Account statement. A summary of all the transactions between a broker and client

Bear market. A period when stock prices are generally falling

Bull market. A period when stock prices are generally rising

Blue Chip. One of the top, best-quality stocks.

Common stock. When "stock" is mentioned by itself, you can assume the stock is common stock. The holders of common stock typically elect the company's Board of Directors, which has overall responsibility for the management of the company.

Correction. A drop in the price of a stock after an extended rise.

Discount broker. A broker who provides few services and thus can perform trades for a low commission. Compare with full-service broker.

Dividends. Payments made to shareholders out of the profits of the company, usually on a quarterly (once every three months) basis. A dividend is declared by the company's Board of Directors for each share of stock outstanding.

Earnings Per Share. The company's net income (i.e., earnings) divided by the total number of shares outstanding.

Equity. Another term for stock.

Full-service broker. A broker who provides many services to investors, including execution of trades, recommendations on which stocks to buy or sell, and advice on financial planning. Commissions for full-service brokers are higher than those charged by discount brokers. Compare with discount broker.

Initial Public Offering (IPO) A company's first issuance of stock to the public

Insider trading Transactions done by the directors or top executives of a company (known as insiders). There is nothing illegal or wrong about insiders trading in their company's stock, unless they act on non-public material information.

Long. To go long in a stock means to buy the stock.

Margin. A way to finance stocks by borrowing money from your broker. Buying on margin should be done only by sophisticated investors.

Market capitalization. The number of outstanding shares times the stock price

Online broker. A broker that primarily allows you to buy and sell stocks through the Internet

Penny stocks (or pink sheet) stocks are highly speculative stocks. Precise definitions vary: Some say they are stocks whose shares cost less than a $1, others define them as companies whose market capitalizations are less than $100 million. However described, they are risky investments and not suitable for a long-term investment program.

Sector. The industry in which a company resides (such as the Internet or Biotech sector).

Short. To "go short" is a technique where you make money if the price of the stock goes down. Not recommended for new investors.

Ticker symbol. One or more letters used to identify a stock. Ticker symbols are useful for trading stock and finding information about it, especially the current stock price.