Form 10-K
A comprehensive overview of the state of a company's business and financial health which must be filed with the SEC within 90 days of the company's fiscal year-end.

Form 10-Q
A comprehensive overview of the state of a company's business and financial health which must be filed with the SEC on a quarterly basis.

Form 8-K
The report that a publicly-held company must file reporting on defined "material" events that might affects its financial situation or the value of its assets or shares.

Form S-1
A registration statement that is filed with the SEC prior to an initial public offering of securities.

Accredited Investor
A person or institution deemed capable of understanding and affording the financial risks associated with the acquisition of unregistered securities.

The SEC recognizes the following parties as accredited:

• An individual who alone, or with a spouse, has a net worth of over $1 million.
• An individual who alone had income in excess of $200,000 in each of the past two years (or with a spouse, in excess of $300,000 in each of the past two years) and has a reasonable expectation of doing as well in the current year.
• A financial institution such as bank, broker/dealer, insurance company or business development company.
• Any director, officer or general partner of the issuer.
• A trust or business partnership, with assets in excess of $5 million, that wasn't formed for the purpose of acquiring the unregistered securities.
• Any entity wholly owned by accredited investors.

Agent
An individual authorized by another person, called the principal, to act in the latter's behalf in transactions involving a third party.

All-or-None (AON)
A buy or sell order with the instruction to fill the order entirely or fill none at all. The order will not automatically be cancelled, however, if a complete transaction cannot be executed; to accomplish that, the order entry must be marked Fill or Kill (FOK).

After-Hours Trading
Trading that occurs after the national markets have closed and before they open.

Ask
The lowest price a seller is currently willing to accept for a particular security. Also known as the offer price.

Bid
The highest price a prospective buyer is willing to pay at a particular time for a specific security.

Bid and Ask
Often referred to as a quotation or quote. The "bid" is the highest price someone is willing to pay, and the "ask" (or asked price) is the lowest price someone is willing to receive for a security at a specific point in time.

Bid/Ask Spread
The difference between the bid and ask prices.

Block
A large quantity of stock either held or traded. Generally, 10,000 shares or more is considered a block.

Blue Chip Stock
The equity of a large and nationally known company that has a history of financial stability and quality management. The Dow consists largely of Blue Chip stocks.

Broker
A broker is a person who acts as an intermediary between a buyer and a seller, and receives a commission as compensation for his or her services.

Buy Order
An order to purchase a specified quantity of a security at the market price or another stipulated price.

Cancel Order
An order to void a buy or sell.

Change Order
An order to modify an unexecuted order.

Commission
Fee paid to a broker for executing a trade based on the number of shares traded or the dollar amount of the trade.

Common Stock
Refers to a unit of ownership in a public corporation. Owners are generally entitled to vote on important corporate matters, as well as to receive dividends on their holdings. In the event that a corporation is liquidated, the claims of secured and unsecured creditors and owners of bonds and preferred stock take precedence over the claims of those who own common stock.

Corporation
A legal, taxable entity chartered by a state or the federal government. Ownership is represented by securities.

Crossed Market
A market situation in which one broker's bid exceeds the lowest offer of another or vice versa. NASD rules prohibit a broker from intentionally entering such bids or offers.

Day Order
An order to buy or sell a security that automatically expires if it is not executed on the day the order is placed.

Day Trading
The type of trading that occurs when the same position or positions are established and liquidated within one trading day. "Day traders" typically move in and out of stock positions frequently in search of a quick profit.

Dealer
An entity that stands ready and willing to buy a security for its own account (at its bid price) or sell from its own account (at its ask price).

Dow Jones Industrial Average (or the Dow)
Best known stock index in the U.S. It contains 30 New York Stock Exchange stocks and is considered a barometer of how shares of the largest U.S. companies are performing.

Earnings Report
A statement (also called a profit and loss or income statement) issued by a company that shows its earnings or losses over a given period. The earnings report lists the revenues, expenses, and the net profit or loss.

Equity Holders
Individuals holding shares of a firm's equity.

Exchange
A market where securities, commodities, options or futures are traded, such as the New York Stock Exchange or the Chicago Board Options Exchange.

Execution
The process of completing an order to buy or sell securities.

Fill
The price at which an order is executed.

Fill-or-Kill
An order to buy or sell a stock which, if the entire order is not executed immediately, is cancelled.

Fourth Market
Direct trading of stock between institutional investors.

Hit the Bid
To sell shares of stock at the highest buy price (bid) at that time.

Immediate-or-Cancel
An order to execute as much of an order as possible immediately. The portion that is not immediately executed is cancelled.

Institutional Investors
Organizations that invest, including insurance companies, depository institutions, pension funds, investment companies, mutual funds, and endowment funds. Institutions typically have large sums of money to invest.

Last Sale
Most recent trade in a particular security.

Limit Order
Order to buy or sell a security at a specific price or better.

Limit Order Book
A record of unexecuted limit orders.

Listed Stocks
Stocks that are traded on an exchange.

Locked Market
Occurs when the bid and ask price is the same for a stock.

Low Price
Lowest price of a security that has changed hands between a buyer and a seller during a specific period of time.

Make a Market
A dealer is said to make a market when he quotes bid and offered prices at which he stands ready to buy and sell.

Manipulation
Buying or selling a security to create a false appearance of active trading and thus influence other investors to buy or sell shares, by one person or by a group. Manipulation is illegal.

Market Order
This is an order to immediately buy or sell a security at the current trading price.

Market Makers
A dealer who stands ready to buy or sell a specific security or securities at all times, thereby providing liquidity.

Market Value
The price at which a security is trading and could presumably be purchased or sold.

New York Stock Exchange (NYSE)
The oldest and largest stock exchange (founded in 1792) in the U.S. Located in New York City, it is where more than 2,000 (common and preferred) stocks are traded. Also known as the Big Board or The Exchange.

Odd Lot
An order to trade less than 100 shares of stock.

Offer
The lowest price a prospective seller is willing to accept at a particular time for a specific security.

Online Broker
A financial services firm that handles orders to buy and sell stocks and other securities over the Internet.

Open Order
A buy or sell order for securities that has not yet been executed or cancelled.

Over-the-Counter (OTC)
A decentralized market (as opposed to an exchange market) where geographically dispersed dealers are linked together by telephones and computer screens. The market is for securities not listed on a stock exchange. The NASDAQ market is an OTC market for U.S. stocks.

Purchase
To buy, to be long, to have an ownership position.

Quotation
The highest bid and lowest ask price currently available for a security.

Risk
The degree of uncertainty that is involved with an investment. Generally, investments that are expected to yield higher returns have higher levels of risk and investments that expect lower returns involve less risk.

Round-lot
Orders in 100-share increments.

Stock Symbol
Letters that identify listed companies on the security exchanges on which they trade.

Sell Order
An order to sell a specified quantity of a security at the market price or another stipulated price.

Share
Unit of equity ownership in a corporation.

Specialist
Member of a stock exchange who maintains a fair and orderly market in one or more securities.

Suspended Trading
Temporary halt in trading in a particular security, in advance of a major news announcement or to correct an imbalance of orders to buy and sell.

Securities and Exchange Commission (SEC)
The Securities and Exchange Commission is the federal agency created to administer various acts that constitute the federal securities laws.

Take
The act of accepting an offer price in a transaction.

Trader
Individuals who buy and sell for their own accounts for short-term profits. Also, an employee of a broker-dealer or financial institution who specializes in handling purchases and sales of securities for the firm and/or its clients.

Trading Halts
When trading in a stock, bond or option is suspended by the exchange in anticipation, and during the broadcast of, news about the company.

Trading Between the Spread
Trades executed between the bids offered and ask prices of a stock or option.

Unexecuted Order
Often used to refer to an "open order", or a trade that was not executed due to prices remaining beyond limits entered.

Volume
Total number of stock shares traded in a particular period.