Investing Lingo

Share, spread, exchange…the investment world lingo could be mistaken for dating app cues.  Here, we’ve explained some well-used terms you may find useful.

Revenue… The money made by a company from all sales.

Profit… The money made by a company after expenses have been deducted from revenue.

Dividends… The profits paid out to shareholders.

Capital Gain… Money you made from owning an investment – like shares or a property - that has gone up in price. 

Founder(s)… The person or people who set up the company and are involved from the beginning, aka the first shareholders of the company. 

Share(s)… A portion of a company.

Stocks… A collective word for all the shares you own from different companies.

Shareholder… The owner of a portion of a company, whether small or large. 

Equity… The amount you own of a company, which is the amount of shares you have. Example: ‘I have equity in Facebook. How much equity do you have?’

Stock Exchange… A place where shares of public companies are bought and sold. 

Spread… The difference between the buy price and the sell price of a share. It’s essentially the charge made by the ‘middle-man’ connecting buyers and seller. 

Liquidity… How easy it is to buy or sell shares of a company (or any other traded product) depending on how many buyers and sellers there are in the market. If there are no buyers or no sellers available the shares are not liquid and called 'illiquid'. Example: Facebook’s shares are liquid because there are millions of shareholders and lots of people interested in buying the shares’ while a new, smaller public company may be illiquid because no one has heard of them so there isn’t a pool of people ready to buy.