1The market
2Prices
3Orders and trading
4The company
1The market
Stock exchangeThe organized place where buy and sell orders meet.
BrokerThe firm that opens your account and sends your orders to the exchange.
SessionThe part of the day when the exchange is open for trading.
IndexA single number summing up how a group of stocks moved, such as the EGX30.
LiquidityHow easily you can buy or sell a stock quickly without moving its price much.
2Prices
Last priceThe price of the most recent trade.
Previous closeThe price at the end of the last session; the day's change is measured from it.
% changeHow far the stock moved, in percent, from the previous close.
BidThe highest price someone will pay right now.
AskThe lowest price someone will sell at right now.
3Orders and trading
Market orderAn order with no price limit; it fills against the best available prices when it reaches the market, depending on the quantity available.
Limit orderThe idea: you set the highest price you will pay or the lowest you will accept; if nobody meets it, the order waits.
Stop lossA price level you set for yourself in advance to limit your loss if the stock falls.
VolumeThe number of shares that changed hands in the session.
TurnoverThe total cash value of the trades executed.
Good to knowThese define the idea only. Which order types are actually available, and how they execute, depends on your brokerage firm, so ask yours what it offers before you use any of them.
4The company
ShareA small piece of ownership in a company.
Market capThe number of shares multiplied by the share price.
EPSNet profit divided by the number of shares.
P/EPrice divided by EPS: what you pay for each EGP 1 of profit.
DividendsPart of the profit the company pays out to shareholders.
One example, three termsAn invented company has 100 million shares at EGP 5 each and earned EGP 50 million. Market cap = 100 × 5 = 500 million. EPS = 50 ÷ 100 = 0.50. P/E = 5 ÷ 0.50 = 10.
Watch outVolume and turnover are not the same. A million shares priced at EGP 2 are worth far less than a million shares priced at EGP 50.
Find these terms yourself
Open any stock page and try to spot the last price, the previous close, the volume and the market cap.
Check yourself
1. A buy order with no price limit, filling against the best available prices when it arrives. Which idea is that?
A market order has no price limit, so it fills against the best available prices, depending on the quantity available.
2. A company has 10 million shares at EGP 20. What is its market cap?
10 million shares × EGP 20 = EGP 200 million.
Summary
- Market terms describe the place, the time and who connects you to it.
- Price and order terms tell you what happened and how to trade.
- Company terms link the share price to the company's size and profit.