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Stock market glossary

Bull / Bear marketRising / falling market. Bear = a drop of more than 20 % from the highs.
CorrectionA drop of between 10 % and 20 %. Happens almost every year.
Blue chipA big, stable, well-known company.
IPOWhen a company lists on the stock market for the first time.
SplitDividing each share into several cheaper ones. It doesn’t change what your investment is worth.
Short (going short)Making money if a share falls. Very risky.
Pre-market / after-hoursTrading before the open and after the close in the US.
GapA price jump between one day’s close and the next day’s open.
Large / small capBig / small companies by market cap.
Growth / ValueFast-growing companies (usually expensive) / companies that are cheap compared with what they earn.
Diversified portfolioSpreading your money across many companies, sectors and countries.
VolatilityHow much and how fast a price moves.