FZ Finviz

IB Interactive Brokers

RH Robinhood

TDA TDAmeritrade

TOS Thinkorswim

WB Webull

EOD End of day

HOD High of day

NHOD New high of day

LOD Low of day

NLOD New low of day

0DTE Zero Days 'Till Expiriration

AH After Hours

BO Breakout

BP Buying Power

DT Day Trade

ER Earnings Report

ID Intraday

L2 Level 2

LF Low Float

ON Over Night

PDT Pattern Day Trader

PM Pre Market

PRE Pre Market

SL Stop Loss

SR Support Resistance

MA Moving Average

BTO Buy To Open

STC Sell To Close

BTC Buy To Close: Shorting

STO Sell To Open: Shorting

"Dead Cat Bounce"

A brief recovery in the price of a declining stock

"To Valhalla.. or the Grave.."

A reference for financial Gains or Losses

FOMO Fear Of Missing Out

SLINGER All in betting

SCALP Small Move Objective

CURL Form of Price Correction

• Bearish

Bearish Trend in financial markets can be defined as a downward trend in the prices of an industry's stocks or the overall fall in broad market indices.

Being bearish in trading means you believe that a market, asset or financial instrument is going to experience a downward trajectory. Being bearish is the opposite of being bullish, which means that you think the market is heading upwards.

https://www.ig.com/uk/glossary-trading-terms/bearish-definition

• What Does it Mean to be Bearish?

A bearish investor, also known as a bear, is one who believes prices will go down. As with a bullish investor, investors can be bearish about either the market as a whole or individual stocks or specific sectors. Someone who believes, for example, that the stock of ABC Corp. will soon go down is said to be bearish on that company. An investor who foresees a market-wide dip in stocks, bonds, commodities, currencies or alternative investments like collectibles, is said to be bearish because he or she anticipates a sustained and significant downturn.

https://smartasset.com/financial-advisor/bullish-vs-bearish

• Bid-Ask Pricing

You can see the bid and ask prices for a stock if you have access to the proper online pricing systems. You'll notice that they are never the same. The ask price is always a little higher than the bid price. You'll pay the ask price if you're buying the stock, and you'll receive the bid price if you are selling the stock. The difference between the bid and ask price is called the spread. It's kept as a profit by the broker or specialist handling the transaction. The broker's commission is not the same commission you'd pay to a retail broker. In actuality, the bid-ask spread amount goes to pay several fees in addition to the broker's commission

https://www.thebalance.com/understanding-bid-and-ask-prices-3141317

• How Does the Bid-Ask System Work?

The buyer states how much they're willing to pay for the stock, which represents the bid price. The seller names their price, or ask price. It's the role of the stock exchanges and the whole broker-specialist system to facilitate the coordination of the bid and ask prices. This service comes with its own expense, which affects the stock's price. Once you place an order to buy or sell a stock, it gets processed based on a set of rules that determine which trades get executed first. If your main concern is buying or selling the stock as soon as possible, you can place a market order, which means you'll take whatever price the market hands you.

https://www.thebalance.com/understanding-bid-and-ask-prices-3141317

• Difference between Bid and Ask?

As the current price represents the market value of a financial instrument, the bid and ask prices represent the maximum buying and minimum selling price respectively. The bid price, more commonly known as simply the ‘bid’, is defined as the maximum price that a buyer is willing to pay for a financial instrument. The ask price, usually referred to as the ‘ask’, is defined as the minimum price that a seller is willing to accept for the instrument. The bid price is normally higher than the current price of the instrument, while the ask price is usually lower than the current price. The difference between the bid price and ask price is commonly known as the bid and ask spread, bid-offer spread or bid-ask spread​​.

https://www.cmcmarkets.com/en/trading-guides/bid-price-and-ask-price

• Bid-Ask Spread

The bid-ask spread, or the bid and ask spread, is the difference between the bid price and the ask price of an instrument. For example, the difference in price between someone buying a stock and someone selling a stock represents the bid-ask spread.

Both the bid and ask prices are displayed in real-time and are constantly updating. The changing difference between the two prices is a key indicator of the liquidity of the market and the size of the transaction cost.

High liquidity in a financial market​ is often caused by a large number of orders to buy and sell in that market. This liquidity enables you to buy and sell closer to the market value price. Therefore, the bid-ask spread tightens the more liquid a market is. The opposite is true when the market is less liquid. In this case, the spread increases as it’s harder to sell and buy near the market value due to a lack of volume in trades.

https://www.cmcmarkets.com/en/trading-guides/bid-price-and-ask-price

• Broker

A broker is a person or firm who arranges transactions between a buyer and a seller for a commission when the deal is executed. A broker who also acts as a seller or as a buyer becomes a principal party to the deal. Neither role should be confused with that of an agent; one who acts on behalf of a principal party in a deal. - A broker is an independent party whose services are used extensively in some industries. A broker's prime responsibility is to bring sellers and buyers together and thus a broker is the third-person facilitator between a buyer and a seller

https://en.wikipedia.org/wiki/Broker

• Broker-dealer

In financial services, a broker-dealer is a natural person, company or other organization that engages in the business of trading securities for its own account or on behalf of its customers. Broker-dealers are at the heart of the securities and derivatives trading process.

Although many broker-dealers are "independent" firms solely involved in broker-dealer services, many others are business units or subsidiaries of commercial banks, investment banks or investment companies.

When executing trade orders on behalf of a customer, the institution is said to be acting as a broker. When executing trades for its own account, the institution is said to be acting as a dealer. Securities bought from clients or other firms in the capacity of dealer may be sold to clients or other firms acting again in the capacity of dealer, or they may become a part of the firm's holdings. In addition to execution of securities transactions, broker-dealers are also the main sellers and distributors of mutual fund shares.

https://en.wikipedia.org/wiki/Broker-dealer

• Prime Brokerage

Prime brokerage is the generic name for a bundled package of services offered by investment banks, wealth management firms, and securities dealers to hedge funds which need the ability to borrow securities and cash in order to be able to invest on a netted basis and achieve an absolute return. The prime broker provides a centralized securities clearing facility for the hedge fund so the hedge fund's collateral requirements are netted across all deals handled by the prime broker. These two features are advantageous to their clients.

The prime broker benefits by earning fees spreads on financing the client's margined long and short cash and security positions, and by charging, in some cases, fees for clearing and other services. It also earns money by rehypothecating the margined portfolios of the hedge funds currently serviced and charging interest on those borrowing securities and other investments.

https://en.wikipedia.org/wiki/Prime_brokerage

• Floor Broker

A floor broker is an independent member of an exchange who can act as a broker for other members who become overloaded with orders, as an agent on the floor of the exchange. The floor broker receives an order via Teletype machine from his firm's trading department and then proceeds to the appropriate trading post on the exchange floor. There he joins other brokers and the specialist in the security being bought or sold and executes the trade at the best competitive price available. On completion of the transaction the customer is notified through his registered representative back at the firm and the trade is printed on the consolidated ticker tape which is displayed electronically around the country. A floor broker should not be confused with a floor trader who trades as a principal for his or her own account, rather than as a broker. Commission brokers are employees of a member firm.

https://en.wikipedia.org/wiki/Floor_broker

• Stockbroker

A stockbroker, share holder registered representative (in the United States and Canada), trading representative (in Singapore), or more broadly, an investment broker, investment adviser, financial adviser, wealth manager, or investment professional is a regulated broker, broker-dealer, or registered investment adviser (in the United States) who may provide financial advisory and investment management services and execute transactions such as the purchase or sale of stocks and other investments to financial market participants in return for a commission, markup, or fee, which could be based on a flat rate, percentage of assets, or hourly rate. The term also refers to financial companies/services.

https://en.wikipedia.org/wiki/Stockbroker

• Bullish

Simply put, "bullish" means an investor believes a stock or the overall market will go higher. Conversely, "bearish" is the term used for investors who believe a stock will go down, or underperform. A bullish investor is often referred to as a bull, and a bearish investor as a bear. However, bullish can mean different things for short-term and long-term traders.

https://www.fool.com/investing/stock-market/basics/what-does-bullish-mean/

• What Is a Bull Market?

A bull market is the condition of a financial market in which prices are rising or are expected to rise. The term "bull market" is most often used to refer to the stock market but can be applied to anything that is traded, such as bonds, real estate, currencies, and commodities.

Because prices of securities rise and fall essentially continuously during trading, the term "bull market" is typically reserved for extended periods in which a large portion of security prices are rising. Bull markets tend to last for months or even years.

https://www.investopedia.com/terms/b/bullmarket.asp

• Understanding Bull Markets

Bull markets are characterized by optimism, investor confidence, and expectations that strong results should continue for an extended period of time. It is difficult to predict consistently when the trends in the market might change. Part of the difficulty is that psychological effects and speculation may sometimes play a large role in the markets. There is no specific and universal metric used to identify a bull market.

https://www.investopedia.com/terms/b/bullmarket.asp

• Characteristics of a Bull Market

Bull markets generally take place when the economy is strengthening or when it is already strong. They tend to happen in line with strong gross domestic product (GDP) and a drop in unemployment and will often coincide with a rise in corporate profits. Investor confidence will also tend to climb throughout a bull market period. The overall demand for stocks will be positive, along with the overall tone of the market. In addition, there will be a general increase in the amount of IPO activity during bull markets.

Notably, some of the factors above are more easily quantifiable than others. While corporate profits and unemployment are quantifiable, it can be more difficult to gauge the general tone of market commentary, for instance. Supply and demand for securities will seesaw: supply will be weak while demand will be strong. Investors will be eager to buy securities, while few will be willing to sell. In a bull market, investors are more willing to take part in the (stock) market in order to gain profits.

https://www.investopedia.com/terms/b/bullmarket.asp

• Bullish Long-Term trading

When an investor is bullish on a company for the long term, it means they have a favorable view of the company's future. They may also believe the stock is currently undervalued at its current share price.

The term could also be applied to a sector, industry, or the viability of a technology. For example, someone might say they're bullish on brick-and-mortar retail or autonomous vehicles. An investor who is bullish on an entire industry may invest in several companies that participate in the sector in the hope of finding the eventual market leader.

https://www.fool.com/investing/stock-market/basics/what-does-bullish-mean/

• Bullish Short-Term Trading

If a short-term trader is bullish, they believe a stock will go up in the coming days, weeks, or even minutes. This may be based on analyzing stock charts or intraday volume and price action. In these cases, the bullish viewpoint may have nothing to do with the underlying company. For instance, if a trader believes a stock is oversold, they may buy shares in the hope of a quick reversal.

Other short-term traders are bullish because they're betting some near-term event will happen in a favorable manner. For example, a trader may buy a stock the day before its quarterly earnings are released, hoping that the company will beat expectations.

https://www.fool.com/investing/stock-market/basics/what-does-bullish-mean/

• The Basics of a Candlestick

The candlestick's shadows show the day's high and low and how they compare to the open and close. A candlestick's shape varies based on the relationship between the day's high, low, opening and closing prices.

Candlesticks reflect the impact of investor sentiment on security prices and are used by technical analysts to determine when to enter and exit trades. Candlestick charting is based on a technique developed in Japan in the 1700s for tracking the price of rice. Candlesticks are a suitable technique for trading any liquid financial asset such as stocks, foreign exchange and futures.

https://www.investopedia.com/terms/c/candlestick.asp

• Candlestick Pattern

In financial technical analysis, a candlestick pattern is a movement in prices shown graphically on a candlestick chart that some believe can predict a particular market movement. The recognition of the pattern is subjective and programs that are used for charting have to rely on predefined rules to match the pattern. There are 42 recognized patterns that can be split into simple and complex patterns.

https://en.wikipedia.org/wiki/Candlestick_pattern

• Formation of Candlestick

Candlesticks are graphical representations of price movements for a given period of time. They are commonly formed by the opening, high, low, and closing prices of a financial instrument.

If the opening price is above the closing price then a filled (normally red or black) candlestick is drawn.

If the closing price is above the opening price, then normally a green or hollow candlestick (white with black outline) is shown.

The filled or hollow portion of the candle is known as the body or real body, and can be long, normal, or short depending on its proportion to the lines above or below it.

The lines above and below, known as shadows, tails, or wicks, represent the high and low price ranges within a specified time period. However, not all candlesticks have shadows.

https://en.wikipedia.org/wiki/Candlestick_pattern

• What Is A Candlestick?

A candlestick is a type of price chart used in technical analysis that displays the high, low, open, and closing prices of a security for a specific period. It originated from Japanese rice merchants and traders to track market prices and daily momentum hundreds of years before becoming popularized in the United States. The wide part of the candlestick is called the "real body" and tells investors whether the closing price was higher or lower than the opening price (black/red if the stock closed lower, white/green if the stock closed higher).

https://www.investopedia.com/terms/c/candlestick.asp

• What Is a Stock Dividend?

A stock dividend is a dividend payment to shareholders that is made in shares rather than as cash. The stock dividend has the advantage of rewarding shareholders without reducing the company's cash balance, although it can dilute earnings per share.

These stock distributions are generally made as fractions paid per existing share. For example, a company might issue a stock dividend of 5%, which will require it to issue 0.05 shares for every share owned by existing shareholders, so the owner of 100 shares would receive five additional shares.

www.investopedia.com/terms/s/stockdividend.asp

• How a Stock Dividend Works

Also known as a "scrip dividend," a stock dividend is a distribution of shares to existing shareholders in lieu of a cash dividend. This type of dividend may be made when a company wants to reward its investors but doesn't have the spare cash or wants to preserve its cash for other investments.

Stock dividends have a tax advantage for the investor. The share dividend, like any stock share, is not taxed until the investor sells it unless the company offers the option of taking the dividend as cash or in stock.

A stock dividend may require that the newly received shares are not to be sold for a certain period of time. This holding period on a stock dividend typically begins the day after it is purchased. Understanding the holding period is important for determining qualified dividend tax treatment.

https://www.investopedia.com/terms/s/stockdividend.asp

• Common Share Dividend Yield

Unlike preferred stock, there is no stipulated dividend for common stock ("ordinary shares" in the UK). Instead, dividends paid to holders of common stock are set by management, usually with regard to the company's earnings. There is no guarantee that future dividends will match past dividends or even be paid at all. The historic yield is calculated using the following formula: Current Dividend Yield == Most Recent Full Year Dividend / Current Share Price

https://en.wikipedia.org/wiki/Dividend_yield

• Dividend Tax

A dividend tax is a tax imposed by a jurisdiction on dividends paid by a corporation to its shareholders stockholders. The primary tax liability is that of the shareholder, though a tax obligation may also be imposed on the corporation in the form of a withholding tax. In some cases the withholding tax may be the extent of the tax liability in relation to the dividend. A dividend tax is in addition to any tax imposed directly on the corporation on its profits. Some jurisdictions do not tax dividends.

To avoid a dividend tax being levied, a corporation may distribute surplus funds to shareholders by way of a share buy-back. These, however, are normally treated as capital gains, but may offer tax benefits when the tax rate on capital gains is lower than the tax rate on dividends. Another potential strategy is to for a corporation not to distribute surplus funds to shareholders, who benefit from an increase in the value of their shareholding. These may also be subject to capital gain rules. Some private companies may transfer funds to controlling shareholders by way of loans, whether interest-bearing or not, instead of by way of a formal dividend, but many jurisdictions have rules that tax the practice as a dividend for tax purposes.

https://en.wikipedia.org/wiki/Dividend_tax

• Dividend Preferred Tax

In order to receive the preferred 15% tax rate on dividends, you must hold the stock for a minimum number of days. That minimum period is 61 days within the 121-day period surrounding the ex-dividend date. The 121-day period begins 60 days before the ex-dividend date.

https://www.fidelity.com

• Tax consequences

The ex-dividend date is also a factor in computing U.S. taxes that depend on holding periods. To receive favorable personal income tax rates on qualified dividends of a common stock, the stock must be held continuously for over 60 calendar days within the window of 121 calendar days centered on the ex-dividend date. Otherwise the dividend income is taxed at higher rates for ordinary income.

The ex-dividend date does not determine the tax year of the dividend income. The tax year of a dividend is determined by the payment date, which is typically a week or more after the ex-dividend date.

When ex-dividend and payment dates happen to cross end-of-year dates, personal accounting and tax consequences may be unusual. Dividend income that happens to be accrued on an ex-dividend date late in December of a given calendar year but paid in January will be reported in the latter tax year, with reporting and filing yet another year or more later. However, if a mutual fund or real estate investment trust (REIT) declares a dividend in October, November, or December that is payable to shareholders of record on a date in one of those months but actually pays the dividend during January of the next calendar year, the dividend is considered to have been received for tax purposes on December 31 of the year it was declared.

https://en.wikipedia.org/wiki/Ex-dividend_date

• Record Date

The record date is the cut-off date used to determine which shareholders of a stock are entitled to a dividend. The record date is set by the board of directors of a corporation. Based on the record date, the board of directors can also determine who should receive stock reports and other financial information relating to the investment.

https://www.investopedia.com/ask/answers/042915/what-difference-between-record-date-and-exdividend-date.asp

• Ex-Dividend Date

The ex-dividend date (or ex-date) of a stock is dictated by stock exchange rules and is usually set to be one business day before the record date. In order for an investor to receive a dividend payment on the listed payment date, they would need to have their stock purchase completed by the ex-dividend date. If the stock sale has not been completed by the ex-dividend date, then the seller on record is the one who receives the dividend for that stock.

https://www.investopedia.com/ask/answers/042915/what-difference-between-record-date-and-exdividend-date.asp

• Record Date vs Ex-Dividend

The record date, or day of record, and the ex-dividend date of a stock are both important dates relating to stock purchasing and reporting. These dates help determine which investors will receive dividends and when they will receive them.

Companies use dividends to distribute profits to shareholders and may pay out dividends in several different ways, including cash dividends, stock dividends, or property dividends. Cash dividends are the most common type of disbursements and are typically sent to stockholders via check or direct deposit. Stock dividends are paid out in the form of company shares.

The record date is set by the board of directors of a corporation and refers to the date by which investors must be on the company's books in order to receive a stock's dividend.

An ex-dividend date is dictated by stock exchange rules and is usually set to be one business day before the record date.

If the stock sale has not been completed by the ex-dividend date, then the seller on record is the one who receives the dividend for that stock.

https://www.investopedia.com/ask/answers/042915/what-difference-between-record-date-and-exdividend-date.asp

• What Is a Long ?

The term long describes what an investor has purchased when they buy a security or derivative with the expectation that it will rise in value.

Having a “long” position in a security means that you own the security. Investors maintain “long” security positions in the expectation that the stock will rise in value in the future.

https://www.investopedia.com/terms/l/long.asp

• Understanding Long Position

Investors can establish long positions in securities such as stocks, mutual funds or currencies, or even in derivatives such as options and futures. Holding a long position is a bullish view. A long position is the opposite of a short position (also known simply as "short").

The term long position is often used In the context of buying an options contract. The trader can hold either a long call or a long put option, depending on the outlook for the underlying asset of the option contract.

For example, an investor who hopes to benefit from an upward price movement in an asset will "go long" on a call option. The call gives the holder the option to buy the underlying asset at a certain price. Conversely, an investor who expects an asset’s price to fall will be long on a put option—and maintain the right to sell the asset at a certain price.

In reality, long is an investing term that can have multiple meanings depending on in what context it is used. The most common meaning of long refers to the length of time an investment is held. However, the term long has a different meaning when used in options and futures contracts.

https://www.investopedia.com/terms/l/long.asp

• Types of Long Positions

In reality, long is an investing term that can have multiple meanings depending on in what context it is used. The most common meaning of long refers to the length of time an investment is held. However, the term long has a different meaning when used in options and futures contracts.

https://www.investopedia.com/terms/l/long.asp

• Long Position Options Contracts

In the world of options contracts, the term long has nothing to do with the measurement of time. Instead, it speaks to the owning of an underlying asset. The long position holder is one who currently holds the underlying asset in their portfolio.

When a trader buys or holds a call options contract from an options writer, they are long, due to the power they hold in being able to buy the asset. An investor who is long a call option is one who buys a call with the expectation that the underlying security will increase in value. The long position call holder believes the asset's value is rising and may decide to exercise their option to buy it by the expiration date.

But not every trader who holds a long position believes the asset's value will increase. The trader who owns the underlying asset in their portfolio and believes the value will fall can buy a put option contract. They still have a long position because they have the ability to sell the underlying asset they hold in their portfolio. The holder of a long put option believes the price of an asset will fall. They hold the option with the hope that they will be able to sell the underlying asset at an advantageous price by the expiry.

So, as you can see, the long position on an options contract can express either a bullish or bearish sentiment depending on whether the long contract is a put or a call.

In contrast, the short position on an options contract does not own the stock or other underlying asset but borrows it with the expectation of selling it and then repurchasing it at a lower price

https://www.investopedia.com/terms/l/long.asp

• Long Futures Contracts

Investors and businesses can also enter into a long forward or futures contract to hedge against adverse price movements. A company can employ a long hedge to lock in a purchase price for a commodity that is needed in the future. Futures differ from options in that the holder is obligated to buy or sell the underlying asset. They do not get to choose but must complete these actions.

Suppose a jewelry manufacturer believes the price of gold is poised to turn upwards in the short term. The firm can enter into a long futures contract with its gold supplier to purchase gold in three months from the supplier at $1,300. In three months, whether the price is above or below $1,300, the business that has a long position on gold futures is obligated to purchase the gold from the supplier at the agreed contract price of $1,300. The supplier, in turn, is obligated to deliver the physical commodity when the contract expires.

Speculators also go long on futures when they believe the prices will go up. They don’t necessarily want the physical commodity, as they are only interested in capitalizing on the price movement. Before expiry, a speculator holding a long futures contract can sell the contract in the market.

https://www.investopedia.com/terms/l/long.asp

• Price

The term stock price refers to the current price that a share of stock is trading for on the market.

Every publicly traded company, when its shares are issued, are given a price – an assignment of their value that ideally reflects the value of the company itself. The price of a stock will go up and down in relation to a number of different factors, including changes within the economy as a whole, changes within industries, political events, war, and environmental changes.

A share price is the price of a single share of a number of saleable equity shares of a company. In layman's terms, the stock price is the highest amount someone is willing to pay for the stock, or the lowest amount that it can be bought for.

What Price Tells You

Most people believe a stock's value is indicated by its price. That's only true to a certain extent. There is a big difference between the two. The stock's price only tells you a company's current value or its market value.

So, the price represents how much the stock trades at—or the price agreed upon by a buyer and a seller. If there are more buyers than sellers, the stock's price will climb. If there are more sellers than buyers, the price will drop.

On the other hand, the intrinsic value is a company's actual worth in dollars. This includes both tangible and intangible factors, including the insights of fundamental analysis.

An investor can investigate a company to determine its value. All of the information needed is online in the company's public financial statements. Online brokerages offer analyses and summaries of those results from many sources. Take a look at the facts.

https://www.investopedia.com/articles/stocks/08/stock-prices-fool.asp

• Don't Jump on Price

Investors often make the mistake of looking only at the stock price, because it is the most visible number in the financial press. In fact, it has meaning only in context.

For example, if Company A has a $100 billion market capitalization and has 10 billion shares, while Company B has a $1 billion market capitalization and 100 million shares, both companies will have a share price of $10. But Company A is worth 100 times more than Company B.

A stock with a $100 share price may seem very expensive to some retail investors. They might think that a $5 stock has a better chance of doubling than a $100 stock.

But the $5 stock might be considerably overvalued, and the $100 stock could be undervalued. The opposite also could be true as well, but the share price alone is no sign of value.

Market capitalization is a clearer indication of how the company is valued and gives a better idea of the stock’s value. Also known as market cap, it's listed with every stock's price quote.

https://www.investopedia.com/articles/stocks/08/stock-prices-fool.asp

• Factors Affecting Price and Value

The price and value of a stock may also be affected by fundamental factors. Each of the below is important.

Investors use this financial data along with the company's stock price to see whether a company is financially healthy. The stock price will move based on whether investors are happy or worried about its financial future.

Company, Industry and Economy News

Any good news about a company will affect its stock price. It may be a positive earnings report, an announcement of a new product, or a plan to expand into a new area.

Similarly, related economic data, such as a monthly jobs report with a positive spin may also help increase company share prices. If the news is negative, though, it tends to have a downward effect on the share price.

https://www.investopedia.com/articles/stocks/08/stock-prices-fool.asp

• How are share prices determined?

Initially, share prices are determined through a company’s initial public offering (IPO), in which the price of one share is set according to the perceived supply of, and demand for, that company’s stock. The prices are usually set by a bookrunner – a lead manager who is appointed specifically to help the company determine an appropriate price for its IPO.

After the IPO, a company’s share price can be impacted by a range of factors. For example, any increase in the number of shares on the market would bring the price down, assuming demand remains the same. Equally, any reduction in demand – perhaps on the back of changes in a company’s senior leadership – would reduce the share price, so long as supply remains constant.

More specifically, other factors can also affect a company’s share price include expected or unexpected industry news, macroeconomic data releases and political announcements.

https://www.ig.com/en/glossary-trading-terms/share-price-definition

• How To Analyze Share Prices

Share prices can be effectively analyzed through both technical and fundamental analysis. Technical analysis seeks to assess the future price movements of shares by looking at historical chart data. By studying previous share price trends, technical analysts can often identify whether a stock is about to enter a bullish or bearish trend.

Fundamental analysis is more concerned with identifying whether a stock is over or undervalued. It does this by analyzing the individual company’s perceived ability to generate a profit, focusing on macroeconomic data, financial statements and decisions from senior management.

https://www.ig.com/en/glossary-trading-terms/share-price-definition

• Short Selling

Short selling occurs when an investor borrows a security and sells it on the open market, planning to buy it back later for less money. Short-sellers bet on, and profit from, a drop in a security's price. This can be contrasted with long investors who want the price to go up.

https://www.investopedia.com/terms/s/shortselling.asp

• What Is Short Selling?

To open a short position, a trader must have a margin account and will usually have to pay interest on the value of the borrowed shares while the position is open. Also, the Financial Industry Regulatory Authority, Inc. (FINRA), which enforces the rules and regulations governing registered brokers and broker-dealer firms in the United States, the New York Stock Exchange (NYSE), and the Federal Reserve have set minimum values for the amount that the margin account must maintain—known as the maintenance margin.1 If an investor's account value falls below the maintenance margin, more funds are required, or the position might be sold by the broker.

To close a short position, a trader buys the shares back on the market—hopefully at a price less than what they borrowed the asset—and returns them to the lender or broker. Traders must account for any interest charged by the broker or commissions charged on trades.

The process of locating shares that can be borrowed and returning them at the end of the trade is handled behind the scenes by the broker. Opening and closing the trade can be made through the regular trading platforms with most brokers. However, each broker will have qualifications the trading account must meet before they allow margin trading.

The activity of hedging an investment is considered to be lower risk than trading for speculation because it is generally conducted over a longer-term time horizon. Because of the additional risks in short selling, it is usually conducted over a smaller time horizon and is thus more likely to be an activity conducted for speculation.

https://www.investopedia.com/terms/s/shortselling.asp

• Days to Cover

"Days to cover" measures the expected number of days to close out a company's outstanding shares that have been sold short. It computes a company's shares that are currently shorted divided by the average daily trading volume to give an approximation of the time required, expressed in days, to close out those short positions.

Days to cover are related to the short ratio as a measure of short interest in a stock.

Days to cover are calculated by taking the number of currently shorted shares and dividing that amount by the average daily trading volume for the company in question. For example, if investors have shorted 2 million shares of ABC and its average daily volume is 1 million shares, then the days to cover is two days.

https://www.investopedia.com/terms/d/daystocover.asp

• The Short Selling Process and Days to Cover

Traders who short sell are motivated by a belief that the price of a security will fall, and shorting the stock allows them to profit from that decline in price. In practice, short selling involves borrowing shares from a broker, selling the shares on the open market, and then buying the shares back in order to return them to the broker.

The trader benefits if the price of the shares fall after the shares are borrowed and sold, as this allows the investor to repurchase the shares at a price lower than the amount for which the shares are sold. The days to cover represent the total estimated amount of time for all short sellers active in the market with a particular security to buy back the shares that were lent to them by a brokerage.

If a previously lagging stock turns very bullish, the buying action of short sellers can result in extra upward momentum. The higher the days to cover, the more pronounced the effect of upward momentum may be, which could result in larger losses for short sellers who are not among the first to close their positions.

https://www.investopedia.com/terms/d/daystocover.asp

• Short Selling for a Profit

Imagine a trader who believes that XYZ stock—currently trading at $50—will decline in price in the next three months. They borrow 100 shares and sell them to another investor. The trader is now “short” 100 shares since they sold something that they did not own but had borrowed. The short sale was only made possible by borrowing the shares, which may not always be available if the stock is already heavily shorted by other traders.

A week later, the company whose shares were shorted reports dismal financial results for the quarter, and the stock falls to $40. The trader decides to close the short position and buys 100 shares for $40 on the open market to replace the borrowed shares. The trader’s profit on the short sale, excluding commissions and interest on the margin account, is $1,000: ($50 - $40 = $10 x 100 shares = $1,000).

https://www.investopedia.com/terms/s/shortselling.asp

• Short Selling for a Loss

Using the scenario above, let's now suppose the trader did not close out the short position at $40 but decided to leave it open to capitalize on a further price decline. However, a competitor swoops in to acquire the company with a takeover offer of $65 per share, and the stock soars. If the trader decides to close the short position at $65, the loss on the short sale would be $1,500: ($50 - $65 = negative $15 x 100 shares = $1,500 loss). Here, the trader had to buy back the shares at a significantly higher price to cover their position.

https://www.investopedia.com/terms/s/shortselling.asp

• Short Selling as a Hedge

Apart from speculation, short selling has another useful purpose—hedging—often perceived as the lower-risk and more respectable avatar of shorting. The primary objective of hedging is protection, as opposed to the pure profit motivation of speculation. Hedging is undertaken to protect gains or mitigate losses in a portfolio, but since it comes at a significant cost, the vast majority of retail investors do not consider it during normal times.

The costs of hedging are twofold. There’s the actual cost of putting on the hedge, such as the expenses associated with short sales, or the premiums paid for protective options contracts. Also, there’s the opportunity cost of capping the portfolio’s upside if markets continue to move higher. As a simple example, if 50% of a portfolio that has a close correlation with the S&P 500 index (S&P 500) is hedged, and the index moves up 15% over the next 12 months, the portfolio would only record approximately half of that gain or 7.5%.

https://www.investopedia.com/terms/s/shortselling.asp

Pros and Cons of Short Selling

Selling short can be costly if the seller guesses wrong about the price movement. A trader who has bought stock can only lose 100% of their outlay if the stock moves to zero.

However, a trader who has shorted stock can lose much more than 100% of their original investment. The risk comes because there is no ceiling for a stock’s price, it can rise "to infinity and beyond"—to coin a phrase from another comic character, Buzz Lightyear. Also, while the stocks were held, the trader had to fund the margin account. Even if all goes well, traders have to figure in the cost of the margin interest when calculating their profits.

PROS:

Possibility of high profits

Little initial capital required

Leveraged investments possible

Hedge against other holdings

CONS:

Potentially unlimited losses

Margin account necessary

Margin interest incurred

Short squeezes

When it comes time to close a position, a short-seller might have trouble finding enough shares to buy—if a lot of other traders are also shorting the stock or if the stock is thinly traded. Conversely, sellers can get caught in a short squeeze loop if the market, or a particular stock, starts to skyrocket.

On the other hand, strategies that offer high risk also offer a high-yield reward. Short selling is no exception. If the seller predicts the price moves correctly, they can make a tidy return on investment (ROI), primarily if they use margin to initiate the trade. Using margin provides leverage, which means the trader did not need to put up much of their capital as an initial investment. If done carefully, short selling can be an inexpensive way to hedge, providing a counterbalance to other portfolio holdings.

Beginning investors should generally avoid short selling until they get more trading experience under their belts. That being said, short selling through ETFs is a somewhat safer strategy due to the lower risk of a short squeeze.

https://www.investopedia.com/terms/s/shortselling.asp

• Short Selling Metrics

Two metrics used to track short-selling activity on a stock are:

Short interest ratio (SIR)—also known as the short float—measures the ratio of shares that are currently shorted compared to the number of shares available or “floating” in the market. A very high SIR is associated with stocks that are falling or stocks that appear to be overvalued.

The short interest to volume ratio—also known as the days to cover ratio—the total shares held short divided by the average daily trading volume of the stock. A high value for the days to cover ratio is also a bearish indication for a stock.

Both short-selling metrics help investors understand whether the overall sentiment is bullish or bearish for a stock.

https://www.investopedia.com/terms/s/shortselling.asp

• Stocks

A stock also known as equity is a security that represents the ownership of a fraction of a corporation. This entitles the owner of the stock to a proportion of the corporation's assets and profits equal to how much stock they own. Units of stock are called shares.

Stocks are bought and sold predominantly on stock exchanges, though there can be private sales as well, and are the foundation of many individual investors portfolios. These transactions have to conform to government regulations which are meant to protect investors from fraudulent practices. Historically, they have outperformed most other investments over the long run. These investments can be purchased from most online stock brokers.

A stock is a type of security that entitles the holder a fraction of ownership in a company. Through the ownership of this stock, the holder may be granted a portion of a company’s earnings, distributed as dividends. Broadly speaking, there are two main types of stocks, common and preferred. Common stockholders have the right to receive dividends and vote in shareholder meetings, while preferred shareholders have limited or no voting rights. Preferred stockholders typically receive higher dividend payouts, and in the event of a liquidation, a greater claim on assets than common stockholders.

https://www.investopedia.com/terms/s/stock.asp

• Understanding Stocks

Corporations issue stock to raise funds to operate their businesses. The holder of stock has now bought a piece of the corporation and, depending on the type of shares held, may have a claim to a part of its assets and earnings. In other words, a shareholder is now an owner of the issuing company. Ownership is determined by the number of shares a person owns relative to the number of outstanding shares. For example, if a company has 1,000 shares of stock outstanding and one person owns 100 shares, that person would own and have claim to 10% of the company's assets and earnings.

Stock holders do not own corporations; they own shares issued by corporations. But corporations are a special type of organization because the law treats them as legal persons. In other words, corporations file taxes, can borrow, can own property, can be sued, etc. The idea that a corporation is a “person”, means that the corporation owns its own assets. A corporate office full of chairs and tables belongs to the corporation, and not to the shareholders

 This distinction is important because corporate property is legally separated from the property of shareholders, which limits the liability of both the corporation and the shareholder. If the corporation goes bankrupt, a judge may order all of its assets sold – but your personal assets are not at risk. The court cannot even force you to sell your shares, although the value of your shares will have fallen drastically. Likewise, if a major shareholder goes bankrupt, she cannot sell the company’s assets to pay off her creditors.

https://www.investopedia.com/terms/s/stock.asp

• New Shares

Companies can issue new shares whenever there is a need to raise additional cash. This process dilutes the ownership and rights of existing shareholders provided they do not buy any of the new offerings. Corporations can also engage in stock buy-backs which would benefit existing shareholders as it would cause their shares to appreciate in value.

https://www.investopedia.com/terms/s/stock.asp

• Common vs Preferred Stock

There are two main types of stock: common and preferred. Common stock usually entitles the owner to vote at shareholders' meetings and to receive any dividends paid out by the corporation. Preferred stockholders generally do not have voting rights, though they have a higher claim on assets and earnings than the common stockholders. For example, owners of preferred stock receive dividends before common shareholders and have priority in the event that a company goes bankrupt and is liquidated.

https://www.investopedia.com/terms/s/stock.asp

• Stocks vs Bonds

Stocks are issued by companies to raise capital, paid-up or share, in order to grow the business or undertake new projects. There are important distinctions between whether somebody buys shares directly from the company when it issues them in the primary market or from another shareholder on the secondary market. When the corporation issues shares, it does so in return for money.

Bonds are fundamentally different from stocks in a number of ways. First, bondholders are creditors to the corporation, and are entitled to interest as well as repayment of principal. Creditors are given legal priority over other stakeholders in the event of a bankruptcy and will be made whole first if a company is forced to sell assets in order to repay them. Shareholders, on the other hand, are last in line and often receive nothing, or mere pennies on the dollar, in the event of bankruptcy. This implies that stocks are inherently riskier investments.

https://www.investopedia.com/terms/s/stock.asp

• Stockholders and Equity Ownership

What shareholders actually own are shares issued by the corporation; and the corporation owns the assets held by a firm. So if you own 33% of the shares of a company, it is incorrect to assert that you own one-third of that company; it is instead correct to state that you own 100% of one-third of the company’s shares. Shareholders cannot do as they please with a corporation or its assets. A shareholder can’t walk out with a chair because the corporation owns that chair, not the shareholder. This is known as the “separation of ownership and control.”

Owning stock gives you the right to vote in shareholder meetings, receive dividends (which are the company’s profits) if and when they are distributed, and it gives you the right to sell your shares to somebody else.

If you own a majority of shares, your voting power increases so that you can indirectly control the direction of a company by appointing its board of directors.5 This becomes most apparent when one company buys another: the acquiring company doesn’t go around buying up the building, the chairs, the employees; it buys up all the shares. The board of directors is responsible for increasing the value of the corporation, and often does so by hiring professional managers, or officers, such as the Chief Executive Officer, or CEO.

For most ordinary shareholders, not being able to manage the company isn't such a big deal. The importance of being a shareholder is that you are entitled to a portion of the company's profits, which, as we will see, is the foundation of a stock’s value. The more shares you own, the larger the portion of the profits you get. Many stocks, however, do not pay out dividends, and instead reinvest profits back into growing the company. These retained earnings, however, are still reflected in the value of a stock.

https://www.investopedia.com/terms/s/stock.asp

• Volume

Volume measures the number of shares traded in a stock or contracts traded in futures or options. Volume can be an indicator of market strength, as rising markets on increasing volume are typically viewed as strong and healthy. When prices fall on increasing volume, the trend is gathering strength to the downside.

https://www.investopedia.com/articles/technical/02/010702.asp

• Understanding Volume

Every transaction that takes place between a buyer and a seller of a security contributes to the total volume count of that security. One transaction occurs whenever a buyer agrees to purchase what a seller is offering for sale at a certain price. If only five transactions occur in a day, the volume for that day is set at five.

Each market exchange tracks its trading volume and provides volume data either for free or for a subscription fee. The volume of trade numbers are reported as often as once an hour throughout the current trading day. These hourly reported trade volumes are estimates. A trade volume reported at the end of the day is also an estimate. Final actual figures are reported the following day. Investors may also follow a security’s tick volume, or the number of changes in a contract's price, as a surrogate for trade volume, since prices tend to change more frequently with a higher volume of trade.

Volume tells investors about the market's activity and liquidity. Higher trade volumes for a specified security mean higher liquidity, better order execution and a more active market for connecting a buyer and seller. When investors feel hesitant about the direction of the stock market, futures trading volume tends to increase, which often causes options and futures on specified securities to trade more actively. Volume overall tends to be higher near the market's opening and closing times, and on Mondays and Fridays. It tends to be lower at lunchtime and before a holiday.

https://www.investopedia.com/terms/v/volume.asp

• What is Volume in Stocks?

Volume is counted as the total number of shares that are actually traded (bought and sold) during the trading day or specified set period of time. It is a measure of the total turnover of shares. Each ticket represents a trade and counted towards the total trading volume. While the same shares may be traded back and forth multiple times, the volume is counted on each transaction. Therefore if 500 shares of XYZ were bought, then sold, then re-bought and then re-sold again resulting in four tickets, then the volume would register as 2,000 shares, even though the same 500 shares may have been in play multiple times.

https://www.investorsunderground.com/stock-volume/

• Volume in Technical Analysis

Some investors use technical analysis, a strategy based on stock price, in order to make decisions about when to buy a stock. Technical analysts are primarily looking for entry and exit price points; volume levels are important because they provide clues about where the best entry and exit points are located.

Volume is an important indicator in technical analysis because it is used to measure the relative significance of any market move. If the market makes moves a large amount during a given period, then the strength of that movement either gains credibility or is viewed with skepticism based on the volume for that period. The higher the volume during the price move, the more significant the move is considered in this form of analysis. Conversely, if the volume is low then the move is viewed with less significance.

Volume is one of the most important measures of the strength of a security for traders and technical analysts. From an auction perspective, when buyers and sellers become particularly active at a certain price, it means there is a high volume.

Analysts use bar charts to quickly determine the level of volume. Bar charts also make it easier to identify trends in volume. When the bars on a bar chart are higher than average, it's a sign of high volume or strength at a particular market price. By examining bar charts, analysts can use volume as a way to confirm a price movement. If volume increases when the price moves up or down, it is considered a price movement with strength.

If traders want to confirm a reversal on a level of support–or floor–they look for high buying volume. Conversely, if traders are looking to confirm a break in the level of support, they look for low volume from buyers. If traders want to confirm a reversal on a level of resistance–or ceiling– they look for high selling volume. Conversely, if traders are looking to confirm a break in the level of resistance, they look for high volume from buyers.

https://www.investopedia.com/terms/v/volume.asp

• Using Volume

When analyzing volume, there are usually guidelines used to determine the strength or weakness of a move. As traders, we are more inclined to join strong moves and take no part in moves that show weakness—or we may even watch for an entry in the opposite direction of a weak move.

Volume Trading

Volume is often viewed as an indicator of liquidity, as stocks or markets with the most volume are the most liquid and considered the best for short-term trading; there are many buyers and sellers ready to trade at various prices.

https://www.investopedia.com/terms/v/volume.asp