Monday, April 16, 2012

Finance Glossary



Aggressive:
An investment strategy with an above-average risk tolerance, with the expectation of above-average returns. Aggressive strategies usually favor the purchase of stocks of rapidly growing companies, buying on margin, and options trading.


Buy and Hold:
An investment strategy in which stocks are bought and then held for a long period of time, regardless of the market's fluctuations. This strategy is based on the assumption that in the very long term (10-20 years), stock prices will go up and the market as a whole will rise despite any short-term fluctuations due to business cycles or rising inflation. Trade commissions are reduced by buying and selling less often and taxes are often reduced or deferred by holding positions longer.




Buy at Open:
 If you'd like to implement this type of trading order, then you should place a market order before the market opens up for trading (9:30 AM EST). When placing a market order, your trade will be filled at whatever the opening price is on that morning.


Day Trader:
A very active stock trader who buys and sells the same security very quickly, executes a large number of trades each day, and generally closes all positions at the end of each trading day.