As distinguished from the secondary market, in which buyers and sellers trade securities, the primary market is when issuers of a given security sell it directly to investors.

A private offering is when a privately held corporation solicits new investors in its stock; or when a public corporation sells stock directly to a large institutional investor.

A privately held corporation is a company in which shares are not circulated freely. Normally they are closely held, but regardless of their size, privately held corporations do not trade on exchanges and are not registered with the SEC.

Profit margin is the percentage of each sales dollar that is kept as profit. For example, if a company had $10 billion in sales and $8 billion in total costs and expenses, it would have a 20% profit margin.

A prospectus is a document that is circulated whenever a new security is issued via IPO. Mutual funds also offer prospectuses to individual investors.

A public corporation is a company whose stock is traded on one of the major exchanges, the NASDAQ, the OTCBB or the Pink Sheets. The vast majority of public corporations are required to register with the SEC.

A put option gives its holder the right, but not the obligation, to sell a stock at a given price (the strike price) within a given period of time (before expiration). The holders of puts profit when the underlying stock goes down, and thus, they are said to be bearish.

When companies are financed by operations, their management redeploys their earnings in order to fund future growth.

A technical indicator made popular by Investor's Business Daily.

Prior to filing a prospectus with the SEC, a private company in search of investors may circulate a red herring, which is a pre-prospectus document.

In technical analysis, this is the price level at which a stock has a hard time breaking through.

An individual's risk tolerance is his ability to stomach the ups and downs of the market. People with low risk tolerance are better suited for conservative investments, while people with high risk tolerance may enjoy the thrill of more aggressive strategies.

An index that measures the performance of the smallest two-thirds of the 3,000 largest stocks (i.e. stocks ranked #1,001 through #3,000 by market capitalization). The Russell 2000 is a proxy for small cap stocks the same way the Dow Jones Industrial Average is for large caps.

The Standard & Poor's 500 is an index that measures 500 of the largest stocks traded in the United States. It is not, however, the largest 500, as the Standard & Poor's company periodically makes additions and subtractions from the index in order for it to best reflect the entire stock market.

In the aftermath of the Enron scandal, American lawmakers passed Sarbanes-Oxley, a tough set of laws intended to curb corporate fraud. However, many small cap companies complain that complying with "Sarbox" is too costly and time consuming.

The Securities and Exchange Commission. This is the governmental body charged with maintaining and regulating the financial markets in America.

When you buy 100 shares of Wal-Mart, you don't buy them from Wal-Mart - you buy them from a market maker who bought them from another individual investor. Taking out the middleman (market maker), the secondary market is when investors trade stocks with one another, as opposed to the primary market, where normally large, institutional investors buy directly from the issuing companies.

As opposed to an IPO, a secondary offering takes place when a company who has already had an initial public offering wants to issue more shares to the general public. Since this dilutes the percentage of ownership of the current shareholders (and makes them mad), secondary offerings are much less common that IPOs.

A sector is a large grouping of related industries. For example, groceries, apparel, discounters, and ecommerce would all be industries within the retail sector.

This is an adjective to describe a time-frame that is longer than one business cycle. A secular trend, is therefore, a trend that is not influenced by the business cycle.