Stock trading refers to the process of buying and selling shares of publicly traded companies and exchange-traded funds (ETFs) on stock exchanges. These shares represent ownership stakes in companies. Trading them allows investors to gain exposure to the financial performance of these businesses.
This article explains essential stock trading terms to help you navigate the market.
Stocks terminology list
- •Commission-free: Term used to indicate that Kraken charges zero fees on stocks trades. Note: Regulatory fees may still be payable.
- •Day trade: The buying and selling (or selling and buying) of a stock within the same trading day.
- •Listing exchange: A regulated marketplace where companies' securities, such as stocks, are officially listed and traded, providing a platform for transparency, liquidity, and investor access. Examples include the NYSE and Nasdaq.
- •Listing date: The date a company was listed on an exchange and its securities made available for trading by the public.
- •National Best Bid and Offer (NBBO): The National Best Bid and Offer (NBBO) is a regulation in the U.S. that ensures traders get the best available price when buying or selling stocks. The NBBO shows the highest bid price and lowest ask price across all exchanges, representing the tightest bid-ask spread.
- •Pattern Day Trading (PDT) rule: A regulation set by the Financial Industry Regulatory Authority (FINRA) in the U.S, which applies to anyone trading stocks listed on a U.S. exchange.
- •Stock: A share of ownership in a company, giving the holder a claim to a portion of the company’s assets and profits, often accompanied by voting rights in corporate decisions.