Main Keywords: basic stock market terms, investment terminology explained, investing knowledge for beginners

Introduction

Just started learning about the stock market and feel overwhelmed by all the jargon? Don’t worry — you’re not alone. In this article, we’ll walk you through the most essential stock market terms, explained in a simple, easy-to-understand way, complete with practical examples.

📌 Why is it Important to Understand Stock Market Terminology?

• Helps you understand financial analysis and stock price tables.

• Enables clear communication with brokers and the investing community.

• Prevents misinterpretation and poor trading decisions.

📚 15 Important Stock Market Terms for Beginners

1. Stock

A security that represents ownership in a company. Buying a stock means you become a shareholder.

2. Dividend

The profit distributed to shareholders. It can be in cash or additional shares.

Example: If ABC Corp. declares a 15% cash dividend, you’ll receive 1,500 VND for every share you own.

3. VN-Index / HNX-Index

Indices that reflect the market’s performance. VN-Index represents HOSE (Ho Chi Minh Stock Exchange), while HNX-Index represents the Hanoi exchange.

4. Ceiling Price / Floor Price

The highest and lowest price limits a stock can reach during a trading day.

5. Trading Volume

The total number of shares traded in a session. High volume indicates active market participation.

6. LO / ATO / ATC Orders

• LO (Limit Order): An order to buy/sell at a specified price.

• ATO (At the Open) / ATC (At the Close): Orders executed at the opening/closing price.

7. P/E (Price-to-Earnings Ratio)

A valuation metric: P/E = Stock Price / Earnings Per Share (EPS).

Example: Stock price is 50,000 VND, EPS = 5,000 VND → P/E = 10.

8. EPS (Earnings Per Share)

The profit earned per share. A higher EPS indicates better business performance.

9. NAV (Net Asset Value)

The total value of a fund’s assets minus its liabilities. Often used in mutual funds.

10. Margin

Borrowing money from a brokerage to buy stocks. High risk — if prices fall, losses can double.

11. Bluechip Stocks

Shares of large, stable, and liquid companies, such as FPT, VNM, VIC.

12. T+2 / T+0

• T+2: You can sell a stock 2 business days after buying it.

• T+0: Buy and sell on the same day (applies to derivatives or special cases).

13. IPO (Initial Public Offering)

The first time a company offers shares to the public and becomes listed on a stock exchange.

14. Bull Market / Bear Market

• Bull Market: A period of rising stock prices.

• Bear Market: A period of declining stock prices.

15. Foreign Ownership Limit (Room)

The maximum percentage of shares that foreign investors are allowed to own in a company.

🎯 Quick Tips to Learn Stock Terms Faster

• Use stock trading apps that explain terminology as you go.

• Follow beginner-friendly videos on investing and stock markets.

• Take notes of unfamiliar terms from news or reports and look them up immediately.

✅ Conclusion

Understanding basic stock market terminology is a must-have foundation for anyone serious about investing. Start small, apply what you learn in real situations, and maintain a habit of continuous learning. Stock investing isn’t hard when you have the right vocabulary and mindset!