A brokerage account is a type of investment account opened with a brokerage firm (like Bumped) that allows you to buy and sell a variety of investments, such as stocks and ETFs.
A firm or individual that acts as an agent between the buyer and the seller of an investment.
An online tool that provides information about brokers and brokerage firms to investors. For more information visit the FINRA BrokerCheck website.
A firm that buys or sells securities for clients or its own accounts.
Board of directors
The board of directors is an elected group of individuals with the role of representing stockholders in company decisions. Directors are often elected at Annual Meetings.
A capital gain/loss is the difference between what you buy and sell a stock for. For example, if you bought $100 of stock today and then sold it for $150 in ten years, your capital gain would be $50, since you made $50 on your investment. Likewise, if you purchase a stock for $100 and sell it for $50 ten years later, your capital loss is $50, since you sold it for less than you purchased it for.
An institution that acts as the intermediary between brokerage firms, exchanges, and other clearing corporations for settling trades and delivering securities.
A dividend is a way to share in the profits of the companies that you own stock in. Dividends are issued as a fixed payment per share of stock to the owner of the stock. For example, if you own five shares of ABC stock, and ABC company declares a $.05 dividend, you will receive $0.25 in dividends ($0.05 x 5 shares). Dividends are often issued by more mature companies and can be delivered to investors sporadically. Head on over to our blog to find out more about dividends, or read this support article to learn how Bumped handles dividends.
An earnings report is a report created by publicly-traded companies about their financial performance. Earnings reports are often an important driver of stock price changes. A positive earnings report may result in higher demand for the stock, and in turn, higher stock prices. A negative earnings report (or one that does not live up to expectations) may drive the stock price down.
Exchange-Traded Funds (ETF)
Exchange-Traded Funds (or ETFs) are an investment fund that has stocks, bonds, or other assets that are traded on a stock exchange.
Equity is ownership. When you own a part or all of something, you have equity in it. Companies issue shares of stock as a way to raise capital. When someone invests by buying shares in a company, they become a partial owner. When they become a partial owner, they have equity in the company.
The date a stock begins to trade without the new owner receiving the dividend.
Financial Industry Regulatory Authority (FINRA)
FINRA is a self-regulatory organization that creates and enforces rules governing the securities industry. FINRA also provides market surveillance, arbitrates disputes, and licenses registered persons.
A fractional share of stock is part of a full share of stock. Imagine you take a $100 share of stock and split it into 50 pieces. You can now buy one of those pieces (a fractional share) for $2 and become an investor without paying to buy a full share of stock. Learn more about “micro investing” with fractional shares here.
Investing is the act of using money to buy something with the hope that it will increase in value, and can be sold for more money in the future. There are many things we can invest in: stocks, bonds, real estate, Star Wars toys… you get the point. These are all things you buy in the hope they will become worth more in the future so you can sell them for a profit. Investments can also become worth less, which means you may only be able to sell them for less than you bought them for.
Initial Public Offering (IPO)
An Initial Public Offering (aka IPO) is when a company begins selling shares of its stock to the general public for the very first time. Before an IPO, the only shareholders are usually people like the founders, family and friends, early employees, and professional investors. Afterwards, shares can be bought and sold on public stock exchanges (hence the phrase “going public.”)
The specified hours at which the stock market is open for buying or selling securities. The NYSE and Nasdaq operating market hours are 9:30 a.m. to 4:00 p.m Eastern Time.
The most recently-quoted price for a stock.
NYSE, or the New York Stock Exchange, is an American stock exchange, and the world's largest stock exchange.
In investing terms, your portfolio is all the various stocks, bonds, or other investments you own. If you own stock in 20 different companies, those 20 companies make up your investment portfolio.
Proxy voting is a common way for the owners of a company’s stock to vote in annual shareholders meetings. When shareholders vote by proxy rather than attending the annual meeting in person, they designate someone to represent their vote in the company matters being voted on. This designated person casts a vote in line with what is indicated on the proxy ballot, giving shareholders the ability to vote in shareholder meetings without being physically present. The number of shares held typically equates to the number of votes allowed.
Publicly-traded companies are those either partially or completely owned by the public. A publicly-traded company is created when a private company goes public, called an initial public offering (IPO). Going public means the company is offering small pieces of ownership that can be purchased by the general public, making those purchasers partial owners in the company.
Rate of Return
The rate of return is the amount the price of stock changes over a set period of time. For example, you may hear that a stock price increased by 1.5% on a specific day. The daily rate of return for this stock is 1.5%. Rates of return may also be discussed in any amount of time, such as monthly, annually, 10 years, or even 50 years. This refers to how much has the stock price changed over the designated period of time and can be either a positive or negative rate of return..
Securities and Exchange Commission (SEC)
The SEC is a federal government agency tasked with regulating the securities industry and protecting investors.
The date that a trade is settled. It’s the date that sellers are expected to sell the security and buyers are expected to buy the security. The standard settlement date for stocks is two business days after the trade date (T+ 2 days). For example, if you initiate a stock sell on a Friday, it should settle by the following Tuesday. Keep in mind that holidays may affect how long it takes for stock to settle.
A share is a specific term for ownership of stock in a specific company.
A stock exchange is a place (physical or electronic) that facilitates the trading of stocks. Those wishing to buy and sell stocks are matched together on an exchange where they can trade ownership of the stock. For example, if you place an order to purchase $100 of stock, your “buy” order is taken to an exchange and matched up with a “sell” order for that same stock, completing a stock exchange.
A stock is a general term for a piece of ownership in a company. Learn more about stocks and shares here.
A stock split occurs when full shares of stock are split by some predetermined ratio. For example, a 2-for-1 stock split means that for every existing full share, it will be split into 2 shares. When this occurs, the price is cut in half, and the number of shares doubles. If you own 20 shares of a $10 dollar stock that undergoes a 2-for-1 split, you will own 40 shares of $5 stock after the split.