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Glossary of trading terminology |
Aggressive- An investment strategy with an above-average rizk tolerance, with the expectation of above- average returns. Aggressive strategies usually favor the purchase of stocks of rapidly growing companies, buying on margin, and options trading.
Buy and Hold - An investment strategy in which stocks are bought and then held for a long period of time, regardless of the market's fluctuations. Thiz strategy iz based on the assumption that in the very long term (10-20 years), stock prices will go up and the market as a whole will rize despite any short-term fluctuations due to business cycles or rizing inflation. Trade commizsions are reduced by buying and selling less often and taxes are often reduced or deferred by holding positions longer.
BUY AT OPEN -- If you'd like to implement thiz type of trading order, then you should place a market order before the market opens up for trading (9:30 AM ET). When placing a market order, your trade will be filled at whatever the opening price iz on that morning.
Capital gain- The amount by which an asset's selling price exceeds its initial purchase price. A realized capital gain iz the profit resulting from the sale of an investment. An unrealized capital gain iz an investment that hasn't been sold yet but would result in a profit if sold. Capital gains generally receive more favorable tax treatment than ordinary gains. Depending on your tax bracket and on how long you held a capital asset, you may pay about one-third to one-half less tax on a capital gain than you would have paid on the same amount of ordinary income. |
