A
Ask Price: The lowest price a seller is willing to accept for a stock.
All Shares Index: An index that includes all the stocks listed on the Philippine Stock Exchange, providing a broader view of the market’s performance.
Arbitrage: The simultaneous purchase and sale of securities in different markets to profit from short-term price differences.
B
Bear Market: A market condition where stock prices have been falling for at least 20% and are expected to keep falling.
Bid Price: The highest price a buyer is willing to pay for a stock.
Blue Chip Stocks: Shares of large, well-established, and financially sound companies, known for their reliability and stable returns.
Bull Market: A market condition where stock prices have been rising for at least 20% and are expected to keep rising.
C
Capital Gain: The profit from the sale of a security or investment.
Common Stock: Shares that represent ownership in a company and entitle the shareholder to a part of the company’s profits.
Corporate Bond: A debt security issued by a corporation to raise capital, with a promise to pay back the principal along with interest.
D
Dividend: A portion of a company’s earnings distributed to shareholders, typically in the form of cash or additional shares.
Day Trading: The practice of buying and selling financial instruments within the same trading day.
Debt Security: A financial instrument representing a loan made by an investor to a borrower.
E
Earnings Per Share (EPS): A company’s profit divided by the outstanding shares of its common stock, indicating the company’s profitability.
Equity: The value of shares issued by a company. Equity = Total Assets – Total Liabilities
Exchange: A marketplace where securities, commodities, derivatives, or other financial instruments are traded.
F
Float: The number of shares available for trading in the market.
Futures: Financial contracts obligating the buyer to purchase an asset or the seller to sell an asset at a predetermined future date and price.
Fund Manager: A professional responsible for managing a portfolio of investments.
G
Growth Stock: Shares in a company expected to grow at an above-average rate compared to other companies.
Gross Domestic Product (GDP): The total value of goods produced and services provided in a country during one year.
Government Bond: A debt security issued by a government to support government spending.
H
Hedge: An investment made to reduce the risk of adverse price movements in an asset.
High-Frequency Trading: A type of trading that uses powerful computer programs to transact a large number of orders at extremely high speeds.
Holding Period: The time during which an investor holds a particular investment.
I
Initial Public Offering (IPO): The first time a company offers its shares to the public on an Exchange.
Index: A statistical measure of the changes in a portfolio of stocks representing a portion of the overall market.
J
Joint Account: An account shared by two or more individuals.
Junk Bond: A high-yield, high-risk security, typically issued by a company seeking to raise capital quickly.
K
Key Performance Indicator (KPI): A measurable value that demonstrates how effectively a company is achieving key business objectives.
L
Liquidity: The ease with which an asset can be converted into cash without affecting its market price.
Limit Order: An order to buy or sell a stock at a specific price or better.
Leverage: The use of borrowed money to increase the potential return of an investment.
M
Market Capitalization (Market Cap): The total market value of a company’s outstanding shares, calculated by multiplying the current share price by the total number of shares.
Margin: Borrowing money from a broker to purchase stock, using the investment as collateral.
Mutual Fund: An investment vehicle that pools money from many investors to purchase securities.
N
Net Asset Value (NAV): The value per share of a mutual fund or an exchange-traded fund (ETF) on a specific date or time.
Nominal Value: The face value of a bond or stock, as stated by the issuer.
Non-Voting Shares: Shares that do not give the holder voting rights in the company’s decisions.
O
Option: A financial derivative that represents a contract sold by one party to another, offering the buyer the right, but not the obligation, to buy or sell a security at an agreed-upon price during a certain period.
Over-the-Counter (OTC): Trading of securities outside of formal exchanges, typically through a dealer network.
Open Market: A market in which securities are bought and sold to the highest bidder.
P
PSEi (Philippine Stock Exchange Index): The main stock market index of the Philippines, consisting of 30 of the largest and most active companies listed on the Philippine Stock Exchange.
Portfolio: A collection of investments owned by an individual or institution, diversified to manage risk.
Price-to-Earnings Ratio (P/E Ratio): A valuation ratio of a company’s current share price compared to its per-share earnings.
Q
Quotation: The price at which a security is traded on the market.
Quick Ratio: A measure of a company’s ability to meet its short-term obligations with its most liquid assets.
Quarterly Earnings: The profit a company makes in a three-month period.
R
Return on Investment (ROI): A measure used to evaluate the efficiency of an investment or compare the efficiency of several investments.
Risk: The potential for losing money on an investment.
Rights Issue: An offer to existing shareholders to purchase additional shares at a discount to the current market price.
S
Stock Split: An increase in the number of shares of a company’s stock without changing the shareholders’ equity.
Short Selling: Selling a stock that the seller does not own, with the hope of buying it back at a lower price.
Sector: A group of stocks that operate in the same industry, such as banking, telecommunications, or energy.
T
Treasury Bond: A long-term, interest-bearing security issued by the government.
Technical Analysis: The study of past market data, primarily price and volume, to forecast future price movements.
U:
Underwriter: A financial specialist who assesses and assumes another party’s risk for a fee, such as a commission, premium, or spread.
Unlisted Stock: Shares that are not listed on a formal exchange but are traded over-the-counter.
Uptick: A transaction at a price higher than the previous transaction.
V
Volatility: The degree of variation in a stock’s trading price over time, reflecting the level of risk associated with the stock.
Volume: The number of shares traded during a given period, indicating the level of activity in a particular stock.
Value Stock: A stock that tends to trade at a lower price relative to its fundamentals, such as dividends, earnings, or sales.
W
Warrant: A derivative that gives the holder the right to buy or sell a security at a certain price before expiration.
Withdrawal: The act of taking money out of an investment account.
X
Ex-Dividend: A stock that is trading without the value of the next dividend payment.
Ex-Dividend Date: This is the date that determines who gets the next dividend. To receive the dividend, you must own the stock by the end of the day before the ex-dividend date. On the ex-dividend date, new buyers won’t get the dividend.
Exchange Rate: The value of one currency for the purpose of conversion to another.
Execution: The completion of a buy or sell order for a security.
Y
Yield: The income return on an investment, such as the interest or dividends received, expressed as a percentage of the investment’s cost.
Yield Curve: A graph that shows the relationship between interest rates and bonds of different maturities.
Z
Z-Score: A statistical measure that describes a value’s relationship to the mean of a group of values.