An experienced stock professional, Michael Parness leads a premier education website that teaches subscribers about stocks, options, futures, and FOREX. On account of his success within the field, Michael Parness has been invited to present seminars about day trading around the country, including at UCLA and Tulane University. He also stands out as the first graduate-level educator in the United States to focus on day trading as a subject.
Day trading, the practice of buying and selling a security on the same day, may seem simple, but it can become rather confusing if new traders are unfamiliar with the basic terms that are used during the process. Following are a few basic day-trading terms and definitions to make the process a bit easier.
1. Buying long, also known as opening or buying to open, refers to the purchasing of stock or securities with the intention of increasing a position that already exists, or initiating a new position. Conversely, selling these types of stock or securities with the intention of reducing a position is referred to as selling long, or selling to close.
2. Ask price, or offer, is the price of an individual security. Ask prices are generally the lowest price that sellers would consider accepting. Bid prices are the prices buyers are ready to pay for a security.
3. Scalping is a specific day-trading strategy that involves quickly entering and exiting a stock. The strategy involves making quick profits on small price movements, and individuals using this strategy often complete many trades throughout the day.
4. Shorting is a strategy that allows brokerages to lend out stock shares to sellers. Sellers then find a buyer for the stock, sell it, and later buy it back at a lower price before returning it to the brokerage.
Michael Parness's Wordpress Blog 