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Definition of Block Trade A block trade is a very large order to buy or sell a security—typically 10,000+ shares of stock (excluding penny stocks) or $200,000+ in bonds—executed privately or off the open exchange to avoid moving the market price. These trades are usually arranged through an investment bank or a broker’s “block desk.”

Definition of Day Order When you place a stock trade, one of the key decisions you make is how long that order should stay active. A Day Order is one of the most common choices. Simply put, a Day Order is valid only for the trading day in which it was placed. If the market doesn’t meet your terms before the close, the order expires automatically. No overnight carry, no surprises the next day.

Definition of Fill or Kill If you like your stock orders the way you like your coffee—exactly how you want it or not at all—then you’ll appreciate the Fill or Kill order. A Fill or Kill (FOK) order tells the market: “Fill the entire order immediately at my stated price (or better), or cancel it right now.” There’s no partial fill, no waiting, and no compromise.

Definition of Good Till Canceled A Good ’Til Canceled (GTC) order is a standing instruction you place with your broker to buy or sell a security at a specific price that remains active until it’s executed or you cancel it. Depending on the broker, it can sit there for up to 30–90 days before auto-expiring (check your platform’s policy). In short: set it and don’t forget it.

Definition of Stop-Limit Order A stop-limit order combines two instructions: a stop price that triggers your order, and a limit price that sets the worst price you’re willing to accept. When the stop price is hit, your order becomes a limit order—and it will only fill at the limit price or better. That gives you price control, but no guarantee the trade actually executes.

Definition of Stop Order Want your investments to come with an “emergency brake”? That’s what a stop order does. It’s an instruction you place with your broker to buy or sell a security once it hits a specific stop price. When the stop price is reached, your order is activated—usually as a market order—to help you lock in gains or limit losses without staring at charts all day.

Definition of a Limit Order A limit order lets you set the maximum price you’re willing to pay to buy, or the minimum price you’re willing to accept to sell. - Buy limit order: “Buy ABC if it hits $50 or less.” - Sell limit order: “Sell ABC if it reaches $75 or more.” Your broker won’t execute unless the market meets your limit. It protects you from paying more (on buys) or accepting less (on sells) than you want.

Definition of Market Order A market order is an instruction to buy or sell a security immediately at the best price currently available. It prioritizes speed of execution over the exact price you’ll pay or receive.

Definition of Reverse Stock Split A reverse stock split is when a company reduces the number of its outstanding shares while increasing the share price proportionally. Think of it like trading in 10 dimes for 1 dollar bill — you still have the same amount of money, but in fewer pieces.

Definition of Stock Split A stock split is a corporate action in which a company increases the number of its outstanding shares by issuing more shares to existing shareholders. Although the number of shares increases, the overall value of the company (market capitalization) stays the same. Think of it like cutting a pizza into more slices—more pieces, same amount of pizza.

Definition of Common Stock Common stock represents ownership in a company. When you buy common stock, you’re essentially buying a small slice of that business. As a shareholder, you’re entitled to a portion of the company’s profits (usually in the form of dividends if paid), and you have voting rights to help elect the board of directors or vote on major company decisions. Think of common stock as your seat at the table—albeit maybe at the back if you only own a few shares.

What is Preferred Stock? Preferred stock is a type of ownership in a company that has a higher claim on assets and earnings than common stock. That means if the company pays dividends, preferred shareholders get theirs first. If the company goes belly-up (let’s hope not), preferred shareholders also get paid before common stockholders—though still after bondholders.

Definition of Dividend Stock A dividend stock is a share in a company that regularly pays out a portion of its profits to shareholders in the form of dividends—typically on a quarterly basis. These payments are usually made in cash, but can also come as additional shares of stock.

Definition of Value Stock A value stock is a share of a company that appears to be trading for less than its intrinsic value. Think of it as a great company that’s momentarily on the clearance rack. Investors believe the stock is undervalued by the market and has solid fundamentals—like steady earnings, a strong balance sheet, and even dividends—but for whatever reason, Wall Street’s spotlight isn’t on it… yet.

Definition of Growth Stock A growth stock is a publicly traded company that is expected to grow at a rate significantly above the average for the overall market. These are the kinds of companies reinvesting their earnings back into the business instead of paying dividends, with the goal of expanding fast—think rocket fuel, not steady cruise.

Definition of Penny Stock A penny stock is typically a share of a small public company that trades for less than $5 per share. These stocks are often traded over-the-counter (OTC) through platforms like the OTC Bulletin Board or Pink Sheets, rather than on major exchanges like the NYSE or Nasdaq. Penny stocks are known for their low price, low trading volume, and high risk—but also the potential for high reward.

Definition of a Blue Chip Stock A blue chip stock refers to shares of a well-established, financially sound, and nationally recognized company with a history of reliable performance. Think of them as the all-star players in the stock market—companies that are leaders in their industries, pay regular dividends, and have a track record of weathering economic storms.

What is a Conglomerate? A conglomerate is a large corporation made up of several distinct and often unrelated businesses, all operating under one parent company. Unlike a company that sticks to one specific industry, a conglomerate spreads its interests across different sectors. Think of it as a financial “supergroup” — each division plays a different instrument, but they’re all under the same record label.

Definition of Holding Company A Holding Company is a business entity that exists primarily to own shares in other companies. It doesn’t usually make products or offer services itself—instead, it holds controlling interest in other businesses. Think of it like the parent who doesn’t run the lemonade stand but owns the stand… and the ice supplier… and the cup factory.

Definition of a Parent Company A parent company is a corporation that owns enough voting stock in another company to control its policies and management. The company it controls is called a subsidiary. Think of a parent company as the “boss” in the business family tree. While it may not run the day-to-day operations of its subsidiaries, it has the power to call the shots when it matters—like choosing leadership, approving budgets, or selling the business.