Stock market glossary

Bull market / Bear market

Bull = the market trending up for a long stretch. Bear = the market trending down.

These terms describe a long-running trend, not a one-day or two-day move. Nobody can predict exactly when one flips into the other.

Bursa Malaysia

Malaysia's official stock exchange, where local company shares are traded.

Every listed Malaysian company trades here. It runs on set trading hours on working days, and closes on public holidays.

Index

A single number that tracks how a group of stocks is doing together.

An index isn't something you can buy directly — it's just a measurement. To actually invest in one, you buy an ETF that tracks it.

Portfolio

The whole collection of investments you hold.

Stock

A small piece of ownership in a company.

When you buy a stock, you become a small part-owner of that company. If the company does well and grows, your share can go up in value. If the company struggles, your share goes down too.

Ticker (trading code)

A short code used to identify a stock in the trading system.

US stocks use letters (AAPL for Apple, TSLA for Tesla). Bursa Malaysia stocks usually use numbers instead. Always double-check you have the right code — similar-sounding names can be completely different companies.

Volatility

How much and how fast a price swings up and down.

High volatility means the price can move a lot in a short time, in both directions. It's not the same as risk of loss, but it will test your emotions.

Watchlist

A list of stocks you're keeping an eye on but haven't bought yet.

One of the most useful tools for a beginner. Add stocks you're curious about, watch them for a week or two before deciding — you learn how the price behaves without risking any money.

Bid / Ask (and spread)

Bid = the price a buyer will pay. Ask = the price a seller wants. The gap between them is the spread.

A wide spread means you're a little "down" the moment you buy in, because you buy at the ask price but have to sell at the bid price. Actively traded stocks usually have a tighter spread.

Limit order

An instruction to buy or sell only at the price you set.

You control the price fully, but there's no guarantee it gets filled. For a beginner, this is usually the better choice — it forces you to decide the price you're willing to pay before you tap buy.

Lot

The minimum unit for buying a stock. On Bursa Malaysia, 1 lot = 100 shares.

If a stock is priced at RM5.00, one lot costs you RM500. Your normal quantity is always a multiple of 100 — 100, 200, 1,000. If you type a quantity that isn't a multiple of 100, Moomoo will warn you it's an "odd lot" before sending the order. US stocks let you buy just 1 share — there's no lot concept there.

Margin

Investing with money borrowed from your broker.

It multiplies your gains, but it also multiplies your losses — and you still have to pay back the loan even if you lose money. Not for beginners.

Market order

An instruction to buy or sell right now, at whatever price the market gives you.

It's fast and almost certain to fill, but you don't control the price. For a less actively traded stock, you might be surprised by the price you actually get.

Odd lot

A share quantity that isn't a multiple of 100 — for example 50 or 130 shares.

On Bursa Malaysia, odd lots don't trade in the main market. They go into a separate odd lot market, with far fewer buyers and sellers. The effect: your order may take longer to fill, the spread is wider, and the minimum brokerage fee bites harder because your purchase amount is small. Odd lots are genuinely useful for expensive stocks though — if a full lot costs RM9,000 and your capital is RM2,000, an odd lot is your only way in. Moomoo allows odd lots, but it will show a warning first before sending the order.

Paper trading

Practicing buying and selling with play money, at real market prices.

Zero risk. The safest way to get comfortable with the order screen before you use real money. But it can't train your emotions — losing play money feels nothing like losing real money.

Settlement

The waiting period after you sell before the money becomes cash you can withdraw.

For most markets it's one to two working days. This is why you can't sell a stock and withdraw the money on the same day.

Short selling

Betting a price will fall, by selling stock you've borrowed.

An advanced concept with risk that can exceed your original capital. Avoid it as a beginner.

Slippage

The gap between the price you expected and the price you actually got.

Common with market orders, especially for less active stocks or when the market is moving fast.

Brokerage (commission)

The fee your broker charges every time you buy or sell.

Along with other fees like the platform fee and stamp duty, this is a real cost that eats into your returns — especially if you trade often.

CDS (Central Depository System)

The official record of Bursa Malaysia share ownership, held at the exchange level.

On Moomoo Malaysia, a CDS account is SEPARATE from your regular trading account. You DON'T need one to buy and sell stocks already listed on Bursa — your regular trading account is enough for that. It's needed specifically to APPLY for a Bursa Malaysia IPO, because Bursa has to record the share allocation under your own name. Open one early if you're interested in IPOs — the application window is short, while CDS approval takes a few working days.

FPX

Malaysia's online banking payment system — the easiest way to deposit.

The money usually arrives within minutes. Your bank account must be under your own name.

IPO (Initial Public Offering)

When a private company lists on the stock exchange for the first time.

It's not a guaranteed profit on listing day — some IPOs fall below the offer price and stay there. Read the prospectus, don't just follow the hype.

KYC (Know Your Customer)

The process where your broker verifies your identity before your account can be used.

Every licensed broker in the world is required by regulators to do this, as an anti-money-laundering measure. You'll need to upload your IC and do a selfie verification.

Prospectus

The official document explaining an IPO's business, finances, and risks.

The "risk factors" section is usually the most useful part of the whole document — the company is required to be honest there.

Currency spread

The gap between the buy rate and sell rate when you convert RM to USD.

This is a real cost even though it isn't labeled as a fee. Converting back and forth repeatedly means you pay the spread over and over again.

Money market fund

A fund that invests in low-risk, short-term instruments.

This is an investment product, NOT a bank deposit — it isn't protected by PIDM and returns aren't guaranteed. "Low risk" doesn't mean "no risk".

Dividend

A portion of company profit paid out to shareholders.

Not every company pays a dividend. Even ones that do can cut or stop it at any time — it's never guaranteed.

Dollar cost averaging

Investing a fixed amount on a regular basis, no matter whether the price is high or low.

When the price is high, your fixed amount buys fewer units. When it's low, it buys more. It doesn't guarantee a profit, but it removes the pressure of trying to time the "right" entry point.

ETF (Exchange Traded Fund)

A fund that holds many stocks at once, and trades just like a regular stock.

Buying one S&P 500 ETF means you hold a small piece of 500 companies. It's an easy way to get diversification without buying each one separately.

Fractional shares

Buying a fraction of one whole share.

Useful when one share costs hundreds of dollars. Available for some US stocks, not all of them.

RSP (Regular Savings Plan)

Auto-investing a fixed amount on a fixed schedule, for example every month.

It solves the discipline problem — it buys on its own without you having to remember. But it doesn't solve the picking problem; automation just reinforces your decision, good or bad.

S&P 500

An index of 500 large companies listed in the United States.

Warrant (call warrant)

A leveraged product with an expiry date — not a stock, even though the name looks similar.

When you search a company name on Moomoo, the results usually mix real stocks together with warrants. Warrants look cheap (a few sen compared to RM10 for the actual stock), so beginners end up buying the wrong one by mistake. The difference matters a lot: a warrant has an expiry date, and if the underlying stock's price doesn't move as expected before that date, the warrant's value can drop to zero. How to spot a real Bursa stock: its code is just 4 digits with no extra letter at the end. Codes like 11552H or 106679 are warrants.

Operating cash flow (CFO)

The actual cash coming in from day-to-day business.

Profit follows accounting rules; CFO is cash that actually arrives. A company can be profitable on paper yet run out of cash.

EPS (earnings per share)

Net profit divided by the company's number of shares.

EPS is the slice of profit attached to each single share. Price divided by EPS gives the P/E ratio.

Expense ratio

A fund's annual management fee, shown as a percentage.

It's deducted from your returns every year. For big index ETFs it's usually very low — lower is better.

Dividend yield

Annual dividend shown as a percentage of the stock's current price.

A very high yield usually means the stock price has fallen hard — it's not that the company is being generous. Sometimes it's a warning sign, not an opportunity.

Average cost

The average price you paid across all the units you hold.

If you buy several times at different prices, the app works out the average for you. This is your reference point for knowing whether you're up or down.

Net profit margin

How many sen of net profit come from every RM1 of sales.

A 10% margin means RM1 of sales leaves 10 sen of profit after all costs and tax. When margins shrink, profit can fall even while sales rise.

Book value per share

Assets minus liabilities, divided by the number of shares.

It is the accounting value of each share if the company sold its assets and paid its debts. It is a book value, not a market value.

P/B ratio

A stock's price compared with its book value per share.

A P/B of 1.0 means you pay the same as the net asset value on the company’s books. It means more for banks and asset-heavy companies than for service businesses.

P/E ratio

A stock's price compared to the company's earnings — how much you pay for each ringgit of profit.

It's useful for comparing companies WITHIN the same industry. Comparing a bank's P/E with a tech company's doesn't mean much.

Dividend payout ratio

How much of the profit is paid out as dividends.

A 90% payout means almost all profit goes to shareholders, leaving little to grow the business. Above 100% means the company paid out more than it earned.

Market cap

A company's total value in the market.

Large companies tend to be calmer; small companies can swing far more wildly in both directions.

ROE (return on equity)

A year's profit compared with the shareholders' money in the company.

An ROE of 12% means every RM100 of owners’ money produces RM12 of profit a year. Compare within the same industry, and check whether a high ROE comes from heavy borrowing.