Market Mechanics
Market Order
An order to buy or sell immediately at the best available current price. Guarantees execution but not price — can result in slippage in illiquid markets.
Related Terms
Market Capitalization
The total market value of a company's outstanding shares. Classified as micro-cap (<$300M), small-cap ($300M–$2B), mid-cap ($2B–$10B), large-cap ($10B–$200B), or mega-cap (>$200B).
P/E Ratio
Price-to-Earnings ratio. Measures how much investors pay per dollar of earnings. A high P/E suggests growth expectations; a low P/E may indicate undervaluation or slow growth.
Bid/Ask Spread
The difference between the highest price a buyer will pay (bid) and the lowest price a seller will accept (ask). Wider spreads indicate lower liquidity.
Volume
The total number of shares traded during a given period. Unusually high volume often signals heightened interest or a major event. Average daily volume (ADV) is the 30-day baseline.
Liquidity
How easily an asset can be bought or sold without significantly moving its price. High-volume, large-cap stocks are typically highly liquid; thinly traded micro-caps are not.
Short Interest
The number of shares sold short but not yet covered. Expressed as a percentage of float. High short interest (>20%) can lead to a short squeeze if the stock rises sharply.