A security is any form of financial asset - a stock, bond, mortgage, option; you name it.

A short seller is someone who sells shares of stock that he does not own. He does this by borrowing them from a willing stockbroker. The short seller hopes that the shares will drop in value, because if they do, he can then buy them on the open market at a lower price and return them to the stockbroker from whom he borrowed them. Since they want a stock's value to go down, short sellers are considered bearish. Of course, if the short seller is wrong and the value of the stock goes up, he will be forced to buy back the stock at a higher price, and thus, lose money.

A stock with a market capitalization between $300 million and $2 billion.

A sole proprietorship is an unincorporated business. Normally, these are very small businesses, and without exception, they are privately held. In fact, there is no legal distinction between a sole proprietorship and the owner of the business. This means that if someone sues the business, the owner's assets are liable.

See market maker. The only significant difference between a market maker and a specialist is that market makers on the New York Stock Exchange are called specialists.

A speculator is an aggressive investor who is willing to take substantial risk in pursuit of substantial profit.

Companies sometimes split their stock in order to lower their stock price and make more shares available. For example, if a company had 100 million shares valued at $20 each, it could declare a two-for-one stock split, whereby it would then have 200 million shares valued at $10 each. If you had 100 shares in your portfolio, after the split, you would have 200. Companies can also do reverse splits, whereby they increase the stock price and decrease the number of shares.

The difference between a stock's bid and ask prices. This is profit for the market maker.

Someone licensed by the National Association of Securities Dealers to execute stock orders. Stockbrokers must pass the Series 7 examination and be employed by NASD member firms.

The price at which an option can be exercised.

In technical analysis, this is the "floor" of a stock's price. Technical analysts believe that stocks are unlikely to fall below support, but when they do, they believe they will drop precipitously.

When one company wants to takeover another, it must buy all of the other company's shares. In order to convince all of its shareholders to sell, the acquirer inevitably has to offer a somewhat substantial premium to the current share price.

As opposed to fundamental analysis, which concerns itself with financial data, technical analysis is the study of charts and stock performance data. Hard core technical analysts don't care at all about a company's profitability - they use its price movements, plotted on charts, to make buy and sell decisions.

A stock that is thinly traded has a low average trading volume.

Also known as speculative value, time value is the premium options traders are willing to pay above an option's intrinsic value. For example, a $25 call for a stock trading at $28.50 has $3.50 in intrinsic value. If the option is trading for $4.50, this means it has $1.00 of time value. Normally, time value erodes as an option nears expiration.

Buying or selling a stock counts as a trade. In other words, if an online broker advertises $8.99 trades, this means that it costs $8.99 to buy and $8.99 to sell, even if you buy and sell two stocks at the same time.

A stock's trading volume is the number of shares it trades over a given period of time. Normally, volume is measured on a daily basis and compared against its average daily volume.

A trailing P/E ratio uses a stock's most recent annual or quarterly earnings in the price-to-earnings ratio equation of share price / earnings per share.

A stock is considered undervalued by analysts if they believe that its share price is lower than it should be.

If an option goes unexercised by expiration, it expires worthless. Most options traders never exercise their options, but they don't let them expire either. Instead, they sell them to other traders. Eventually, most options end up in the hands of market makers or institutional investors who do exercise them, unless of course, they have no intrinsic value at expiration.