The Guide to Stockmarket Jargon and Terms (Part II)
Self Sufficient Portfolio, index, and volume, eh when will it ever stop! So
you’ve read my first article in the Neopian Times from week 122 and you think
you know all the lingo there is to offer in the stockmarket. Now, is it time
to hit the message boards and boast of your extremely vast dialect? No, for
I’ve realized I’ve made a terrible mistake and left out many terms that are
imperative to stocks in general. Time to fix that! For the second time, I’m
about to tell you more of the terms, phrases and words to help you boost your
Stockin’ speech and make you the Savvy Investor we all want to be. In Part II,
like Part I, here goes nothing.
Average-This can be used in several ways, but for this example, I’ll use Buying
Average. Let’s say you own 5,000 shares of HELT and you spent 78,000 on them.
That means collectively you’ve spent an average of 15.6 NP per share. Averages
can be done for anything; buying, selling, portfolio stocks, and so on. (120,000
shares in 31 companies give you an average of 3871 shares per company). This
is useful for selling and buying, among other things.
Cash Flow-A Concept enlightened to me by another Neo-Stock Junkie, Richie02474.
As Richie has used this term, it is an excellent way to express how your stocks
are faring. This isn’t used for a short period of time, but again, for months
at a time. Cash Flow is negative as you start in stocks, as you don’t usually
have many sells. However, as with the Self-Sufficient portfolio, you begin to
see a point in which the cash flow is positive (Sales pay for the buys). Richie
provided me with an excellent explanation and example that I’ll tell you here:
In a given month it costs 450K to invest - 30,000 shares at 15NP a share. If
you sell maybe 20,000 shares at 30, the profit is 300,000NP. (600,000 sold minus
the 300,000 buying fee) If you sell only sell 5,000 shares at 75, the profit
is still 300,000, but you’ve sold only 375,000NP (5,000 times 75) worth of stock.
600,000NP will pay for your next month of buys, 375,000 NP won’t. It’s not all
about profit sometimes, and this explains why. The profit is the same, but the
money returned to you isn’t. Thanks Richie!
Current Investment-The Current Investment Figure represents how much NP to
this point you’ve put INTO the stockmarket. This is totally different from
Current (Market) Value.
Current (Market) Value-The Current Market Value amount shows how much your
stocks are worth at this moment. This isn’t how much you paid for them; it’s
how much they are worth NOW.
Doing Your Homework-Another one of my terms that’s more of a concept. This
entails how to smartly invest, and that’s an article in itself. Overall, use
assets as some top guilds (Like the Neo Stock Benefit Guild), my Pet’s Page
and other tools to help you succeed. Overall, this encompasses being a savvy
investor, and learning the ins and outs. You’re doing it by reading this article
and you didn’t even know it!
High/Low-Using any chart, you may see a stock’s high (peak) or low. This figure
shows how high the stock has ever climbed in its time and can be useful sell
information. A stock with a high of 272 may very well be a better stock than
one with a high of 30.
Index-Often this is the first thing a stock junkie like me looks at in the
start of a day. The index is the overall number of the Neodaq, showing respectably
how all the stocks are faring. The index opens at Midnight NST, and closes at
that same time. The index updates (As do all stocks, at half hour intervals
of :00 and :30)
Lot-This is a Stockie’s term for signaling a group of stocks bought together.
As you know, you can buy up to 1,000 shares daily, and I do. If I have 6,000
shares of DROO, it’s interchangeable to say, “I have 6 lots of DROO”. It’s just
a shorter version of saying 1,000 shares, 500 shares, etc. Overall though, a
“Lot” is almost exclusively used for 1,000 share groups.
Open-Let’s say you’re looking at your portfolio and you see DROO is listed
under “Open” at 16. What does this mean? Well, this means that at midnight NST
(when the index opens/closes), DROO was at 16. This means, for the Stock Day,
DROO started at 16. It may or may not be at 16 now because stocks change.
Percentage (% Change)-Often seen in your portfolio, Percentage Change shows
out of what fraction the stock has moved. For example, if you buy 1,000 shares
of AAVL at 15 and it moves to 30, The Percent Change is 100%, for AAVL has doubled
Portfolio-This is the grouping of where you can easily see the stocks you have
purchased and are holding. There are many other terms in your portfolio that
I will define. You can also do your buying and selling from your portfolio.
Profit Realized (To Date, This Month, This Year, etc) - This is a collective
number showing all the profit you have made in a certain timeframe. As you can
see it’s often used with different time sets. However, this only refers to the
profit realized when you sell, not just when you’re holding onto a stock with
a higher value than when you purchased it.
Profit/Loss-These two words are used together to show someone’s gain or deficit
in the market. If you buy 1,000 shares of AAVL at 15 and you sell at 60, the
profit is 45,000NP. If you buy 1,000 shares of LUPE at 100 and LUPE falls to
75 and you sell, you’ve lost 25,000NP. We don’t want losses. Never sell at a
loss. I’ve been loss free (Not including bankrupts) for almost 3 years.
Self Sufficient Portfolio-A fairly easy concept that requires a fairly long
explanation. This is when your portfolio reaches a stage in that it can feed
itself and overall not be a cost on your other money. How so? Well, let’s break
it down. For the sake of numbers let's say that all months have 30 days, a nice
round number. Now if you want to buy 1,000 shares a day (The Maximum) at 15NP
a share (The Minimum) it is going to cost you 15,000NP a day to invest. Simple
enough. Given the 30 day month, we are looking at a cool 450,000NP a month for
investing. Stocks aren’t cheap. However, as you begin to sell your stocks, you
realize a profit. Where can that profit go? Back to stocks of course. As the
profit grows, the amount of money you need to earn by playing games, restocking,
etc decreases. Once you’ve reached a point in which, on average, you make over
450 grand a month, you’ve reached this term. Now, you now longer need to fork
over bank money or any other source of money, as the profit from stocks has
done that for you.
Unique Stocks-Now I know all stocks are special, but this has another meaning.
This goes hand in hand with diversification. “Unique Stocks” mean how many different
companies you have invested in. Let’s say you have 100,000 shares in 20 companies.
You have 100,000 shares, but have 20 unique Stocks.
Volume-Often seen on any stock page. “Volume” shows the amount of stock that
everyone has bought in one day. Looking at AAVL’s profile’s I see Volume is
1713754. This number means that 1712753 shares have been bought. Personally,
in YOUR Portfolio, Volume is entitled QTY. (Quantity), and it shows how many
shares TOTAL of a single stock you are holding.
Well another wild ride through the slang and terminology we stockers have all
come to call a second language! Hopefully this article has informed you of more
of the terms useful in the game! Also, I hope this will help you become a better
investor and smarter Stock Junkie!
For more terms not listed here, check out Part I of this article, titled The
Guide to Stockmarket Jargon and Terms, featured in week 122 of the Neopian
Times. If you have any extra questions, feel free to neomail me!
And one more thing, thanks to all the folks out there who helped me brainstorm
up with all these terms to define, your part in this article was insurmountable
to calculate. Thank you.