For new investors, entering the stock market can be intimidating when jargon like “dead cat jumps,” “whales,” and “bear market” dominate the space (and while it may sound like a zoo, rest assured, no real animals are involved are ).
That’s why many investors turn to search engines like Google for answers, with the term “stock market” getting more than 2.4 million Google searches every month, according to search engine optimization software Ahrefs.
Financial services firm CMC Markets used global Google search data to understand which terms confuse investors the most.
READ: CMC Markets On Course To Diversify Revenue, Says Broker
Michael Hewson, chief market analyst at CMC Markets, said it’s not surprising that many people find financial markets terminology confusing.
“As market professionals, we have to get used to new acronyms on a regular basis before you consider those that are used regularly,” he said.
“If you want to deepen your interest in the financial markets, being able to understand the language that is used on a regular basis is a great benefit.”
Commonly searched financial terms explained
According to CMC Markets analysis of global Google search data, these are the top 15 stock market terms internet users want to understand and what they mean.
ETF (average monthly searches 103,000): ETF stands for Exchange Traded Fund. An ETF is a mutual fund made up of multiple assets, which can include stocks, commodities, bonds, or a mix of investment types known as equity. ETFs are traded on an exchange like a stock. ETFs are generally considered safer investments because they are less volatile than individual stocks.
initial public offering (average monthly searches 95,000): IPO stands for Initial Public Offering. An IPO occurs when a private company publicly offers its shares on a stock exchange for the first time. IPOs serve to raise capital and raise the public profile of companies.
estate agents (average monthly searches 46,000): A broker is an individual or firm that buys and/or sells securities on behalf of an investor. They may also provide investors with research, investment advice and market information.
arbitrage (average monthly searches 23,000): Arbitrage is the simultaneous buying and selling of a security, currency or commodity in different markets to take advantage of different prices for the same asset. For example, if a stock is trading for $10 on the New York Stock Exchange (NYSE) and $11 on the London Stock Exchange (LSE), a trader could buy the stock on the NYSE and immediately list it on the LSE at a profit of sell $1 a share.
ADR (average monthly searches 22,000): ADR stands for American Depository Receipts. ADRs are securities issued by a bank that represent shares in a non-US company that are traded on a US stock exchange. They offer US investors exposure to non-US equities without increasing the complexity of trading foreign equity markets.
bear market (average monthly searches 11,000): A bear market occurs when the price of securities falls steadily, generally when a broad market index falls 20% or more from its most recent high.
bull market (average monthly searches 7,600): A bull market is the opposite of a bear market, which occurs when the price of a security continues to rise.
To the moon (average monthly searches 4,900): The phrase to the moon, often accompanied online by a rocket emoji, is used by an investor for a stock that he thinks will see a huge rise. The phrase is popular with meme stock and cryptocurrency traders.
dividend yield (average monthly searches 3,900): Dividend yield is a financial metric that tells investors what percentage of a company’s stock price is paid out in dividends each year.
Dead cat jumps (average monthly searches 3,200): A dead-cat bounce occurs when stock prices rise temporarily after a significant drop, caused by speculators buying to cover their position. The expression comes from the Wall Street expression “Even a dead cat jumps up when it falls from a great height.”
refueling (average monthly searches 2,400): A stock suffers when its price falls very quickly. It often occurs when companies report quarterly earnings that fall short of market expectations or when negative news is released.
average down (average monthly searches 2,300): Averaging Down is an investment strategy that invests additional money in a stock when its price falls in order to lower the average cost of each stock.
whales (average monthly searches 1,800): A whale is a nickname for investors, both individuals and corporations, who have enough money or power to manipulate the market, typically by making a significant investment or cashing out a large position in a particular stock or a specific security.
day trading (average monthly searches 1,700): Day trading is an investment strategy that involves buying and selling stocks on the same day to take advantage of short-term price movements.
margin account (average monthly searches 1,600): A margin account is a type of brokerage account where a broker lends money to an investor to buy securities, using the account as collateral. In return, the investor pays the broker a periodic rate of interest.
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