Stock Market Flashcard

Front

What is a Simple Moving Average (SMA)?

Back

A Simple Moving Average (SMA) is a calculation that takes the average of a selected range of prices, usually closing prices, over a specified number of periods.

Front

What does a crossover in stock charts indicate?

Back

A crossover occurs when a shorter-term moving average crosses above or below a longer-term moving average, indicating potential changes in stock trends.

Front

What is a ticker symbol?

Back

A ticker symbol is a unique series of letters assigned to a security or stock for trading purposes, used to identify the stock on exchanges.

Front

What happens to the number of shares during a stock split?

Back

In a stock split, the number of shares outstanding increases while the price per share decreases proportionally, keeping the overall market capitalization the same.

Front

What is profit?

Back

Profit is the positive difference between revenue and expenses, indicating the financial gain of a business.

Front

What is the purpose of using SMA in trading?

Back

SMA is used to smooth out price data to identify trends over a specific period, helping traders make informed decisions.

Front

What does it mean when a stock is labeled as a 'buy'?

Back

A 'buy' label indicates that analysts or traders believe the stock's price will increase, making it a good investment opportunity.

Front

How do you calculate the total shares outstanding after a stock split?

Back

To calculate total shares outstanding after a stock split, multiply the pre-split shares by the split ratio (e.g., for a 3-for-1 split, multiply by 3).

Front

What is the significance of the high and low prices in stock trading?

Back

The high and low prices represent the highest and lowest prices at which a stock has traded during a specific period, indicating volatility and price range.

Front

What is the role of a stock exchange?

Back

A stock exchange is a marketplace where stocks are bought and sold, providing a platform for companies to raise capital and for investors to trade securities.