Stock Market Glossary
C
Uses a rectangular body and wicks to show open, close, high, and low prices for a period
Example: A green candle means the closing price is higher than the opening price (bullish)
The last transaction price at the end of each trading day
Example: TSMC closed at 605 today
D
Dividend per share divided by stock price, measuring return on investment
Example: Dividend 3 per share, price 60, yield = 5%
Buying and selling within the same trading day without holding overnight
Example: Buy TSMC in the morning, sell in the afternoon, same-day settlement
E
When distributing dividends, the stock price is adjusted down by the dividend amount on ex-date
Example: Dividend of 3, pre-ex price 103, post-ex reference price 100
Company's net income divided by shares outstanding
Example: Annual net income 10B, 1B shares outstanding, EPS = 10
I
Institutional investors include foreign investors, investment trusts, and dealers
Example: Foreign investors net bought 5,000 lots of TSMC today
L
The maximum daily price increase for Taiwan stocks is 10% of the previous closing price
Example: Stock closed at 100, limit up price is 110
The maximum daily price decrease for Taiwan stocks is 10% of the previous closing price
Example: Stock closed at 100, limit down price is 90
M
Borrowing from a broker to buy stocks, only requiring partial margin deposit
Example: 60% margin rate: buy 1M of stock with only 400K of your own funds
Average of past N days' closing prices, forming a trend indicator line
Example: 5-day MA crossing above 20-day MA is called a golden cross
Stock price times total shares outstanding, representing a company's total market value
Example: TSMC at 600 x 25.9B shares = ~15.5 trillion market cap
Moving Average Convergence Divergence, used to identify trend direction and momentum
Example: MACD line crossing above signal line is a buy signal
O
Shows the best five bid and ask prices with their quantities in the market
Example: The order book shows 5 price levels each for buyers and sellers
The first transaction price at the start of each trading day
Example: TSMC opened at 598 today
P
Price divided by earnings per share, measuring how much investors pay per dollar of earnings
Example: Price 100, EPS 5, P/E Ratio = 20x
Price divided by book value per share, measuring premium over book value
Example: Price 50, book value 25 per share, P/B ratio = 2x
R
Relative Strength Index measures the speed and magnitude of price changes
Example: RSI > 70 is overbought, RSI < 30 is oversold
S
Borrowing shares to sell, expecting to buy back at a lower price for profit
Example: Short sell at 100, buy back at 90, profit of 10
A preset price at which you automatically sell to limit losses
Example: Buy at 100, set stop loss at 95 (-5%)
T
A preset target price at which you sell to lock in profits
Example: Buy at 100, set take profit at 115 (+15%)
V
The total number of shares traded during a specific period
Example: TSMC traded 25,000 lots today