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Neopia's Fill in the Blank News Source | 6th day of Eating, Yr 22
The Neopian Times Week 122 > Articles > The Guide to Stock Market Jargon and Terms

The Guide to Stock Market Jargon and Terms

by nyyankeesfan72

STOCK MARKET - Bread and butter, day-trader, total net profit, selling range… Eh, someone tell me in real English already!! In the worlds and wonders of the stock market, may a term have been given to describe certain stocks, patterns, and almost anything in-between. However, if you’re rather new to the game, these terms don’t mean squat to you. But luckily, I’m here for a go to try to explain some of this lingo in more simplified terms. Here goes nothing.

Bankrupt - This is when a stock hits rock bottom, zero, nada, and sadly never returns. There is no known reason why this happens in the Neo Stock Market. However, don’t stack up too much in one stock, because if this happens, your whole portfolio can be down to one big number. 0….

Bread and Butter Stock or “B and B Stock” - A certain stock with a previous high over at least 40. Normally, when these stocks are in the 15-20 NP/per share range, or moreover in the 15-18 NP/share these are considered good strong buys. These stocks can be considered safe options, and are expected to do somewhat well over a period of time. For the direct opposite of stocks, see Sleepers.

Buying Range - The 15-20 NP/share range for stocks. Normally, this is the range when most tend to buy their stocks, in hope of maximizing return profit. Some even tend to go further and buy only in the 15-18 range, while some never leave the 15 mark when they buy.

Day-Trader - A person normally considered to buy higher, more unstable stocks in large amounts in a single day. Normally, this person seeks for a daily profit, and therefore buys stocks in the 100’s/per share, given that they normally can fluctuate 10, 20, or even 30 points in one single day. Many traders can be fit into this, but I am not one of them. This is a highly unpredictable method, and often causes more harm than help.

Diversification - This is the act of when buying shares, equally spreading the amounts of the companies you buy. For example, to diversify, you wouldn’t have 15,000 of FAER, and 1,000 JCK, as they are two qualified stocks. You would have something like this, 2,500 JCK, 3,000 FAER, 4,000 BOOM… etc. This doesn’t mean however, that you have 4,000 shares of one company to 7,000 or another, as these amounts are generally considered somewhat close. But, when pouring money into the market, you are equally buying the different qualified stocks, and ‘spreading the wealth’ so to speak.

Long-term Seller - This is a person who normally buys stock for the hope of seeing long-term profits. This person mostly buys in the 15-20 range. This person can be categorized as more patient, and less susceptible to sell more minor profits. Normally, these people don’t sell their stock until they reach prices in the 50’s or beyond. They mainly like to wait out the storm, and see their stocks reach the maximum potential. I am one of these, as these people aren’t afraid to sit a stock in their portfolio and wait for a year until it blasts up. See Short-term Seller for the opposing type of seller.

Net Profit - The amount of clear Neopoints you make per sell. For example, if you buy 1,000 shares of a stock at 15, you pay 15,000 NPs. Later it jumps to 60 when you sell; you get 60,000 NPs in your pocket. However, 60,000 isn’t your profit because you paid 15,000 to buy it. So your net profit is 45,000 NP. Formula- (Selling Price-Purchase Price) =Net Profit

Patience - Pretty simple, in order to play the market, you gotta have it..This game will certainly test your ‘endurance of the mind’..If you don’t have it, consider not investing…

Selling Range - The normal range certain sellers tag on a stock. Some stocks vary with this. For example, FAER has a high of 89, so when I sell I want to see it in the 50-60’s before I do. However, with a stock like SWNC, with a high of 220, my standards are a bit higher, and I expect it to be in the 80’s or over when I sell. This varies from seller to seller, and stock to stock.

Short-term Seller - This is the seller who often goes for the quick, sure and smaller profits. This seller still tends to buy in the Buying Range, but tends to sell earlier more often. Expected sells for them can be in the 30’s. These people like to see their sure profits, and are often hesitant about leaving a stock in their portfolio for months at a time. See Long-term Seller for the opposite type of seller.

Sleepers - These are mainly the underperformer stocks, with no real breakout highs above 40. Stocks of this nature aren’t often bought as much as B and B’, but still do have their time in the sun. KSON, PEOP, and FAER are all examples of sleepers that turned B and B’s. These stocks are slightly more risky, but some investors prefer their inexpectable and erratic jumps and declines. See Bread and Butter stock for the other kind of stocks.

Takes Money to Make Money - This concept may seem complicated, but once I break it down, you will be sure to see the unmistakable logic presented in it. This concept was first coined by a famous NeoStock legend, w3neo, and has been interpreted ever since. Basically, this is saying that in order to make those massive sums (Like my 1.4 million profit in the market) you have to be willing to first spend mass amounts of Neopoints. For example, if you buy 200 shares of KSON at 15, your total input is 3000 Neopoints. Let’s just say KSON soars to 60, a strong selling point in my eyes. You sell the 200 shares for 12,000 NP, or a profit or 9,000 NP. Not too shabby, but consider this, most have their shares tied up for months at a time, some even years, before their stocks see the 60 mark. For all that wait, wouldn’t you want a little more bang for your buck? I could go on the shop wizard, and in less than an hour, find 4 cheap codestones whose profit I could sell for over 9,000 NP... 9,000 isn’t much in the long run… Now, consider this, lets say you bought 5,000 shares of KSON at 15, an input of 75,000 NP. Then KSON soars to 60, so you sell for 300,000 NP, or a 225,000 NP profit. Just look at the difference. You may say, isn’t 75,000 NP a little steep? Yes, in an aspect you’re right. However, 75,000 in the bank just get’s you some pocket change each day, and adds up to a couple thousand NP a year. Personally, I’d much rather have the 225,000 NP. See what I mean now? This is what it means to “Taking money to making money”.

Wow! Hopefully you dialect has increased to the point where instead of asking ‘What the hay does this mean in English??’ you can zing with the best of ‘em when presented with these terms. Hope to see you on the message board and Forums chatting away now that you’ve got your voice, so to speak! Any questions? Feel free to Neomail me!! Username: Nyyankeesfan72

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