Stock Market/Trading 2

📚 Key vocabulary
stock — a share of ownership in a company, entitling the holder to a portion of its assets and earnings
equity — ownership interest in a company, represented by shares of stock
blue-chip stock — shares in a large, well-established, and financially sound company with a long track record
market capitalization — the total market value of a company's outstanding shares, calculated as share price times total shares
P/E ratio (Price-to-Earnings) — a valuation metric comparing a company's share price to its earnings per share
volatility — the degree of variation in a financial instrument's price over a period of time
shorting — borrowing and selling a security in anticipation of buying it back later at a lower price to profit
index fund — a type of mutual fund designed to replicate the performance of a specific market index
liquidity — the ease with which a security can be bought or sold in the market without affecting its price
earnings per share (EPS) — a company's net profit divided by the number of outstanding shares, indicating profitability