Key Trading Terms
No matter what you’re trading you need to be familiar with the most common Trading terms. Here I’ll briefly summarise the meanings of a few of them. In time I’ll write a more detailed article on each of these:
- Buy: Buying an asset with the intent of profiting off an increase in price (Going long).
- Sell: Selling an asset to make a profit or prevent further losses.
- Going Long: Buying an asset with the intent of profiting from selling at a higher price.
- Short sell: Borrowing stock you don’t own for the purposes of profiting off a stock that dips in price. The opposite of going long.
- Bid: The greatest price someone else is willing to pay for a stock
- Ask: The asking price for a share of stock
- Spread: The difference between the bid and ask prices
- Market Order: An order to buy (or short sell) an asset at the current market price
- Limit Order: This is an order to buy or sell an asset at a price of your choosing
- Stop-Loss: An order to exit a trade at a predetermined price with the intent of limiting loss.