Call option - Financial contracts known as call options grant the option buyer the right, but not the duty, to purchase a stock, bond, commodity, or other asset or instrument at a particular price within a predetermined window of time. The underlying asset is a stock, bond, or product. When the value of the underlying asset rises, the call buyer makes money. A put option, as contrast to a call option, allows the holder to sell the underlying asset at a predetermined price on or before the expiration date.
Candlestick chart -Type of price chart used in technical analysis, which shows the high, low, open, and closing prices of a securities over a given time period. Before becoming well-known in the US, it was first used by Japanese rice dealers to keep track of market prices and daily momentum over three centuries ago. Based on whether the closing price wasis greater or lower than the opening price, the wide portion of the candlestick chart known as the body of the candle, or simply the candle, informs investors of the trade emotion for that particular time frame (red if the stock closed lower, green if the stock closed higher).
Capitalization - The overall market value of a firm and is defined as the number of outstanding shares multiplied by the share price. Market capitalization is another term for an accounting method in which a cost is included in the value of an asset, and is then deducted during the asset's useful life rather than being deducted at the time the cost was incurred.
Certificate of deposit (CD) - A type of savings product that accrues interest on a single sum of money for a predetermined amount of time. Unlike savings accounts, CDs require that the money remain untouched over the full term to avoid penalties and lost interest. Savings accounts often provide lower interest rates than CDs as compensation for liquidity loss. The majority of consumer financial institutions provide certificates of deposit (CDs), although each bank is free to set its own conditions, rate of interest in comparison to savings and money market products, and early withdrawal fees.
Common stock - Security that represents ownership in a corporation. Common stocks must be issued by the corporation itself. Common stock owners choose the board of directors and cast ballots for corporate rules. Long-term rates of return are often higher with this type of stock ownership. Common shareholders, however, do not have any rights to a company's assets in the case of liquidation until all bondholders, preferred shareholders, and other debt holders have received their full repayment. In the stockholders' equity section of a company's balance sheet, common stock is disclosed..
Contracts (options and/or futures) - Futures contracts are available for a wide range of financial assets, including precious metals and equity indexes. Depending on which way investors predict an underlying product will move, trading options based on futures entails either buying or writing call or put options. A way to benefit from the movement of futures contracts is by purchasing options, which is much less expensive than purchasing the actual future. If investors believe a future's value will rise, they will buy a call. If investors anticipate a future's value to decline, they will buy a put. The premium is what investors pay to purchase the choice. Option writers are also traders.