Stock Market Terminology (C – E)
Stock Market Terminology
Below is a trader’s dictionary of common stock market terminology to assist individual investors who may be new to trading. Before viewing the terms below, take a look at stock market terminology listed on our Stock Market Glossary. Here you will find additional terms that we put into words that make it easier for new and also non-investors to understand. Many of these stock market terms are also used in greater detail in our Japanese Candlesticks Category, our Technical Analysis Category, and in illustrations in our Daily Market View.
Stock Market Terminology C- E
Candlestick Signals
Japanese candlesticks also provide more of a real time depiction of market sentiment whereas bar charts often only signify market noise. Candlesticks utilize one to three time periods and are able to visually block out market noise unlike bar charts. Bar charts will actually allow spikes to highs and lows to be prominent in their data unlike candlesticks which are able to focus on what the market actually did to force price action during a period of trading.
Confirmation
When a move or anticipated action is verified by another indicator.
Congestion area
When price movement stays within a trading range for an extended time period.
Call Option
An option giving the holder the right, (but not the obligation) to buy a set amount of an underlying stock at a specified price within a fixed timeframe. Investors purchase calls when they anticipate a price increase.
Commodities
Products that are traded on the commodities exchange. Such as agricultural products, timber, oil and metals. Commodities are the basis for futures contracts.
Contract Size
The amount of underlying stock covered by an option contract. In the U.S this is 100 shares.
Closing Order
An order placed to close an open position, whether it be a sell to close or a buy to close order.
Day Order
An order that expires at the end of the trading day if it is not filled.
Day trading
The practice of making multiple trades which you plan to open and close within the same trading day. **This is personally one of our favorite trading styles at Hit and Run Candlesticks. Check out the Profit Scanner we use to grab quick profits.
Dividend
Distribution to shareholders of cash or stock declared by the company’s board of directors.
Derivatives
A financial instrument where the value is ‘derived’ based upon the value and characteristics of another financial instrument. (Stock Options are derivatives of the corresponding stock.)
Divergence
Difference between indicators after a price move. One indicator confirms the move, while another indicator shows the opposite.
Double bottoms
Prices forms a W-shaped bottom where prices reverse at just about the same lows.
Double tops
Price forms an M-shape where the highs are approximately the same.
Exchange Traded Funds or ETF‘s
Exchange traded funds, or ETFs, are securities that track on an index, a commodity, or a basket of assets like an index fund, but that trades like stock on the major stock exchanges.
Exponential moving average (EMA)
Used in Technical Analysis and is similar to a simple moving average, except greater weight is given to the most recent price data and therefore moves more quickly.
Earnings
Income of a business (revenue minus expenses).
Earnings per share or EPS:
Income (earnings) for a particular period (typically quarterly or end-of-year) divided by the average number of shares outstanding during that period.
Expiry Date
Date that an option contract expires.
Exercise
The procedure of satisfying the put option contract and buying or selling the shares.
Stock Market Glossary (A-B) Stock Market Terminology (C-E)
Stock Market Trading Terms (F-L) Stock Market Definitions (M-R)
Glossary of Stock Market Trading Terms (S-Z)
