing.

But don't let this hold you back from investing.

Here's the basic terms you need to know to start investing in shares…


14 investing terms you need to know


Here are 14 of the most common terms you need to know about investing on the stock market

AltX:
The alternative exchange on the JSE for smaller companies to list on. This is where you’ll find many penny stocks.

Ask:
This is the price you can buy a share at from your stock broker. This is also known as the offer price.

Bid:
This is the price you can sell your shares at.

Bid/offer spread:
This is the difference between the bid and offer (ask) price or the buying and selling price. For large companies on the stock market, the spread tends to be tighter than smaller, less traded companies.

Blue chips:
These are the biggest shares on the stock market with the highest market capitalisations.

Brokerage:
What you pay your stock broker when you buy and sell shares.

Closing price:
This is the last price of the trading day for a specific share.

Dividend:
This is a share of a company’s profits shareholders can receive.

JSE:
This is South Africa’s stock market, the Johannesburg Stock Exchange.

Market capitalisation:
This is the total value of a company’s shares. In other words, this is the number of shares in issue multiplied by the current share price.

Offer:
This is the price you can buy a share at from your stock broker. This is also known as the ask price.

Ordinary shares:
This is the most common form of shares and likely the ones you’ll buy. As a shareholder, you may receive dividends and can vote in annual general meetings (AGMs).

Penny stocks:
Shares that trade for less than R10 each on the JSE.

Stock broker:
A member of the JSE that you can buy and sell shares through, and ask for advice about investing.

So there you have it. The basic stock market jargon you need to know.

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Investing for beginners: The basic stock market jargon you need to know
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