Stock Market Terms

An acquisition is a transaction where one company buys another company, a business unit, or a controlling ownership stake.

A blue chip stock is a share in a large, well-established company with a strong market position, a reliable earnings record, and a large market capitalisation.

Dilution is the fall in existing shareholders' ownership percentage that happens when a company issues new shares.

A dividend is a share of a company's earnings or reserves paid to shareholders.

Dividend yield is a company's annual dividend per share expressed as a percentage of its share price.

Earnings per share, or EPS, is a company's net profit divided by its number of shares outstanding.

Earnings season is the stretch of weeks each quarter when most listed companies report their latest financial results.

FAANG is a stock-market acronym for five large US technology companies: Meta Platforms, Apple, Amazon, Netflix, and Alphabet.

Float is the number of a company's shares that are available for public trading.

A growth stock is a share in a company expected to grow its revenue and earnings faster than the market average.

An IPO, or initial public offering, is the first sale of a company's shares to the public on a stock exchange.

Market capitalisation is the total market value of a company's shares.

A merger is a transaction where two companies combine into a single company or operate under one corporate structure.

P/E ratio (price-to-earnings ratio) is a stock valuation metric that compares a company's share price with its earnings per share.

A penny stock is a share in a small company that trades at a very low price, often below USD 1 and, under some definitions, below USD 5.

A rights issue is a corporate action that lets existing shareholders buy new shares in proportion to their current holding, usually at a discount to the market price.

A share is a unit of ownership in a company.

A share price is the amount it costs to buy one share of a company at a given moment.

A stock CFD is a contract for difference that tracks the price of a single company's share.

A stock split is a corporate action that increases a company's share count by dividing each existing share into several, while lowering the share price in the same proportion.

A ticker symbol is the short code that identifies a listed security on a stock exchange.

A value stock is a share that trades at a low price relative to the company's fundamentals, such as its earnings, assets, or book value.

A warrant is a security that gives the holder the right, but not the obligation, to buy or sell an underlying share at a set price before a set expiry date.