An investor who wants to sell a particular security offers an ask, in which they tell the market how much money they are willing to accept for a certain number of shares of some security. This must be balanced with the bid, which is the offer made by the buyer. In order for a trade to be executed, the price must be greater than or equal to the ask, and less than or equal to the bid.

An investor who wants to buy a particular security makes a bid, in which they tell the market how much money they are willing to pay for a certain number of shares of some security. This must be balanced with the ask, which is the offer made by the seller. In order for a trade to be executed, the price must be less than or equal to the bid, and greater than or equal to the ask.

A stockbroker is an individual (usually from a large firm), who fulfills trades on your behalf. In exchange for a fee, they execute buy and sell orders that you placed.

Beta, β or the beta coefficient is one of “The Greeks”. It describes how much the movement of the market as a whole affects the movement of a given stock. For instance, a stock with a beta of 0.75 moves up or down 75 points for every 100 points that the market as a whole moves. A beta that is greater than one indicates a volatile stock. In some cases, beta can be negative (i.e. the price of the security increases when the rest of the market falls, or vice versa), but this is extremely rare.

Moving Average is a technique to show trends in data while minimizing the effect of random changes. For instance, in the case a the price of a stock, a 10-day Moving Average would be the computed as the average of the prices over the last 10 days. Each day, the Moving Average is updated by dropping the oldest price and including the current day’s (newest) price in the average. Moving Averages can be computed for various durations and using various methods.

A mortgage is a loan where the lender obtains a legal right to specific property if the borrower fails to make the required payments on a loan. A common case is when a borrower obtains a mortgage loan to purchase a house, and the lender has the right to seize and sell the house if loan payments are not made.

Volume is a measure of the how much of an asset trades over a day or other period. For example, about 150 million shares of Apple Computer are traded on an average day. Volume is important because significant changes in volume are in indicator of investor interest or events related to an asset.

Venture capital or VC is a form of financing that enables investors to invest money in young start-ups. Venture capitalists are frequently former entrepreneurs that also have the experience to help their portfolio companies scale their business and succeed. VC firms are very active in Silicon Valley and the technology industry.

An annual report is a document that public corporations are legally obligated to publish for their stockholders each year. In addition to a narrative describing the company’s accomplishments for the year, it provides other specific details to help shareholders evaluate the company’s financial situation and trajectory. In the United States, companies submit their annual report, called a Form 10-K to the Securities and Exchange Commission. You can search company filings on the EDGAR (“Electronic Data Gathering, Analysis, and Retrieval”) Database at: www.sec.gov/edgar/searchedgar/companysearch.html